A hierarchy of street allocations

I've talked with some livable streets advocates who are opposed to doing anything that would increase the amount of parking on a street. They're a pretty small minority; most people acknowledge that there are plenty of uses that are worse than parking. But I've talked to other advocates who are reluctant to publicly endorse increasing the parking supply, for fear of lending legitimacy to the narrative that parking is scarce and it must be expanded at all costs.

I personally think that if you do it right, you can argue for parking under restricted circumstances without endorsing the idea that parking is always the best use for a piece of land. In that spirit, I've thrown together this hierarchy of land use.

Imagine a 10' by 30' rectangle, roughly the size of your average American parking space. Such a rectangle could be used for various purposes, all with different impacts on people's decisions to drive for a single trip, to make a habit of driving, to buy a car, or to lobby for more car improvements. I've given them a rough ranking, with the least desirable uses at the top of the list.

There are some rankings that will depend on the circumstances of the area. Places with lots of pedestrians would probably have a greater need for sidewalks, while places with more bus riders would need more bus stops and lanes. In general, though, I think this is pretty accurate. Your suggestions are welcome.

1. Electric vehicle charging station (Added June 22)
2. Shark pit
3. Curb cut used as queue for garage, gas station or car wash (Added June 22)
4. Curb cut for off-street parking
5. General purpose driving
6. Shared bike lane
7. Parking reserved for individuals
8. Parking reserved for classes of people
9. Unmetered, unlimited parking
10. Limited-time unmetered parking
11. Limited-time parking with long-term permits
12. Limited-time parking with parking meters
13. Limited-time parking with muni-meters
14. Limited-time parking with dynamic pricing
15. Limited-time parking with market-rate pricing adjusted quarterly
16. Limited-time parking with market-rate pricing adjusted hourly or in real time
17. High-energy use retail (truck with compressor, air conditioner) (Added June 22)
18. Loading zone
19. Taxi stand
20. Parking for motorized two-wheeled vehicles (motorcycles, mopeds, scooters)
21. Painted bike lane
22. Part-time bus lane
23. Sidewalk
24. Sidewalk with bench
25. Sidewalk with chairs and tables
26. Bike parking
27. Low-energy-use retail (hot dog, ice cream or tamale cart) (added June 22)
28. Pop-up cafe
29. Physically separated bike lane
30. Bus stop
31. Full-time bus lane
32. Full-time trolley lane

If I had 10,000,000,000...

... I would buy out John Aston and every one of the current taxi medallion owners who believe they've made an investment in "the American dream," but don't understand or care that investments are gambles, and that the government has no responsibility to guarantee their investment.

All you taxi rentiers, please take your $800,000 and get out. Anyone who is willing to hold the city hostage to ensure their rate of return does not deserve to do business here. I don't want you paying people like Ethan Gerber, Fernando Mateo or Lew Fidler to stand in front of City Hall and spew garbage about killing jobs, community service and local control. You want a guaranteed investment? Put $250,000 in a savings account, or buy Treasury bills.

Contrast this attitude with Bhairavi Desai, who simply negotiated some measures to mitigate the impact of these changes on her members. Let's hope that the other groups are bluffing too, and that over the next few days they'll take their concessions and quietly walk away.

Fernando Mateo actually told the Times, "It’s better that we keep the status quo as it is. Why create change? It’s not right. I don’t understand what the mentality at City Hall really is right now."

Well, Mr. Mateo, it's really pretty simple. As "the Changeling" in Bed-Stuy writes, (1) from a distance it's hard to tell whether a car is a livery cab and whether it's already taken, (2) the honking that substitutes for availability lights is annoying, (3) haggling is difficult, and some passengers resort to flirting, (4) some cars and drivers are unlicensed and some dispatchers are unprofessional.

That's why we want to create change: to replace the messed-up system of illegal street hails with a professional service that people in the outer boroughs can rely on so that they don't feel as much pressure to blow their hard-earned money on a private car. That's better for New Yorkers and better for the environment. That's what the mentality at City Hall is right now.

