By DAN ACKMAN

Mayor Bloomberg has lent his support to the Taxi and Limousine Commission raising fares.  That's good since cabbies haven't been granted an increase since 1996.  But the new mayor needs to appoint a new TLC chairman who can give a top-down review to the city's taxi system.  A better system could provide improved service and a better living for drivers at the same time. 

The current system is a hodge-podge created to accommodate political power blocks. First there are the medallion or yellow cabs-- 12,187 of them.  That number has remained almost constant since the great depression, even as the overall level of traffic and activity in the city has boomed.  Because more taxis are needed, the city and the TLC have authorized an increasing number of livery cabs, which make radio calls mostly in the outer boroughs, and so-called black cabs that service Manhattan offices.  

These cabs-- which now outnumber yellow cabs by roughly three-to-one-- allow some passenger at some times to opt out of the medallion system. But they do nothing to solve the essential problem faced by many New Yorkers: it's often hard to get a cab. 

It's considered a near-political impossibility to increase the number of medallions. This is because the current medallion owners paid for their medallions and they sell for roughly $250,000 each. If the city simply adds to the number of medallions, that would lower the value of current medallions and they would, quite correctly, scream bloody murder. 

But the city needed more cabs, so it allowed for the creation of non-medallion cabs.  This system benefits the City Council since the council directly authorizes the creation of taxi stations, which means that businessmen interested in starting livery services or opening new bases are a ready source of campaign finance. 

Meanwhile, the relative shortage of yellow cabs has allowed the medallion owners to lease their medallions at high rates. Under the current system, drivers pay about $100 per shift to rent a car and medallion-- a fixed cost no matter what they earn in fares. Thus drivers are deep in the hole before they start work.  So is it any wonder that cabbies sometimes drive maniacally: they are playing catch-up. 

Then, when business is good-- when there are a lot of people trying to hail cabs-- drivers are more likely to end their shifts early because they can make the same amount of money faster.  But overall, incomes are low enough (oddly, the TLC doesn't try to track driver incomes) and conditions bad enough, that a driver shortage keeps many cabs idle. The fear among hard-working cabbies is that if rates do go up, the medallion owners will simply increase lease rates, leaving them just as harried and no better off financially. 

The TLC under Mayor Giuliani was chaired by Diane McGrath-McKechnie, a shrill Republican operative and party-donor with no experience in the taxi industry.  She was heavy on enforcement of TLC rules, but notoriously indifferent to both driver and medallion owner concerns.  Drivers and owners, all dependent on TLC-granted licenses, lived in fear of her retribution for any protest.  The current TLC Chairman is Matthew Daus, by all accounts a nicer fellow, but he is a holdover from the McGrath-McKechnie regime.  Is it likely they will bring fresh views to the commission? 

What to do? One elegant solution would be to give each medallion owner a second medallion.  This act would, of course, reduce the value of each medallion, but everyone who had one would now have two. At a stroke, there could be twice as many yellow cabs, but the political opposition from owners would be mollified.  In order to attract drivers to man these added cabs, the medallion owners would have to reduce the lease rates dramatically.  They also might be forced to clean up the squalor typical of taxi garages in order to retain drivers. 

By this simple device, drivers would earn more, owners would be at least as well off, and passengers at peak hours or during rainy days would no longer be stranded with their hands in the air.