Jersey City, N.J., will auction 20 new taxi medallions, which is expected to earn the city $1.5 million in revenue. They won’t come cheap. As The Jersey Journal notes, the minimum bids for these medallions will range from $50,000 to $100,000.
Before the city council authorized the auction, Jersey City had 104 taxicabs, or one per 2,381 residents. Once the auction is complete, that ratio will drop to one taxi per 1,997 residents. To put that in perspective, Washington, D.C., has one taxi for every 90 residents and Denver has one for every 480. Hoboken, N.J., a town with one-fifth the population of Jersey City, has 75 cabs, or one per 667 residents.
In fact, Milwaukee, which was sued by the Institute for Justice for unconstitutionally limiting taxicab competition, had one cab for every 1,850 residents. So even with the 20 new medallions issued, Jersey City residents will still be woefully underserved.
Unfortunately, these types of restrictions prevent entrepreneurs from competing. Nor are they limited to Jersey City. In fact, in cities like Portland, Ore., and Tampa, Fla., entrepreneurs are effectively banned from offering their customers better prices.
— Nick Sibilla
Nick Sibilla is a writer at the Institute for Justice