According to the Times, Matteo also "said that he feared that if livery cars began picking up passengers on the streets, fewer of those cars would be available to respond to radio calls and pick up people who do not live near major thoroughfares." Well, no. If there's demand for radio calls and the current drivers aren't fulfilling it, then new drivers can come in to fill the gap. After all, there's no cap on the number of people who can respond to radio calls. Is a successful entrepreneur like him really so ignorant of basic issues of supply and demand, or is he bullshitting?

When security makes us less secure

In my last post, I described how the current "airport security" system fails to provide any significant level of security beyond what existed before 2001. In particular, the system of requiring photo identification to get on a plane is pointless and easily circumvented from a passenger safety standpoint. Trains and buses are also very different from airplanes, with different security requirements, and applying airline security measures unmodified to trains and buses is idiotic.

Beyond this, the concept of "making trains as safe as planes" is even more counterproductive. "Safety" measures like seat belts can wind up making us less safe by encouraging people to drive or fly instead of take the bus. In the same way, these "security" measures can make us less secure by encouraging people to drive or fly instead of taking buses and trains.

The long lines, intrusive bag and body checks, idiotic limits on liquids and utensils, and depersonalizing identity checks have discouraged many from flying. I personally did not fly for almost five years after the September 11 attacks, partly for unrelated reasons, but also in part because I knew it would infuriate me to have to take my shoes off. I don't think I'm the only one. The beneficiaries of this bureaucratic incompetence have been Amtrak and the intercity bus companies. Although they instituted their own moronic identification requirements in 2002, at least you don't have to put your bag through an X-ray to get on a bus.

Senator Schumer seems determined to change that. The Senator from JetBlue loves to tell the story of how he put up with crappy plane service to upstate during his 2000 campaign, and promised that if elected, he would improve it. Did he improve it with an efficient, sustainable high-speed rail network? No, he poured massive subsidies into airports and airlines to serve them, and with the price of jet fuel rising and travel budgets falling, the system just demands more and more subsidies.

It could be that Schumer saw that all the security theater was making airlines uncompetitive and decided to saddle trains and buses with the same shit. But I'm going to apply Hanlon's Razor here and assume that Schumer really wants to do something nice for trains and buses, and he's enough of a moron to think that the security theater will save transit riders from a horrible September 11th-style fate.

Of course, the result will be that people will choose to drive instead of taking trains and buses. Whatever profits Amtrak is making on the Northeast Corridor will disappear, along with the minor profits that intercity bus operators are earning. This will lead to cuts in service, which will lead to drops in ridership and further service cuts.

The worst part of it all is that if people shift from a more efficient mode like trains and buses to a less efficient mode like private cars or airplanes, that increases their fuel consumption per mile and per trip. Increased fuel consumption means more oil imported from the Middle East, which means more oil wars to secure our supply, which means more motivation for terrorists to attack the United States. It's a fake security that only winds up making us less secure.

Trains are not planes

I want to post an explanation for my last post, and an elaboration of some of the points I raised in it. Recently our senior senator has been making a push to increase "security" on intercity trains and buses. I haven't written very much on this topic before because frankly it makes my blood boil, and I'm afraid I'll wind up TYPING IN ALL CAPS and all my frustration will burst out in one big incoherent rant. The satire has helped me to vent a bit.

What is it that has me in this state? Mainly it's the combination of idiocies: delays and frustrations from security theater joining with monitoring of private activities to discourage transit ridership. It's a perfect storm of evil.

The first reason is that, as Adron explains, most "airport security" is actually ineffective. The biggest improvement in airline security since September 11 has been reinforcing the cockpit doors. John Gilmore made an excellent case that requiring identification to fly on airplanes is both ineffective and unconstitutional. The shoe inspections, backscatter machines and body cavity searches are unnecessary, ineffective and intrusive. Their main point is to convince us that the Government is Doing Something.

The next point is that trains and buses are not planes. By their nature they require much less security, and the kind of security is different. Anyone who acts like they're the same is an idiot, and Chuck Schumer regularly embarrasses the state of New York when he opens his mouth about transit security and lets the whole world see what an idiot we elected.

