See https://kfarr.com/2007/11/15/how-much-is-a-san-francisco-tax...

Medallions in SF are capped at 1500 and the holder is allowed to lease the medallion out to others. So the holder gets around $22,000 a year leasing it out, or around $200,000 using NPV discount of 6%. Meanwhile without a medallion a cabdriver makes $24,000 / year after fees etc.

I have been driven in some quite delapidated cabs in SF. Maybe lack of maintenance or other in-cab monetization such as TV, brochures, or "suggesting" restaurants or clubs to tourists (not sure if this happens in SF, but definitely in other cities).