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Jens 'n' Frens
Idle thoughts of a relatively libertarian Republican in Cambridge, MA, and whomever he invites. Mostly political.
"A strong conviction that something must be done is the parent of many bad measures."
-- Daniel Webster
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Friday, June 01, 2007 :::
I've been meaning to pass along, with comment, this George Will column about Minneapolis's phasing out of their city-enforced artificial shortage of taxis. I agree with most of the column, but I am more sympathetic than he is to medallion owners who paid good money for their piece of the oligopoly. (I'm also skeptical of the assertion that poor people use taxis more than rich people, but I don't have any further comment on that.)
Almost any change in regulations will have a negative effect on somebody's bottom line, and I don't think every instance of this needs to be compensated - part of being in business is accepting the risk of living in a world with laws that are responsive to the whims of regulators and legislators, just as one accepts the risks associated with whims of your customers and suppliers. But when the city auctions off a limited number of transferable licenses, eliminating the requirement than a taxi have one is by no means an incidental change in regulation. In this case, the city hasn't immediately eliminated the cartel, but it's been eliminated effective in three years, and even the next three years of constrained supply have been loosened, so the value of each outstanding medallion has been sharply reduced. If you've been driving a taxi for years, leasing someone else's taxi, to save enough to make a down payment on your own medallion, you're taking a substantial hit that I'm not sure you should have been expected to foresee.
I don't know about the law; I'm just arguing fairness. I don't think fairness necessarily requires that medallion-owners be compensated for the entire drop in the medallions' values, and my position may be colored by the Boston situation, which I know a little better, where a medallion trades for $375000 rather than $25000 - a driver doesn't have to lease and save up as long in Minneapolis as in Boston. But I'd at least recommend distributing to medallion-holders the proceeds from the auctions of new medallions over the next three years, rather than adding them to city revenues.
::: posted by Steven at 12:47 AM
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