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The regulated taxi medallion system wasn't good for drivers either. It was good for medallion owners.

Before Uber, taxi medallions in New York were selling for around $1 million. These pricey medallions tended to get bought up by large companies that could afford the investment. Your driver likely couldn't afford one, so instead, drivers would rent a cab and medallion for about $100 per 12-hour shift, on top of the dispatcher fees.

This system was supposed to restrict the supply of cabs to ensure drivers earned a decent wage. Instead, all the value is extracted by the medallion holders.

Oh yea, it was a terrible system - even the concept of limiting the number of cabs is sort of silly - but if the medallions get as expensive as they did then I think it's a clear indication that something in the market is broken.

Still, that doesn't mean rainbows come out of Uber's bum - it was absolutely a market ripe for new competition, Uber just added that competition in a terrible manner.

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