A Bloomberg report says that the cost of a New York City cab license has risen more than 1,000 percent since 1980, a market that’s outperformed gold, oil, inflation, and the housing market. The medallion, the transferable aluminum plate found on the hood of all cabs, sold for $678,000 in July, up from $2,500 in 1947.
The story attributes its success to a small, tightly controlled supply of licenses and an unwavering demand from entrepreneurial immigrants, coupled with a huge demand for New York taxi cab rides. Econ 101 has another name for this - the power of monopoly!
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