Chicago is auctioning 50 taxicab medallions through October 18, the first such auction in three years. But they won’t come cheap: The city will not accept bids less than $360,000. To put that in perspective, Barack Obama makes $400,000 a year as the leader of the free world.

Bids for medallions have increased almost fivefold since just 2006, when winning bids averaged $78,500. Since Chicago is still holding the number of legal medallions constant at 6,800, demand is clearly outstripping supply. This artificial scarcity can be rather lucrative for the city. Chicago is expected to raise $18 million in revenue through these auctions.

WATCH: How government restrictions make it harder to get a cab

Yet while capping the number of licenses has driven up prices, many cab drivers barely earn subsistence wages. Dr. Robert Bruno surveyed 711 cab drivers for a University of Illinois at Chicago study. In 2008, Chi-Town cab drivers earned almost $55,000 in annual gross income. But that’s before the cost of running their businesses is included. Once fuel, taxes, maintenance and insurance are accounted for, the average cab driver earns a little over $12,320 a year in net annual income. That $4.38 an hour—well below minimum wage.

Considering that many drivers are working-class immigrants, Chicago’s system—where only the 1 Percent can afford medallions—is incredibly perverse.

Plus, as Megan McArdle noted last year in The Atlantic:

“…there’s very little evidence that restricting the number of cabs improves the lot of the people who drive them, rather than the lot of the companies that, by and large, own the licenses…any excess profits from restricting entry tend to accrue not to the drivers, but to the people who own the right to drive.”

Unfortunately, Chicago’s medallion and license cap system is common in cities. One man owns 13 percent of all cab licenses in New Orleans. The Institute for Justice has long battled these cartels and is currently fighting anticompetitive transportation restrictions in Portland, Milwaukee, and Tampa. And IJ has helped open the market for “dollar vans” in New York City.

— Nick Sibilla

Nick Sibilla is a writer at the Institute for Justice