XPost: rec.arts.sf.written, rec.arts.sf.science   
   From: rod.speed.aaa@gmail.com   
      
   David Friedman  wrote   
   > Greg Goss  wrote   
      
   >> The supply of taxis is artificially held low to   
   >> make the driver's pay a living wage, and to   
   >> allow adequate maintenance on the vehicles.   
      
   > I think you have it backwards.   
      
   I don’t.   
      
   > The medallion system holds down the number of cabs,   
      
   Yes.   
      
   > hence holds down the demand for cab drivers,   
      
   Yes.   
      
   > hence tends to lower their wage, not raise it.   
      
   No, it means that because the number of cabs is deliberately   
   restricted, the drivers do end with a higher income than if the   
   numbers were not restricted at all.   
      
   > The medallion belongs to someone who has paid a very high price,   
   > in many cities I think well over a hundred thousand dollars, for it.   
      
   Yes.   
      
   > The need to get a return on that investment is the wedge between the   
   > higher revenue   
   > resulting from the reduced number of cabs and the lower wage paid to cab   
   > drivers.   
      
   But they still have to have drivers for their cabs, so in practice the   
   fact that the number of cabs on the road is restricted means that   
   they end up with a higher wage than if there was no restriction   
   via the medallion system.   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)