There's one major thing to keep in mind when anyone makes a comparison between trains and planes: it's easy to crash a plane into a building; you just have to take control. It's much harder to crash a train into a building. Not completely impossible, but almost. It's relatively easy to crash a bus into a building, but they tend to be smaller than planes and not filled with tons of kerosene, so they don't do as much damage.

Of course, it is possible to carry out mass murder on trains, as was done by Al Qaeda affiliates in Madrid in 2004, and in London in 2005. But there have not been any similar attacks since, and my guess is that the terrorist leaders didn't feel they were worthwhile. 191 people were killed in Madrid, and 56 in London; compare that to the 2,996 deaths that immediately resulted from the attacks on the World Trade Center and Pentagon in 2001. In fact, if you glance over Wikipedia's list of terrorist incidents involving railway systems, the numbers of dead and wounded are all really tiny in comparison to the World Trade Center attacks, despite requiring as much planning and coordination.

Similarly with buses, Palestinian suicide bombers carried out a series of widely reported attacks on buses from 1989 through 2008, and only managed to kill 804 people. Their biggest year was when they killed 237 people in 2002 - but it was done in 46 separate attacks, most of which were in cafes and markets, not on buses. These attacks have had an effect, but they required a lot of coordination and numerous operatives over a nineteen-year period. Most importantly, the attackers felt that they were defending their home territory, and did not have to travel far to do it.

So that's why the current airline security measures are ineffective, and why they would be even less effective applied to trains and buses. In a future post, I'll discuss how the current security measures are discouraging people from using transit, and why the proposed ones would be even worse.

Schumer calls for horse "no ride" list in wake of terror plot

Sen. Charles Schumer called today for the creation of a "No Ride List" for American horses to prevent suspected terrorists from targeting the US equine system.

Photo: John Haeger, Oneida Daily Dispatch

The move follows reports from intelligence gathered at Osama bin Laden's compound that showed the Arabian Horse Association was considering attacks on US horses.

In a press conference at his New York City office, Schumer said he will begin pushing congressional appropriators to increase funding for rectal inspections of commuter and passenger horse systems, as well as heightened monitoring and support for security at local horse stables throughout the country.

The Democratic senator said he also asked the Department of Homeland Security to expand its Secure Flight program to stables, which would essentially create a "No Ride List" to prevent suspected terrorists from mounting horses.

Intelligence analysts who examined the documents seized from bin Laden's compound in Pakistan concluded that al Qaeda was considering attacks on high-profile dates, including the tenth anniversary of the Sept. 11 terror attacks, the conclusion of the State of the Union address and high traffic holidays such as Christmas and New Year's Day, Schumer said.

"We must remain vigilant in protecting ourselves from future terror attacks, and when intelligence emerges that provides insight into potential vulnerabilities, we must act with speed," Schumer said.

Under the current program for airlines, travelers' names and other identifying information are cross-checked with the terror watch list to select passengers for enhanced screening and prevent possible terrorists from boarding planes.

Schumer wants that program to be applied to stables when passengers purchase their passage before mounting the horse.

Schumer noted that the nation's horse system transported 90,000 passengers in 2010 and carries 90,000 passengers every day on 90,000 different horses.

Not all horseback riders were enamored of the plan. "Sounds like a big load of horseshit to me," said noted equestrian 'Cap'n' Ignatius R. Transit. "Like something you'd read in the Post."

Self-fulfilling prophecies at Willets Point

Adam Lisberg reports that lobbyist Richard Lipsky, disgraced by police allegations that he conspired with clients to bribe Senator Carl Kruger with at least $252,000, has quietly resumed at least some of his work. In particular, Lisberg reports that articles are being posted "in a style strongly reminiscent of Lipsky’s" to one of his biggest clients, Willets Point United.

Lisberg was able to recognize Lipsky's online style instantly, because Lipsky basically carries around a giant firehose of shit that he targets at any corporation or organization involved in city politics who hasn't hired him in the past six months or so, and at any government official who hasn't done him any favors recently. He has particular scorn for Our Billionaire Mayor, who can take it, and has recently targeted new State DOT Commissioner McDonald, who probably can too.

