Write a one page essay discussing New York City taxis. To limit the number of dr

Question

Write a one page essay discussing New York City taxis. To limit the number of drivers, the city requires the purchase of a very expensive medallion, which acts as a barrier to entry into the cab market. However, the new firms Uber and Lyft continue to expand and take market share away from traditional cabs. Taxi cab unions are fighting Uber and Lyft, often trying to get the programs removed from the city.  

Why would the taxi system require a medallion? How does it create an entry barrier?

Why would cab drivers want to eliminate Uber and Lyft from the city?

Explanation / Answer

The taxis of New York City are widely recognized icons of the city and come in two varities: yellow and green. Taxis painted canary yellow (medallion taxis) are able to pick up passengers anywhere in the five boroughs. those painted apple green (street hail livery vehicles, commonly known as 'boro taxis'), allowed to pick up passengers in Upper Manhattan, the Bronx, Brooklyn, Queens, and Staten island. Both types have the same fare structure. Taxicabs are operated by private companies and licensed by the New York city and Limousine Commission. Taxicab vehicles, each of which must have a medallion to operate, are driven an average of 180 miles per shift. The TLC has a Driver Safety Honor Roll recognizes the safest Taxi And For-Hire Vehicle drivers in New York City. Drivers on the Honor Roll have had no crashes involving fatalities or INjuries, no traffic violation, and no violation of TLC safety-related rules for five yera or more.

A maximum of four passengers may be carried in most cabs, although larger minivans may accommodate five passengers, one child under seven can sit on an adult's lap in the back seat if the maximum has been reached. Drivers are required to pick up the first or closest passenger they see, and they may not refuse a trip to a destination anywhere within the five boroughs. There are mobile apps designed to help people find, hail, and share cabs in New York City.

Answer 1- A taxi medallion, also know as a CPNC, is a transferable permit in the United States allowing a taxi driver to operate. The medallion system was created in 1937 as a government imposed limitation on the supply of taxicabs, requiring that a "medallion" be purchased for the right to operate a taxi.

The taxi system require a medallion because this system artifically restricts the number of cabs.

It works as an entry barrier because the cost of leasing a medallion is so high , the system cut into the income of drivers and raise costs to passengers. If there is no barriers to entry to the taxi market its end up with an abundance of poorly maintained taxis. Medallion system helps the city to better regulate taxis and enables the city to raise the standard of all taxis.

Answer 2- The cabs drivers want to eliminate Uber and Lyft from the city becasue of them there is sudden increase in the number of for-hire vehicles on the city's streets, they claim, has made it impossible for drivers to earn a decent living(as they become a more attractive alternative to taxi cabs). The business model of these two are destroying every driver across the market.They are destroying the full-time jobs professional. They were blamed for worsening congestion.And as revenues fell. Medallion prices get low, many medallion holders had trouble making payments on the loans that they borrowed to pay for the medallions. Many medallion owners faced the prospect of bankruptcy.

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