Dual court rulings reaffirm Bloomberg taxi service goals, consumers benefit

Taxi service in NYC just got a lot better thanks to a couple of appellate court rulings, clearing the way for an additional 18,000 livery cabs to serve northern Manhattan and the other boroughs, and the use of smart-phone apps to better connect riders to drivers. From the New York Times:

As early as next month, thousands of the newly designated taxis — bearing fresh apple green paint, new roof lights and taximeters — will begin to descend on neighborhoods where yellow cabs rarely visit, addressing an inequity that has existed for decades. [...] 
The ruling, which overturns a lower-court ruling that had stalled the action last year, also clears the way for the city to generate as much as $1 billion by auctioning off 2,000 medallions for wheelchair-accessible yellow taxis; the measure required that 20 percent of the livery vehicles be wheelchair-accessible.

Predictably, the Metropolitan Taxicab Board of Trade, which represents taxi fleet owners who benefit financially from caps on the total number of taxi cabs, does not approve. More from the NYT:

And many yellow-taxi operators, disinclined to share street hailing with livery cabs, have challenged the plan since its inception. The Metropolitan Taxicab Board of Trade, a plaintiff in one of the suits, called the decision “a crushing blow to New Yorkers who loathe the brand of end-run politics that created this law.” 
“The court’s finding that somehow hailing livery cabs in the Bronx is a ‘matter of substantial state interest’ — code words that were used to bypass the New York City Council — is alarming,” the group said in a statement. “The ruling kicks open the door for systematic abuses for future executives in cities throughout the state, but particularly in New York City.”

Their arguments refer to how the Bloomberg administration brought their case to the state when the city council shut down their plans to expand taxi service, and it certainly is unfortunate that things had to go that route. But note something very important: there's nothing in the Metropolitan Taxicab Board of Trade's complaint about the impact of these rulings on consumers--all they talk about is "end-run politics" and "open[ing] the door for systematic abuses".

And why is that? Because this is a huge win for consumers and the taxi fleet owners know it. They can't very well say, "Shucks, people in Queens are definitely going to get better service and the drivers are going to be better paid at more consistent rates, but... but... our profits!!!" The fleet owners are the only ones who really benefit from an artificially limited supply of cabs, so doom-saying it is.

The taxi business is one of the most highly (and unnecessarily) regulated and uncompetitive service sectors in the country, and this is introducing a little bit of competition into that system, in New York at least. It's very likely that fleet owners will lose out a bit as a result of these rulings, and perhaps even taxi drivers themselves, who already make far less money than they deserve. I think most people would agree that the benefit to the 8 million people living in NYC and the millions more who vacation or work in the area exceeds the losses of the taxi industry--and if you're concerned about the taxi drivers themselves (as you probably should be), then your real qualm is with the medallion system.

 Taxi medallion price appreciation since 2004, from  Carpe Diem .

Taxi medallion price appreciation since 2004, from Carpe Diem.