Lipsky seems to be incapable of recognizing a political ally who isn't currently paying him money, so he shoots off gratuitous broadsides at old enemies, like this one about bike lanes. Now it seems to me that if one of you're trying to stop a large highway project, you would naturally find common cause in advocates of non-motorized transportation, but Lipsky is so locked into his us-and-them mindset that it doesn't seem to occur to him that cyclists might support Bloomberg when he's doing something they like and oppose him when he's doing something they dislike. Lipsky's mercenary perspective also seems to prevent him from contemplating the possibility that someone might choose their alliances on principle.

Well, your Cap'n is a man of principle, and a strange bedfellow too. I think Bloomberg is a jerk, but I support him when he builds bike lanes and transit projects. I think Lipsky is a jerk, but I support him when he fights a highway project, which is what he did today.

So with that introduction, let me tell you about this Willets Point project. Here we have a functioning district of car repair and scrap metal shops that's located right between the stadium where the Mets play and downtown Flushing. It's right near LaGuardia airport, and lots of people pass it on the #7 train or on the highway. Somebody got the idea that the land is too well-situated to be left to a bunch of car mechanics, so they decided to declare it blighted, evict the owners through eminent domain, and build a mixed-use complex. Politicians left and right have signed on to the thing. The aerial rendering on the main page looks like your typical Corbusian yuck, but the street-level ones look more promising. There's a lot more detail in the DGEIS Executive Summary.

The problem is that all the people involved are convinced, as a former aide to the Mayor said to me, that "people in Queens, they love their cars," and everyone will drive to this new complex. Yes, it's right next to a large express subway station, but as Lipsky points out, even at its eastern terminus the #7 train is at capacity during rush hours, being fed by a network of buses. If people want to use transit, there's not really anywhere for them to go. So Lipsky and friends assume, just like the Economic Development Corporation, that they'll all drive. As a result, the city plans to construct between 6,000 and 8,250 new parking spaces, as well as new on-ramps to the Van Wyck Expressway. It's the on-ramps that Lipsky is challenging on behalf of his clients, hoping that the city will abandon the entire plan if they can't build them.

Honestly, it took me a while to see that there's a great big flaw in the logic that both Lipsky and the City are using to justify their conclusion that there will be 80,000 new car trips a day to and from this development. The highways, of course, are also at capacity. If anything, they're more clogged than the subways at rush hour. So it really seems to me that if you build transit at Willets Point you'll get people using transit, and if you build roads and parking garages you'll get people driving.

There are a number of things you could do to tie this development into the transit system better. You could build a spur off the #7 line, perhaps the beginning of the long-planned College Point Extension. You could build an AirTrain (elevated driverless metro system) from Jamaica to LaGuardia Airport. You could build at-grade physically separated light rail from the Mets train station east through Willets Point along Northern Boulevard. You could build a bus terminal connecting to the Mets train station, and redirect many of the lines that currently terminate in Flushing to the new terminal. You could increase the frequency and coverage on the Port Washington Branch of the Long Island Railroad so that it becomes more like a subway.

Yes, all those things are expensive, but think about it this way:

8,250 parking spaces at $28,000 a space = $231 million. Add the $55 million that the City wants to spend on the highway ramps, for a total of $286 million. That could build you 1.8 miles of AirTrain at $155 million a mile, or 4 miles of light rail at $75 million a mile.

My per-mile figures are probably off, so Alon Levy, o guru of per-mile construction costs, please enlighten if you have a chance.

Oh, and for those who are wondering why they should care: we're talking about 8,000 new households in the city, a tenth of one percent of the total. Do we want them identifying themselves and voting as drivers, or as transit riders?

The glamour of the High Line

If you're from a city like Chicago, Philadelphia, Jersey City or Saint Louis - or possibly San Francisco or Wilmington, California, Toronto or Vancouver, Canada, or Sheffield or Manchester, England - or maybe even Harlem or my home borough of Queens, or a host of other cities - you've got an old railroad or car viaduct in your town, and at least one person is saying, "what if we turned it into a linear park, like New York's High Line, or Paris's Promenade Plantée?"

