NYC taxi meter and options pricing

QuestDB, an open-source time-series database, was used to analyze the economic impact of the antiquated taxi meter system on NYC cab drivers, contrasting it with factors like competition from Uber and Lyft. The meter system calculates fare based on speed, distance, and time, with a guaranteed $30 per hour and an optional component based on speed above 12mph, similar to financial options pricing. The study found that over the past decade, the average speed of NYC taxis declined significantly, reducing the optional fare component and resulting in substantial financial losses for drivers. This decline in speed is attributed to increased traffic, urban planning changes, and competition from ride-sharing services, leading to an estimated loss of up to $10 per hour per driver, or $1.2 billion annually for the industry. The base fare of $2.50 is intended as an incentive, but its effectiveness depends on the waiting time between rides, which has likely increased due to competition. The study suggests that if drivers are uncertain about finding the next passenger, it might be more economically viable to drive slowly. The dataset used for this analysis is available for public exploration on QuestDB's demo server, inviting further research into factors like weather impacts on fares and traffic conditions.