On the Endangered Value of Taxi Medallions
"Every one of [the taxi industries regulation] requirements is a point of contention in the escalating battle between the cab industry and tech start-ups such as Uber and Lyft, which threaten to upend a pact that has long existed in Chicago and other cities: In exchange for all of this regulation, taxis have for decades held a government-backed monopoly. At the center of that bargain — and the debate over what form of transportation best serves the public — is the medallion."
Owners of taxi mdeallions have a lot to lose, potentially, if transportation network companies manage to take down the old regime: "In New York, taxi medallions have topped $1 million. In Boston, $700,000. In Philadelphia, $400,000. In Miami, $300,000. Where medallions exist, they have outperformed even the Standard & Poor’s 500-stock index. In Chicago, their value has doubled since 2009."
The biggest threat to the value of medallions right now is less obvious than just the loss of passengers: "The threat to medallion owners isn’t that they’ll lose passengers to these services. It’s that they’ll lose drivers — who have been aggressively courted by Uber. A taxi driver who doesn’t own a cab and medallion can earn comparable fares driving UberX passengers in his private car, without paying a lease fee." The questions about the future value of medallions as cities sort out their regulation of the transportation network companies, has paused the market on medallions, leaving owners in the lurch.
The article covers the issue both broadly and profoundly, but with this theme of the regulations represented by the medallion.
"Uber and Lyft say they want to strip away regulation that’s primarily anti-competitive and instead focus regulation on the things that matter, like safety and universal service. Medallions were created to do just that; they were a means, not the end."