If you've got anyone like that in your town, you should print them out a copy of Witold Rybczinski's excellent discussion of the economics of the High Line, and why it probably won't turn your run-down industrial neighborhood into West Chelsea unless you've got (a) dense commercial and residential development nearby, (b) a subway two blocks away, (c) lots of well-connected gay men and artists living and working within a short walk, and (d) LOTS of money, more than your town can really afford to spend.

Oh, and if your town didn't fight a major freeway revolt just a couple blocks of your wannabe High Line, it's probably too car-oriented to get anything like the High Line.

Finally, show them the great slideshow embedded in this Greater Greater Washington post about "Freedom Park" in Arlington, Virginia's Rosslyn neighborhood. Rosslyn does have art and a metro station and is fairly walkable, but it also has three large highways nearby, and the density is nowhere near as high as in Chelsea. The result is a pleasant place to have lunch, and I'm sure it's a tremendous improvement over the elevated highway that used to be there, but it's no High Line.

If you want a true pedestrian revitalization you need to challenge the dominance of cars in the city. Everything else is just an empty escape fantasy. You can't become Kim Kardashian by buying her "signature scent," you can't become Mary-Kate Olsen by wearing her "celebrity clothing line," and you can't become New York or Paris by putting up an elevated walkway to nowhere.

When taxis are too cheap

As I wrote last month, taxi service has "an availability problem in Manhattan at peak periods. During rush hour in the rain you can stand for a long time, and fights over taxis are not uncommon." Whenever you have a set price for something regardless of supply and demand, you're going to get gluts and shortages, and there are shortages at peak times in Manhattan.

It's not always your typical rush hour. Back in the 90s, the Tuesday Night Skate would often ride up Sixth Avenue around 10-11PM, and when we got to the Rockefeller Center area there were always people standing with their hands raised. At first I thought they were giving us high fives, but they ignored me when I got closer. Eventually I realized that they were hailing cabs. There were quite a few of them, and I think they had just gotten out of Broadway theaters or Radio City Music Hall. You see the same scene on Bleecker Street, or anywhere there's evening entertainment.

Some people have opted out of the system entirely. At the Trump luxury condos on Riverside Boulevard, the city is considering setting aside curb space for the black cars that the residents have hired because taxis won't cruise that part of town.

These shortages are bad for the city. As anyone who's ever waited for a cab knows, they're a special kind of pain in the ass because you have to be constantly alert. If you go into the newsstand to get some Altoids, a cab could go right by and you wouldn't see it. If you get too wrapped up in that tweet you're sending, that jerk in the suit could grab your taxi. Meanwhile, you and that jerk in the suit, and everyone else with their hands in the air on Columbus Avenue, are standing around waiting when you could be doing something productive with your time, or at least something fun or relaxing.

The low prices are bad for cab drivers. If the fares could rise to meet demand, the drivers could potentially make enough during rush hours to pay their rent for the day. Then they could go take a nap or work on their novels instead of cruising the island like madmen. That would work for a while, at least until the medallion owners figure out what's up and jack up their rent.

Of course, the combination of low set fares and artificially scarce supply is particularly moronic.

The ideal would be a dynamic pricing system. I've mentioned "the thumb" before - the device that Douglas Adams invented for the Hitchhiker's Guide to the Galaxy that allows a user to flag down a passing spaceship. In the comments, Nathan H. linked to a review of Uber, which is essentially a new car service "base" that works via text message or iPhone or Android app.

Uber's price system is also fixed, a bit higher than the yellow cabs, but their Twitter feed is full of apologies for shortages. That may be good marketing strategy during the product launch, but people will abandon the system if it's not reliable over the long run.

With a Thumb system like this, you could vary the price depending on the number of hails from a particular area at a given time. It could be a $7 drop charge at 3PM on a Tuesday, a $2 drop charge at 10AM on a Saturday, and a $20 drop charge at 11PM on a Friday. You could probably even build price discrimination into it, offering loyalty fares and allowing customers to set price ceilings. You could even allow competitive bidding, so that you could outbid that jerk in the suit.

