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3.5.1 3 Income per taxi net of operating costs (fuel, repairs, etc.) and driver costs (allowingowner-drivers an average driver wage) were low at about $4,400 per month in 1 988;considerably less than the cost to an owner of purchasing a taxi. This was estimatedin August 1988 at around $700,000 for a second-hand taxi with licence; typically anew owner would buy the taxi on a mortgage, with a down payment of $1 00,000 to$150,000 and payments over a 9-10 year period of $9,000 per month. With quotasimposed on the number of new taxi licences issued each year, the value of a taxilicence rose considerably from about $200,000 in the early 1980s to around$700,000 in 1988. With such high appreciation in the licence value, owners couldmore easily accept the low profits on the operation of the taxi itself. Also, it is wellunderstood by owners and drivers alike that large increases in taxi fares to bettercompensate increased costs would have a sharp impact on demand for taxi servicesand could in fact be counter-productive.53