[ClintEhrlich]

The very fact that medallions were being sold for hundreds of thousands of dollars demonstrates that taxi were, in fact, a monopoly taking advantage of the populous. Regulated monopolies are often even worse than unregulated ones, because the dominant entities were placed in that position through preferential treatment by the government, not as the result of prevailing over all their competitors in the marketplace.

The medallions became investment vehicles for hedge funds because they conferred the right to provide a service for which there was a very high demand and a supply that the government was capping at an absurdly low level, in a classic example of regulatory capture. When you had to wait forever for a taxi, it was because there weren't enough of them being operated. And there weren't enough of them being operated because only people with medallions were allowed to operate taxis.

Ridesharing apps have unmasked this glaring inefficiency and given people a look at how much more efficiently the world can be run when government regulators are circumvented by private enterprise. The state still has the power to ban this new mode of providing transportation, but that will likely be politically untenable, given the public popularity of Uber and Lyft. (There is still a risk of indirect state action, like unfavorable rulings about the employment status of Uber drivers)

The experience of the taxi companies will be a wake-up call to other heavily regulated legacy industries that if there are any signs that an app is going to disrupt their business model, they need to immediately try to block the app from the marketplace (e.g., by suing the makers to scare off VCs) Once customers get a taste of the techno-libertarian future, they aren't enthusiastic about returning to the drudgery of state control.