Preliminary numbers suggested the emergence of Uber and Lyft hadn’t damaged taxi-medallion valuations, that ridesharing was somehow more complementary than disruptive, but that didn’t make sense and appears to have not been true. In a New York Times’ “Upshot” piece, Josh Barro reports that medallions have indeed surrendered 17% of their worth since technologists took aim at the sector.
One thing regulated taxis could do to compete: Allow a few hundred of the medallion owners in popular Uber cities to participate in a pilot program which makes redundant the best strategies of the Peer Economy cars–smartphone hailing, cashless paying–adopting the most popular new practices of the profession sans the surge pricing. From Barros:
“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. In New York, which established its medallion system in 1937, that number is 13,437. The number has risen only gradually since the late 1990s, even as the city’s economy has boomed.
The turmoil in the medallion market has been obscured in part because publicly disclosed data about taxi medallion prices can be misleading. And the turmoil suggests that the taxi business, which has undergone little change over many decades, is now in the midst of a revolution.
‘I’m already at peace with the idea that I’m going to go bankrupt,’ said Larry Ionescu, who owns 98 Chicago taxi medallions. That might be overly dramatic; after all, Mr. Ionescu also compared Chicago’s pro-Uber mayor, Rahm Emanuel, to Nicolae Ceausescu, the reviled ex-dictator of his native Romania. It’s likely Mr. Ionescu remains a very rich man. In November, Chicago medallion sale prices averaged $298,000, well below the $357,000 price that was typical this spring, but far up from the $50,000 price of a decade ago.”