Even without this kind of dynamic pricing, though, you could still vary prices by time of day. The original Bloomberg congestion pricing plan included a $1 congestion surcharge for taxis between 6AM and 6PM. The Carl Kruger plan that was eventually adopted kept the taxi surcharge (reduced to 50 cents), but imposed it 24/7.

For the sake of cab drivers and customers, the city should adopt a pricing plan with at least three tiers, with the top tier high enough to discourage waiting and the low tier low enough to make it worthwhile to cruise the "inner boroughs" at some times of day. And of course they should remove limits on the overall supply of yellow cabs.

Vested interests

On Friday, I quoted Ruben Diaz, Jr. ("the Reasonable") about the City's borough taxi proposal: "We want to find a way to decriminalize street hails and at the same time not devalue the yellow medallions that so many people have invested so much in." In a comment on my last post, longtime reader NY Taxi Photo echoed this, "paying for a medallion is paying for such permissions, and shouldn't be limited after such a contract is purchased."

These quotes really encapsulate everything that I've been fighting against for the entire existence of this blog, and everything that Streetsblog has been fighting against. Brooklyn Spoke found a great quote from "Senior for Safety," Jasmine Meltzer back in 1984: "All we wanted was what we had." Meltzer was talking about the right to double-park without being subject to the penalties specified by the law, but Doug observed that she could just as well be talking about the ability to double-park on Prospect Park West without being uncomfortably close to the speeding cars.

All Meltzer wants is what she had. That's all that the taxi medallion owners want too. That's all America's drivers and politicians want, too - the cheap gas and open roads that they had. All East 57th Street business owners want is the parking they had. All Tim Hughes wants is the right he had to drop off his bottled water and Goya beans at his curb on 34th Street. All Kvetch Greenfield wants is clear streets after a snowfall, which he had.

You can say that about almost every post I've ever written, every Streetsblog post, every post by Larry Littlefield. People fight for safety, they fight for fairness, they fight for clean air, they fight to keep our energy supply from being used up. They come up with an idea that will make a contribution towards one of these things. Sometimes it's a small idea, sometimes it's a big idea.

Sometimes it's not an idea at all, or not an idea about carnage or global warming or access. Sometimes it's just a change in something else, like the size of the snowfall, or the number of snowfalls, or the size of the new subway stationhouse. But whatever it is, it can't get in the way of what "we" had.

The law is irrelevant to "what we had." Sometimes it is explicitly respected by the law, like the "right" to free bridges paid for by income and sales taxes. Sometimes the law says nothing about it, like the "right" to own a house or a taxi medallion that never goes down in value. Sometimes it is actually forbidden by the law, like the "right" to double park without being ticketed. Legal or illegal, if "we" had it, it must continue.

Notice the "we" there. Because "we" doesn't mean the people who have had nice wide sidewalks on Broadway. It doesn't mean the people who've (sorta) had crosswalks clear of snow. It doesn't mean the livery cab drivers who've had the right to pick up street hails in the outer boroughs without too much enforcement. It means the powerful: the drivers on Broadway, the drivers on the snowy streets of Queens, the yellow cab medallion owners.

Sometimes it's important to realize that what "we" had hurts other people. What "we" had contributes to hundreds of deaths every year. What "we" had is causing crazy tornadoes in Massachusetts. What you had is causing oil wars. What "we" had is stifling the economy of the United States.

Sometimes we need to give up some of what we had so that others can have a little more. Now we need to give up some of what we had so that our grandchildren can have anything. There's a word for that: community.

Screwing the livery cab drivers

Before I say anything more about taxis in New York, I should point out that I have a financial interest in this issue. I have a business relationship with a livery car service, and another business relationship with an insurance agent for livery cars. If they go out of business it could affect my income.

I should also point out that they're not very reliable customers, they're a small part of my income, and I don't feel much loyalty towards them. If I felt it were necessary to achieve my goals (listed above), I wouldn't hesitate to promote policies that could reduce or eliminate their ability to pay me. But I do know them, and I think that's something you should know.

