Taxi prices in most jurisdictions are regulated by a public transit regulator (there are some exceptions - Sweden deregulated taxis and every taxi can set its own price, you have to check the price sticker in the window before getting into make sure you're not going to get ripped off), as a tradeoff between affordability and taxi drivers being able to make a living. Medallions are there to keep the number of taxis down so that the taxis that do have medallions have enough riders to keep busy enough to make a living. Adding more medallions wouldn't lower the price, changing the regulated price would.