Sorry, I didn’t explain that bit well at all - it’s not the medallion itself that makes it safer but when the supply is limited it’s easier for the government to set pretty strict rules. And, because the supply is artificially limited, the cost of compliance is more than “worth it" to the medallion holders. It’s not just being a landlord, there are a lot of obligations that come along with it.

It’s not something we care about in 2019 but medallion owners are required to provide a radio to drivers. That’s really important from a safety perspective before we all had cellphones. Without the medallion system a radio in a taxi would have been a safety luxury that most drivers couldn’t afford.

Medallion owners are also required to install the machines to accept credit cards. That helps the drivers not carry too much cash and again is a bigger investment than what a typical driver would be able to make on their own. Knocking down this barrier to entry is basically the only way Uber was able to exist. How many people would sign up to pick up strangers from the internet while carrying hundreds of dollars of cash? Not many, unless they really needed the money. But sex workers have to do that all the time because banking regulations make it almost impossible for them to even get a bank account let alone process a transaction for sex work.

There are also maximum lease rates that medallion holders are allowed to rent the taxis out to drivers. That goes a long way towards stopping the financial exploitation of a taxi driver who might be struggling to get out of a difficult financial situation or sending money back home to their family in another country. It’s also enforceable. So if a medallion owner is taking too much of a driver’s money the driver has recourse. When a pimp is stealing money from a sex worker they don’t have any recourse to stop it.

Another way that people in difficult financial situations are often exploited is through insane work schedules. It’s hard to say no to an extra shift when you need the cash. Medallions come with a limit on the number of hours in a row one driver can operate the vehicle.

Medallions also set prices, so the odds of getting into a dispute over the cost are pretty low. There’s no “he said she said” about the price after the fact. And if a customer doesn’t pay its easy for the driver to tell the police exactly what they’re owed.

And (at least until Uber came along) the cost of a medallion was so high that it wasn’t worth the risk of having it suspended or revoked.

You don't need supply limitations to safely regulate something. Look at food safety in kitchens. I think it's in practice used as a political excuse to justify a cruder political reality of creating a limited supply to create an environment of exploitation to extract money from in the first place. Taxi medallion holders are often a strong force in many local political battles for election.

When I talked to a taxi driver in Canada about his situation for example, he told me he has to pay $3000 at the start of the month, like house lease, and therefore he is $3k in hole. It basically forces him to work non stop doesn't let him do things like take one week off, because he couldn't rent the car for 3 weeks for example. It's one month or not effectively. At least with something like uber he said, he had flexibility, and I get the impression he would of made a similar amount anyway.

Also similarly, a lot of drivers prefer cash and pretend their card machine is broken. The laws say one thing, the reality is often another.

I suppose I’m of the view that any sort of license requirement limits supply and so the enforcement of kitchen safety at the threat of losing your restaurant license isn’t all too different. Taxis medallions are a contentious topic so perhaps it was a poor analogy.

In practice taxis demanded cash so they didn't have to report it and pretended the card machines were broken. Good riddance.