So one would have to get a $200K loan to become a taxi driver. And then if it doesn't work out for you after a year, you're toast since you can't re-sell it - no market for it, since everybody gets it directly from the government.
Now imagine you're a fresh aspiring immigrant just coming to New York. Who in his sane mind would loan you $200K with no collateral if you could just decide next year it's not for you and they couldn't even sue you - you have nothing. Who would drive the cabs then - bankers? There's not "anyone else" that could get a loan even of couple of thousands with no collateral and no way to recover it. The best you get is credit cards companies - they charge 20%+ APRs for a reason. Imagine having to pay off a $200K loan with 20% APR.
On the other hand, if you make the license cheap, the corruption potential would be overwhelming - if you have somebody distributing very limited supply of licenses costing $100 but allowing income of, say, $100K per year, an incentive for bribery and other trickery would be impossible to resist. Pretty soon the price would get close to the actual cost, only the difference will be pocketed by corrupt officials.
Now imagine you're a fresh aspiring immigrant just coming to New York. Who in his sane mind would loan you $200K with no collateral if you could just decide next year it's not for you and they couldn't even sue you - you have nothing. Who would drive the cabs then - bankers? There's not "anyone else" that could get a loan even of couple of thousands with no collateral and no way to recover it. The best you get is credit cards companies - they charge 20%+ APRs for a reason. Imagine having to pay off a $200K loan with 20% APR.
On the other hand, if you make the license cheap, the corruption potential would be overwhelming - if you have somebody distributing very limited supply of licenses costing $100 but allowing income of, say, $100K per year, an incentive for bribery and other trickery would be impossible to resist. Pretty soon the price would get close to the actual cost, only the difference will be pocketed by corrupt officials.