Taxi cab economics

Topics: Taxicab, English-language films, New York City Pages: 1 (316 words) Published: October 24, 2013
Taxi cabs are an important means of transportation in New York City. With an average of 241 million passengers a year taxis play a big part in how people get around the city. What kind impact will raising the maximum allowable fare rates, and to what extent.

It seems to me that depending on how much the rate is raised, not many people would truly benefit from this. Most people would likely think that the cab drivers would make a lot more money from a higher rate, but the drivers have a lot of overhead they need to deal with before making any profit. For one thing all cad drivers must pay for gas out of pocket and with gas prices so high now and still rising a higher rate is almost necessary. And with the cost of a medallion being upwards of $1 million the drivers can start out in a pretty big hole debt wise. The only ones really making any money out of this would be the garages and the state. The garage can then raise the cost for the drivers to rent the cars, and the state will get more out of them in taxes.

Conversely the raised rates may potentially hurt the cabbies business. People can and often do get around the city by walking. There will always be people in a rush or just too lazy to walk around, but others who might have been willing to splurge on a taxi could decide to take the walk instead ultimately diminishing the effect of the higher rates. Also people dependant on the taxies will have to take the hit and have less money to spend on other things.

In the end I would say that raising the rates wouldn't really help anyone. The ones who stand to gain aren't the one who need the income, and it could end up impairing the economy.
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