Uber and Lyft are rapidly democratizing the taxicab industry by eliminating barriers to entry for small businesspeople who want to enter the market. Not inconsequentially, a few one-percenters who had major investments in the oligarchic structure that outpaced real estate, gold and oil are seeing their wealth redistributed to those same small businesspeople, and to the riders, who are enjoying less-expensive transporation costs. USA Today has the story.
The taxicab industry, in collusion with their crony politicians in statehouses around the country, aren't taking this lying down.In Chicago, which has the country's second biggest fleet with roughly 7,000 taxis, the median sale price for a medallion hovered around $70,000 in 2007 before reaching a median sales peak of $357,000 in late 2013.
Since reaching that high point more than a year ago, the value of medallions in the Windy City have sharply declined and sales have ground to a near halt—with the city recording only seven medallion transfers in the first quarter of 2015—as the median sale price fell to about $270,000.
The steady slide, which also is on display in New York, Philadelphia, Boston and elsewhere, has left many owner-operators and big fleet managers pessimistic about their once prized assets.
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As a result of the booming value, the vast majority of medallions in big metros like New York and Chicago were gobbled up over the last several decades by investors and companies that rent the medallions to drivers.
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In New York, taxi mogul Evgeny Friedman is locked in a court battle with Citibank, to whom he owes some $31 million after some medallion loans matured.
Citibank is looking to seize 87 of Freidman's 900 medallions in New York, which has seen medallion prices drop to about $870,000 last fall from a peak of about $1.2 million last spring. Freidman, the biggest medallion owner in the USA, also owns fleets in Boston, Chicago, New Orleans, and Philadelphia.
What say you? Is this democratization of the industry a good thing, or should control of the market stay in the hands of the existing power structure?In New York, the Taxi and Limousine Commission is weighing a proposal that would create an agency that oversee the implementation of smartphone apps used in the taxi industry.
Under the proposal, the smartphone app operators would be required to approval before modifying their apps or face fines—a regulation that a powerful coalition of Silicon Valley companies told New York City Mayor Bill de Blasio would stifle innovation.
"While we do not develop software for transportation providers, we are gravely concerned by the unprecedented decision to subject software available around the world to pre-release review by a city agency," wrote the Internet Association, the tech coalition that includes Facebook, Google and Twitter.