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Comment by teej | Hacker News Reader

Isn't $200k the free market cost? The government isn't pocketing that money. That's the price you would expect from an asset that generates income with a limited supply.

Edit: why am I down voted to max? The government limits supply but the medallions are still sold on the market.

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No, the supply is artificially limited by the government; there's no free market involved. That $200k is paid to the government.

(The claimed rationale for limiting the number of taxis is to reduce traffic. I would suspect the actual rationale is to favor the existing taxi businesses that already have licenses and don't want competition.)

It's plainly obvious that the amount charged can't be related to the cost of the marginal traffic caused by the taxi. Even if you discount for the fact that a taxi is driving more often, it would mean that normal private car owners are inducing tens of thousands of dollars in negative externalities each year.

Are you talking specifically about Quebec here? This kind of thing varies a lot by jurisdiction, but in many jurisdictions the high costs for a plate are not paid to the government, but paid on a grey market to a prior owner, with the fee for registration being nominal except for the fact that no one gets to register any more. In many cities (including mine), people own plates as a retirement investment and are fighting deregulation because their investment will crater.

Not that this is any better, but people talk as if there's One Way taxi regulations work all over and there's quite a wide range on these things.

Also, the nominal reason for limiting plates is usually (as far as I've ever seen) to ensure a living wage for taxi drivers. I don't think it really works out that way, instead creating a class system where some people extract rent from other people.

The payment to the government is irrelevant. The point is that the government artificially restricts the number of occupational licenses.

That is not true. If they were non transferable, a limited supply would still stay at the governmental set price.

Competition for the limited supply of licenses would manifest itself in other ways, resulting in $200,000 worth of economic resources being used, on average, to acquire a license.

More importantly, the high market price of a transferrable license indicates there is a shortage of taxis relative to demand for taxi service, which has a cost for the economy.

I agree that it's not relevant who the wasted money goes to to the systemic effects, but it certainly implies a very different motive to say the government is taking that fee.

> The claimed rationale for limiting the number of taxis is to reduce traffic.

The ratio of vehicles per person in Singapore is 0.18 (compare to about ~0.5 most places in the US). It's very easy to get a Taxi to any place not accessible by public transport. I would be astounded if there is any verifiable scientific study backing this claim.

[0] https://www.lta.gov.sg/content/dam/ltaweb/corp/PublicationsR... [1] https://en.wikipedia.org/wiki/List_of_U.S._states_by_vehicle...

I don't think it's true at all that it's easy to get a cab in Singapore.

If you're in the downtown area anytime close to rush hour it's practically impossible to get a cab without reserving one in advance (which costs extra), or waiting in line at a designated "taxi stand" for an unacceptably long time.

Personally I think that part of the reason the government no longer allows street hails downtown (even for cabs) is an acknowledgment of this problem.

The 200K is not paid to the government but to the previous owner of the plate. So yes the price is dictated by demande/offer but you are true that by restricting the offer the are artificially raising the price of the plate.

When Uber started operating in Quebec the price of a plate in Montreal dropper to around 160K. That was the major point of dispute, since taxi drivers usually get loans to buy these plates knowing that they can re-sell then anytime. Uber changed that.

> That was the major point of dispute, since taxi drivers usually get loans to buy these plates knowing that they can re-sell then anytime. Uber changed that.

So fundamentally their complaint is: "My investment carried a risk"

Limited supply is government's doing.

Please resist commenting about being downvoted. It never does any good, and it makes boring reading.

https://news.ycombinator.com/newsguidelines.html

no, 200k is not a free market cost. yes, government is pocketing that money. limited supply - you mean uber drivers who are willing to offer services to riders?

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