Thread by @jasonwsnead

This @nytimes expose is a must-read. Cronyism and corruption in #NYC fed a bubble in medallion prices. The consequence: The city brought in tremendous sums, politically-connected fleet medallion owners got rich, & low-income drivers got trapped.
nyti.ms/2W7rdGj

Much of the reporting focuses on lending practices and lax oversight by regulators, but let’s not forget the original sin of the taxi industry: the medallion itself. If #NYC didn’t insist on artificially limiting the number of taxis, this scandal would never have happened.

The city justifies medallions as tools to control congestion and save the industry from “ruinous competition.” Even if you are inclined to believe that medallions once provided a benefit, its unquestionable that they now do more harm than good.

Medallions (& other entry barriers) lead to higher prices, degraded service, and create powerful (politically connected) cartels that lobby hard to block & limit competition that harms their business. Hence, #NYC is all too happy to blame drivers’ struggles on @Uber & @lyft

But drivers who are underwater today aren’t struggling b/c of competition; they are struggling b/c of cronyism. They should never have needed to buy a medallion to drive a taxi, much less take out a loan to afford one at artificially inflated million-dollar prices.

So, we can talk about needing more regulation and better accountability in medallion lending, but the lasting solution is to end medallions altogether. Government intervention has failed at every level—drivers and consumers are both harmed. Let’s end taxi medallions.