Until recently, taxi medallions have been a lucrative and secure investment in the U.S., increasing 500-700% since 2000
, and 1000% since 1980
. The taxi medallions are big business, with many single-medallion owner operators, but most medallions are concentrated in a small number of hands. In Chicago, the majority of its 6800 taxi medallions are owned by less than 200 entities. In Boston, 49% of all medallions are owned by just 51 entities.
Lease fees [payable by drivers to medallion owners for driving the cab] in Chicago can run up to $707 per week, but getting enough passengers is a gamble for the driver; in San Francisco, for example, it’s estimated that traditional cabs drive 50% of all miles empty. But the drivers still have to pay the lease fees. “The threat to medallion owners isn’t that they’ll lose passengers to [ride-sharing services.] It’s that they’ll lose drivers.” Drivers have been leaving traditional cab companies in, ahem, droves
. Why? No lease fees, more scheduling flexibility, and a much higher occupancy rate. Which leads to lower rents for medallion owners, reducing the value of the medallions themselves.
Chicago’s most recent medallion auction is shrouded in silence, leading many to speculate the Chicago medallion market has plummeted
. NYC medallion prices, too, appear to have stalled,
after decades of appreciation.
In other cities
, medallion owners are betting that upscale patrons will not want to use ridesharing services, and the price of medallions has skyrocketed. Or perhaps medallion money, an industry served by a network of financiers, brokers, and leasing companies, is flowing into cities with rideshare restrictions
Medallion owners are fighting; in February, they sued the city of Chicago
for allowing ridesharing services to operate outside of existing regulations, thereby reducing the value of their medallions. There is, however, evidence that taxis themselves operate outside of regulations without penalty
by refusing to go to minority neighborhoods, and refusing fares that are too short or too long.