It's no surprise that ridesharing outfits like Lyft and Uber are disrupting the taxi business
through lower pricing and technological advantages. However, it's now
clear that these app-based upstarts are also hitting taxis where it
really hurts: the value of owning a taxi service. A New York Times analysis
reveals that the prices of medallions, which are necessary to operate
taxi fleets in numerous US cities, have plunged sharply in the past
year. In Boston, Chicago and New York City, the price of a medallion
has fallen between 17 to 20 percent. Ridesharing is affecting how often
cities and owners can sell medallions, too. Philadelphia is cutting
prices just to sell these items at all, and half of New York's recent
sales (a mere 10) were foreclosures -- the former owners just couldn't
afford to stay involved.
The data doesn't directly correlate to ride volumes, so it's hard to know exactly how it translates to lost business. However, it provides a pretty good bellwether for the taxi industry as a whole. Would-be medallion buyers simply don't see much worth in cabs, even in New York (where regulations limit what ridesharers can do); it's hard to justify paying a six-digit sum to run a taxi service when your company could easily go bust. This isn't to say that old-school hired transportation is going away for good, but it's certainly not the safe bet that it used to be.
Image credit: AP Photo/Mark Lennihan
Content Credit: Engadget
Source: New York Times
The data doesn't directly correlate to ride volumes, so it's hard to know exactly how it translates to lost business. However, it provides a pretty good bellwether for the taxi industry as a whole. Would-be medallion buyers simply don't see much worth in cabs, even in New York (where regulations limit what ridesharers can do); it's hard to justify paying a six-digit sum to run a taxi service when your company could easily go bust. This isn't to say that old-school hired transportation is going away for good, but it's certainly not the safe bet that it used to be.
Image credit: AP Photo/Mark Lennihan
Content Credit: Engadget
Source: New York Times
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