The "consumer price index" is an artifically low government-created creature. Over the past several years, cost of living increases have no relation to the 2 or 3% "official" rate of inflation.

Now back to the topic at hand - yes that is a STEEP increase at once. On the other hand, at $35 a pop, cab drivers were probably barely covering their cost of even the trip. I don't know the particular system in NYC, but I assume its a highly regulated medallion-type system, topped off by some surcharge each time the cab passes through the airport. The driver has to wait, potentially, a LONG time in a staging area for fares, and then has traffic-laden driving. So a driver may get 4 or 5 trips in a "good" (12 hour) day. The net profit out of this isn't very much.

Again, I don't know the particular situation in NYC, and I wouldn't like paying this much, but I can see why it is. Also, there is still the option of the car services. And at least with the fixed rate, the issues regarding drivers taking advantage of riders is put to rest.