Obviously, something went wrong as the barrier to enter what has traditionally been a doorway to the middle class is now closed tighter than before.

What happened? In 1995 this paper editorialized in favor of a plan by John Kramer and William Mellor to open up urban tax markets that won an award in the Pioneer Institute’s Better Government Competition. Their proposal provided for taxi licenses to be issued for a reasonable fee to anyone with a safe vehicle, insurance and a clean driving and police record.

Indianapolis, Cincinnati, Philadelphia and Denver adopted the free market plan, but Boston did not. Instead, Boston held two traditional auctions of medallions in 1999 and 2000, the first since 1934. Proceeds of the first went into city coffers, and money raised by the second was used to help finance the local share of the Boston Convention & Exhibition Center in the Seaport District.

Today, all four of those cities have fares that are much lower than Boston’s, which are fourth highest in the nation.

So the net effect of failing to follow free-market principles is an oligopoly that has become further entrenched over time, while those who must use cabs are worse off than before.