I enjoyed columnist Steven Pearlstein's initial comments about Washington's taxis [Business, May 29]. Taxi drivers represent one of our city's most laudable and interesting socioeconomic institutions. I have marveled at the political sophistication of many drivers I have encountered, and I have appreciated their courtesy. Many of Washington's taxi drivers own their vehicles and take pride in their appearance.

But when I realized where the column was heading, my jaw began to set: the taxi medallion system.

The medallion system limits the right to operate taxis to investors with deeper pockets than the people who will drive them. Buy a medallion and, in effect, you buy a monopoly. In cities that use the medallion system, few cab drivers can afford to buy a medallion. Drive a cab without a medallion, and you are defined as a pirate.

The price of medallions has risen about 13 percent a year, for many years having outperformed the Dow Jones industrial average. They are considered to be excellent financial investments. The would-be driver-entrepreneur is frozen out because a medallion usually costs a lot more than the cost of a new cab.

In April, New York City medallions, sold in pairs (one pair per taxi), brought about $700,000 a pair. Ever try to find a taxi in the Big Apple?

If you want those Washington cabbies who usually appear at the wave of a hand to be put out of business, go with Mr. Pearlstein. One more American door of entrepreneurial opportunity for the less well-heeled will be shut, and a lot of nice, hardworking people will go with it. And wave bye-bye to the easy-to-find, low-cost taxi.

ERNEST LENT

Washington