The fact is, as I wrote a month ago, the availability of taxis does contribute towards our goals, as it complements the public transit system to provide a complete transportation solution. This is supported by a recent guest piece for the Urbanophile showing maps of taxi hail density in Boston. However, in order to be really convincing that map would have to show taxi hails per capita and per workstation, to control for population density.

In the comments to my last post, Stephen Smith asked, "But would legalizing outer borough livery hail really affect the price of medallions? If the numbers that I common hear recited are true – that only 3% of all medallion fares come from outside Manhattan below 96th and the airports – then they should experience a 3% drop in value, at most."

This is an excellent question, and it seems pretty clear that Stephen is right - the livery cabs are not a threat to the medallion owners. The other explanation is that the outer borough taxi hails are perceived by the medallion owners as a potential revenue source that the livery drivers are squatting on. The city is essentially asking for a $300 million bribe, and promising in return to drive the livery cabs out of the street-hail business so that the medallion cabs can take over.

The livery cab owners (and their insurance agents) are pretty mad about this, and are planning a rally for Monday. The plan needs to be approved by the State Legislature, and the livery owners are trying to get it modified. Will they succeed? Maybe, if it comes down to fairness. The livery cab owners have put in years of "sweat equity" picking up lower-income passengers. Why should the medallion owners get to muscle in, just because they have some extra cash?

The livery drivers will probably not succeed if it comes down to raw power: 22,000 middle-class Latinos and Pakistanis against the politically connected, financially endowed owners of 13,000 medallions. The outer-borough populist politicians have generally not bothered to say anything in support of the livery cab owners. The main exception is the Dominicans and Puerto Ricans. Some of them, like Assemblymember José Rivera, have actually driven livery cabs in the past.

Why not just expand the yellow cabs?

Last week I discussed the City's plan to add 1,500 new citywide taxi medallions and 6,000 new "borough taxi" medallions that would only allow the driver to pick up passengers outside of Manhattan (and presumably in Manhattan north of 96th Street). I mentioned two alternate proposals that would be much simpler: to just add citywide medallions until drivers started cruising the boroughs, and to simply convert all the existing livery cabs to "borough taxis" with the right to pick up street hails. Why didn't the City choose one of those?

There are three reasons I can think of. One is that the medallions would be auctioned off. As Joel put it in the comments, "I estimate the value of outerborough medallions at $50,000 each. $50,000 x 6,000 is a lot of money." $300 million to be exact. The City is looking at budget shortfalls, and would love to be able to plug $300 million of those holes without raising taxes.

Another reason for this two-tier approach was articulated by the Administration's designated mediator with the livery cabs, Bronx Borough President Ruben Diaz, Jr. (also known as "the reasonable Ruben Diaz"). Diaz said, "We want to find a way to decriminalize street hails and at the same time not devalue the yellow medallions that so many people have invested so much in." That last part is the key.

The idea that the government has a responsibility to maintain the "value" - that's resale value, mind you - of medallions. makes me so hopping mad. We've got enough investor value to prop up, including FDIC-insured bank accounts and the various types of government bonds. We really didn't need another one, but that's what we set up in the 1930s - essentially a backdoor bond system.

The Master Cabbie has an interesting introduction to the economics of taxi medallions. He claims that they are a good investment because their values are countercyclical - that they go up when the rest of the economy goes down, because the supply of taxi drivers increases. This makes them a good hedge against cyclical investments like the stock market.

Selling bonds can benefit a city in two ways. First, they bring in money. Second, they turn the bondholders into allies on the project, because the bondholders want to recoup their investment. So the taxi medallions bring in money, but they also attract powerful champions for the taxi system.

In return, the city has to repay the bonds when they come due - except they don't buy back taxi medallions, and the medallions never mature. They also need to keep the bond market up - but that's so that they can sell more bonds when they need to. People like Ruben Diaz Jr. want to keep the value of taxi medallions high only because the medallion owners are wealthy and powerful, and nobody wants to piss them off. Which is not really a good reason.

Basically, the taxi system in New York is being held hostage by a small group of powerful investors who don't want to see their investment diluted. And Bloomberg, Goldsmith and Yassky don't seem interested in doing anything about it.