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Taxi Medallion Prices Plummet Under Pressure From Uber
HughPickens.com writes Most major American cities have long used a system to limit the number of operating taxicabs, typically a medallion system: Drivers must own or rent a medallion to operate a taxi, and the city issues a fixed number of them. Now Josh Barro reports at the NYT that in major cities throughout the United States, taxi medallion prices are tumbling as taxis face competition from car-service apps like Uber and Lyft. The average price of an individual New York City taxi medallion fell to $872,000 in October, down 17 percent from a peak reached in the spring of 2013, according to an analysis of sales data. "I'm already at peace with the idea that I'm going to go bankrupt," said Larry Ionescu, who owns 98 Chicago taxi medallions. As recently as April, Boston taxi medallions were selling for $700,000. The last sale, in October, was for $561,000. "Right now Uber has a strong presence here in Boston, and that's having a dramatic impact on the taxi industry and the medallion values," says Donna Blythe-Shaw, a spokeswoman for the Boston Taxi Drivers' Association. "We hear that there's a couple of medallion owners that have offered to sell at 425 and nobody's touched them."
The current structure of the American taxi industry began in New York City when "taxi medallions" were introduced in the 1930s. Taxis were extremely popular in the city, and the government realized they needed to make sure drivers weren't psychopaths luring victims into their cars. So, New York City required cabbies to apply for a taxi medallion license. Given the technology available in the 1930s, It was a reasonable solution to the taxi safety problem, and other cities soon followed suit. But their scarcity has made taxi medallions the best investment in America for years. Where they exist, taxi medallions have outperformed even the Standard & Poor's 500-stock index. In Chicago, their value has doubled since 2009. The medallion stakeholders are many and deep pockets run this market. The system in Chicago and elsewhere is dominated by large investors who rely on brokers to sell medallions, specialty banks to finance them and middle men to manage and lease them to drivers who own nothing at all. Together, they're fighting to protect an asset that was worth about $2.4 billion in Chicago last year. "The medallion owners seem to be of the opinion that they are entitled to indefinite appreciation of their asset," says Corey Owens, Uber's head of global public policy.. "The taxi medallion in the U.S. was the best investment you could have made in the last 30 years. Will it go up forever? No. And if they expected that it would, that was their mistake."
The current structure of the American taxi industry began in New York City when "taxi medallions" were introduced in the 1930s. Taxis were extremely popular in the city, and the government realized they needed to make sure drivers weren't psychopaths luring victims into their cars. So, New York City required cabbies to apply for a taxi medallion license. Given the technology available in the 1930s, It was a reasonable solution to the taxi safety problem, and other cities soon followed suit. But their scarcity has made taxi medallions the best investment in America for years. Where they exist, taxi medallions have outperformed even the Standard & Poor's 500-stock index. In Chicago, their value has doubled since 2009. The medallion stakeholders are many and deep pockets run this market. The system in Chicago and elsewhere is dominated by large investors who rely on brokers to sell medallions, specialty banks to finance them and middle men to manage and lease them to drivers who own nothing at all. Together, they're fighting to protect an asset that was worth about $2.4 billion in Chicago last year. "The medallion owners seem to be of the opinion that they are entitled to indefinite appreciation of their asset," says Corey Owens, Uber's head of global public policy.. "The taxi medallion in the U.S. was the best investment you could have made in the last 30 years. Will it go up forever? No. And if they expected that it would, that was their mistake."
The taxi's and/or drivers didn't stink like overcooked hard boiled eggs, and spoke some resemblance of English, I would use taxis. I'd rather walk or rent a car.
I'm selling [my taxi medallion] and buying something safe, like diamonds.
Especially because conflict-free cultured diamonds have no chance of threatening the De Beers cartel and the "diamonds and guns" that The Transplants sang about. "It's a wicked world that we live in. It's cruel and unforgiving."
</sarcasm>
Demand for rides is highly variable depending on tourist season, holidays, weather and sports. Medallions can not scale to maximum demand while also allowing for affordable prices throughout the year. Everyone knows that trying to catch a taxi in NY is an unreliable nightmare and one should always have a backup transportation plan.
It's too bad really, as regulation is badly needed for companies like Lyft and Uber. Ideally, DMV would require a second, stricter written and road tests for people who are going to drive for money. Then points would be subtracted from driving record for both traffic violations and run ins with the law, including cheating on the fare. We need to try to prevent psycopaths from picking up passengers, but not with an an onerous system based on scarcity.
http://hailacabapp.com/
It doesn't hurt to be nice.
I'm still confused about the relationships between all of these users.
So we have these Slashdot users and/or frequent contributors:
Can somebody explain to me who they all are, and which ones are the same person?
I've read that Barbara Hudson is the new name of tomhudson, who chose to switch genders or something like that? Is this true?
I've also read here that tepples is TripMaster Monkey? Is this true? If they are the same person, why does he or she use two different accounts?
And parent AC, are you saying that Hugh Pickens and Bennett Haselton are the same person, with your "teppels supports Bennett articles" comment under this Hugh Pickens submission?
Any clarification would be greatly appreciated!
Yours truly, /. Reader
A Casual
You know, people were panning germany for forbidding uber. But we do not have (as far as I can tell) a "medaillon" limit. All you need to be a legal taxi is :
* make a "taxischein" (driver license allowing you to transport people)
* Have insurance which allow commercial transportation of people
* Have a metered reader which the government checks ("geeicht")
None of which is an artificial scarcity like the medaillon mentionned.
And yet what do we see in the article here ? Artificial limitation in the country of the "free market" which are even worst than in Germany.
C. Sagan : A demon haunted world:
http://www.amazon.com/gp/product/0345409469/
visit randi.org