Since 1997, five papers have been published in top 5 economics journals debating the labor supply elasticity of New York City cab drivers. The most recent paper by Farber (“Why You Can’t Find a Taxi in the Rain and Other Labor Supply Lessons from Cab Drivers,” Quarterly Journal of Economics, 130 [2015], 1975-2026) uses an instrumental variable (IV) approach and finds that the unanticipated wage elasticity is positive, which is inconsistent with reference-dependent preferences. This paper finds that, after controlling for measurement error and division bias, the unanticipated wage elasticity is negative. Theoretical and empirical evidence is provided to show that the instrumental variable (IV) approach is inconsistent. A version of the neoclassical intertemporal model is proposed, where the anticipated wage elasticity is positive while the unanticipated elasticity is negative, which is compatible with reference-dependent preferences.