The taxi industry is in decline thanks to the likes of Uber, Lyft, and other similar companies. The long time crony arrangements cab companies have enjoyed for decades around the world are falling apart. The market has gotten a taste of the higher quality and in many cases lower prices of ridesharing companies and it likes it.
But one shouldn’t expect an industry built on cronyism to go down without a fight and in the attached article we witness another scrap in the shadow of impending market doom. This time in New York City, home of American cabbie culture and land of the million dollar medallion.
Or at least it was home to the million dollar medallion. Now banks are less inclined to finance taxi medallions as cabs are no longer seen as a good investment. Medallion prices have come down stranding some owners.
However at least one cab fleet captain in the city argues that taxpayers should save him from progress. He wants a bailout just like the banks Downtown got.
(From The New York Times)
Prices peaked in 2013, not just in New York but also in other large markets like Boston and Chicago. Prices have declined as taxis have faced competition from car service apps like Uber. At the top, the price for New York mini-fleet medallions, which may be owned by nondrivers, was over $1.2 million.
Medallions have typically been financed with debt, but creditors have become skittish because of falling prices. The lack of access to credit has caused medallion sales to slow to a trickle as buyers have faced great difficulty finding financing; this has also made it difficult for medallion owners facing loan maturities to sell.
Sorry but a market has winners and losers. That’s what makes a market. Medallion owners won for a long time but now the market has turned. Sorry if you over leveraged yourself but it’s not the taxpayer’s problem.