Super Pumped: The Battle for Uber

by Mike Isaac

Taxi owners knew they had to stop Uber. In some major cities, taxi owners had paid hundreds of thousands of dollars to purchase “medallions,” taxi-service permits required by the local government. Medallions could be absurdly expensive, upwards of a million dollars in peak markets like New York City. Drivers and dispatchers took out huge mortgages to buy them. The limited number of medallions created an artificially constrained market, which meant cab drivers and taxi company owners could charge enough to earn a decent living (and pay for the medallion.) Then Uber showed up. The medallion system—a market based entirely on scarcity and exclusivity—was threatened to its core.

The taxi market explained