The number of medallions is set in an effort to reduce the total number of taxis in the city.
This is not good for any one particular person trying to get a cab.
However, it is good for the total traffic situation in the city. If there were a significantly greater number of taxis, gridlock would be all but unavoidable. Then no one could take a taxi anywhere.
It's one of those situations where the negative eternality is felt a tiny bit by everyone, so the regulation needs to take that into account.
I'm not saying we have the perfect scheme - if we did congestion pricing would be higher, street parking prices would be way higher - but there is actually a rationale behind it. Most of the people are hyper focused on the rider/driver interaction, but there is a bigger city wide transit question in play that is often ignored.
This is not good for any one particular person trying to get a cab.
However, it is good for the total traffic situation in the city. If there were a significantly greater number of taxis, gridlock would be all but unavoidable. Then no one could take a taxi anywhere.
It's one of those situations where the negative eternality is felt a tiny bit by everyone, so the regulation needs to take that into account.
I'm not saying we have the perfect scheme - if we did congestion pricing would be higher, street parking prices would be way higher - but there is actually a rationale behind it. Most of the people are hyper focused on the rider/driver interaction, but there is a bigger city wide transit question in play that is often ignored.