[PKop]

What do the 995 taxi cab companies existing outside of my local area do for me if I want a ride? What does there existence have to do with the constraints of local supply?

It is a de facto monopoly within the confines of a metro area where competition is absolutely regulated and limited.

[mmcwilliams]

Saying that taxis, who are regulated through medallions, are a "monopoly" is like saying that bars are a monopoly because they are regulated by liquor licenses.

[PKop]

They are not a monopoly, you are correct. They are a cartel.

[mmcwilliams]

Precisely. I don't have a position on whether or not this arrangement is ideal, but I do wish the discussion about it could remain precise.

[mc32]

That does not equal a "monopoly" anymore than the sole coffee shop in a small town is a monopoly. When we make these equivalences, words lose their meanings.

[PKop]

Ok monopoly was absolutely the wrong characterization. They are a cartel. ("an association of manufacturers or suppliers with the purpose of maintaining prices at a high level and restricting competition.") Which is a difference of degree.

But your analogy doesn't make sense to me. There's not political or regulatory reason there exists one coffee shop.

And because of this fact, if they abuse their position as the sole coffee shop (raise prices, provide bad customer service, etc.) they will open themselves up to a challenge from another entrant into the (open and free) market.

This is exactly why taxis are a different beast. They are protected from competition. Explain to me how taxi cartels operate in a free market? Or conversely, if you agree that they don't, explain how coffee shops operate under the same conditions?

[drtz]

"complete control of the entire supply of goods or of a service in a certain area or market" - Webster's Dictionary

[mc32]

So somehow, using unbecoming means (anti competitive and illegal) these taxi cos are disallowing other entrants as well as these coffee shops thus controlling their respective industries? Creating a monopoly (i.e with purpose) is not the same as enjoying a virtual monopoly. At least I see daylight.

[PKop]

Do you understand how tax cab companies operate and are regulated?

"Some cab drivers want the council to issue permits directly to drivers with at least five years of experience — what the drivers call "legacy permits"...

— bypassing Austin's three taxi franchise holders: Yellow Cab, Austin Cab and Lone Star. The change could cost cab companies control of the market — and the thousands of dollars they collect annually from each cabbie after paying the city just $400 for each permit."[0]

"STOA wants to limit the number of cabs on the street in order to increase market share for large operators; with less competition for passengers they would be able to cover their higher overhead costs, and presumably "can charge less per trip." By asking the city to regulate the number of cabs, STOA is asking the city to limit their competition."[1]

[0] http://www.statesman.com/news/news/local/taxi-industry-pours...

[1] http://savannahnow.com/column/2009-10-23/toma-cab-owners-see...

Is this how coffee shops, restaurants, bars, etc. are setup in any city you're aware of?

[EdHominem]

The sole coffee shop in town isn't a monopoly. It's competing with all the other coffee shops that could also be there. When their profit margins get too fat, others will move in.

Whereas the city has a monopoly on Taxi services and licenses out to a very limited pool of providers. (And usually a closed group that you couldn't get into even if you could afford a medallion.)