Yellow taxis have become an icon of New York City, but their concentration around central Manhattan and the airports is undeniable. Many have complained that it's nearly impossible to catch a cab elsewhere in the city, and it's not difficult to note the paucity of the yellow cabs in the so-called outer boroughs. Currently, only yellow cabs are authorized to pick up passengers on the street who hail for service. To address this issue, a bill has been sitting at Governor Andrew Cuomo's desk that would authorize livery (black) cabs to pick up street hails in the outer boroughs. Currently, livery cabs pick up passengers on pre-arranged trips.
Aside from the access issue, proponents argue that this would generate millions for the city. Currently, drivers of the traditional yellow cabs spend hundreds of thousands of dollars to buy medallions, their exclusive right to pick up street hails within the city. By extending these medallion permits to livery cabs, "the tax revenues ... would be something like a billion dollars into the city’s budget," Mayor Bloomberg remarks.
Opposition comes from current yellow cab drivers, who argue that by leasing the right to pick up street hails to livery cabs, the value of their own medallions will be vastly diminished. On Tuesday, hundreds of cab drivers protested outside Governor Cuomo's office, urging him to veto the bill that would allow the livery cabs' operations. Furthermore, oppositions argue that "livery drivers in the outer boroughs would ignore prearranged pickups in favor of street hails."
Governor Cuomo has remarked that “the optimum goal is to design a plan that provides taxi access to the outer boroughs, access to the disabled, revenue for the city, and respects the medallion franchise.” The root cause of the problem is the current lack of cabs in outer boroughs. This disproportion is vividly illustrated by the fact that while 80% of the city's population lives outside Manhattan, 97% of the pickups are in central Manhattan or at the city's two airports, according to GPS data collected by taxi commission.
Most yellow cabs drivers stay within the airports and central Manhattan, where the demand for the cabs is the greatest. The situation is a microcosm of game theory practice. Each driver's dominant strategy is to stay in these hot-spots, for they're more likely to earn more revenue. However, if most drivers practice this method, all of them may be worse off, given that government intervention may deal with the lack of cabs in outer boroughs, through measures like authorizing the livery cabs, which would indirectly devalue all cab drivers' medallions. To settle this uneasy dilemma, an equilibrium needs to be sought that balances the desire of cab drivers to serve hot spots for more revenue, and the access for outer boroughs for citizens there. Within outer boroughs, secondary hot spots can be identified, including trains stations, shopping malls, sports venues, and other popular places. Monetarily incentives could be given to yellow cab drivers to pick up passengers from these "secondary hot spots" in the outer boroughs to compensate for their service in these less-profitable regions. This internal solution, if operational, may eradicate the need for external livery cabs and their rights to pick up street hails in the outer boroughs.
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