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Let the Taxi App Roll
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| Contributor | Imperator |
| Last Edited | Imperator Dec 05, 2012 06:42am |
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| Category | Perspective |
| Author | Jonah Goldberg |
| News Date | Wednesday, December 5, 2012 12:00:00 PM UTC0:0 |
| Description | If Hollywood remade The Graduate and set it in 1980, the one word the businessman would have for Dustin Hoffman’s character wouldn’t be “plastics.” It would be “medallions.”
That’s because the single greatest investment you could have made over the last 30 years isn’t in gold or silver or even Apple stock. It’s in New York City taxicab medallions.
Since 1980, New York’s taxi medallions — essentially the license to drive a cab in the Big Apple — have appreciated nearly 2,000 percent, according to one estimate. Prices rose on average 8 percent annually for 30 years, dipping significantly only once — right after 9/11, calculates economist Ilan Kolet, a writer for Bloomberg.
Medallions have a better rate of return than Class A Berkshire Hathaway shares because New York tightly controls the number of medallions — and hence the number of taxis — permitted on city streets. In 1937, that number was 13,566, and it’s hovered around there ever since. Medallions cost ten bucks in 1937 (roughly $160 in today’s dollars). Last year, two sold for $1 million each. Government-imposed scarcity and inefficiency created that value, nothing else.
So it’s no wonder that New York’s cab industry loves its regulators and vice versa. The Taxi and Limousine Commission exists to regulate taxicabs. If taxicabs — as we know them, at least — go out of business, what’s the point of having a commission?
Such thinking has given birth to a national movement to kill Uber and companies like it. A San Francisco start-up, Uber is a car service that you “hail” with an app on your smartphone. |
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