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Everyone pretty much assumed the emergence of Uber and Lyft in New York City would give yellow cabs a case of the blues. Now, new numbers show just how much the digital ride-hailing services have decimated the value of the city’s traditional taxis.
Crain’s New York Business reports that the value of taxi medallions – the nearly 13,600 metallic licenses, tightly regulated by the city, that allow yellow cabs to legally pick up fares on the streets – have fallen off a cliff in the past three years, plummeting from about $1.05 million in 2014 to $241,000 for a medallion sold this March. That’s a 77% plunge, based on those figures.
Ridership and revenue for yellow cabs are on the wane, too, though the picture isn’t nearly as grisly. The total number of taxi trips fell 11% to 123.7 million last year, and revenue dropped 9% to $1.8 billion.
Last summer, Morgan Stanley analysts estimated that yellow taxis’ overall share of trips had dipped from 84% to 65% from 2015 to 2016, ceding ground mainly to Uber but to fellow ride-share competitors Lyft, Via, and Gett as well.
The news is bad, but not catastrophic, according to Matthew Daus, a former commissioner of the Taxi & Limousine Commission (TLC). He told Matthew Flamm of Crain’s that he conducted an independent valuation with a CPA for a bankruptcy case that yielded a price tag of of $575,000 for an independent medallion. (There are two classes of medallions: independent medallions, sold to individual owners, fetch a modestly lower value than corporate medallions, which are held by companies with fleets of cars.)
It’s still a steep decline, but a far cry from the bottom-barrel price for the medallion sold in March.
The price of medallions steadily increased during the 2000s, thanks in part to the increased revenue generated by fare hikes, according to the TLC. Some peg the peak medallion value at $1.3 million in 2014.
But the bevy of new ride-sharing companies are fighting for fares, and the competition has made price increases impractical.
The demise of the yellow cab doesn’t appear imminent – it still commands a ridership majority, after all – but medallion holders are likely stuck with an investment worth fractions of its former value.