I get the feeling that it's less about the pride of ownership and more about the possibilities for revenue and speculation.

If you own your own medallion, you can rent out your taxi when you're not driving it, so your asset is always moving.

More importantly, taxi medallions are still very scarce, and (last I checked) most of them are owned by a few people. That means free floating medallions are very scarce, and tend to appreciate in value far beyond their ability to produce revenue.

Like buying MS stock, you're not doing it for the dividend, you're doing it for the delta in price.

a somewhat dated article w/ some of the economics around taxi medallions -

Owner-drivers, who operate roughly 40 percent (5,369) of Gotham's yellow cabs, make decent livings, averaging $35,000 a year way back in 1993, according to the latest, if obsolete, TLC figures. Those who bought their medallions for $30,000 or $50,000 long ago and own them free and clear do best; they earn a decent income from driving and, at retirement, can sell the medallion and live off the vast appreciation. Those buying $275,000 medallions today, primarily South Asians, can still do okay, if two partners share the cost of financing the medallion together, and each drives a 12-hour shift daily. The 1993 TLC survey, when medallions still cost only $137,000, found that new owner-drivers then averaged $27,000 a year.

tough #'s!

why are medallions so expensive?

seems to me to be a clear case of regulation gone awry. Do you really need to regulate the hell out of the taxi industry?

certainly the airport shuttle business isn't so heavily regulated, for example. It seems like prices for everything would drop if they stopped this artificial scarcity of medallions, and just allowed anyone who wanted to be a taxi driver to buy a car and get to work.

i can understand a regulation that says that cabs have to have a particular color, seat belts, etc....but why a regulation that limits the # of cabs in the city? One would think that would *increase* rather than decrease traffic as it would require more people to have cars.

Do you really need to regulate the hell out of the taxi industry?

For an efficient city, you need safe taxis with standardized rates, and you need to limit the number of taxis to reduce congestion.

However, the current system has a classic rent-seeking class of medallion owners who live off the efforts of drivers. This article discusses how to fix the system.

Hi
My name is errol and I live in Melbourne Australia,
I am the Proud owner of two Taxi Licence in Melb (Victoria)
And I wish to congratulate Mohammed Shah, on his recent purchase
A taxi Medallion, in New York My wife and I wish you well...
we started out like you , but in Australia, and now we never
look back .....
GOD BLESS YOU AND YOUR FAMILY
Errol & Barbara Spaull

Well in India also the cab licenses are difficult and expensive to get, but using bribes anything can be done :) . The small time I spent in New York City I met a lot of Indian Cabbies never knew they did not own the cab license, interesting to see an Indian Cabbie finally owning the cab.