Wednesday, September 14, 2011

Can these taxi medallion prices keep on going up? Is it a bubble?

There is not a very high volume of trading of medallions. When they unleash five hundred new ones in one shot will the prices hold?

While they think there are too many cars they can't get enough taxis on the streets

And most of the time Manhattan looks like a parade of empty taxis and taxis pulled over by NYPD.

If you google " New York war on cars"

You'll see lots of posts denying there is any such thing going on. There surely is a war on taxis however. If you try driving a taxi for a few shifts in New York City you'll wonder how these taxi medallions could possibly fetch $975,000.00! To see how absolutely hostile the regulators are to taxi drivers just check out "Learn the lanes". It's now pretty much impossible to drop off or pick up passengers without risking a summons. Most New Yorkers hail their taxis in the crosswalk, and it's been that way for eons. Now it's more so because of the bus lanes, bike lanes, "floating parking lanes" (where it's still legal if there is an opening) and "mixing zones" where it is illegal but which cabbies must use because there is no opening in the floating parking lane. A cabbie who sees a potential passenger must in reality stop where that passenger is standing be it a bike lane , a crosswalk or a mixing zone. If he doesn't, well the cab right behind him will and the passenger will get into that one.

So then why is Bloomberg set on auctioning more medallions? Answer: He expects to net around a billion dollars. And why can these medallions fetch such astronomical prices? Answer: Because there are thousands of desperate people with hack licenses or seeking hack licenses (these are not to be confused with taxi medallions-the hack license has no resale value and is available only from the city government, the medallion is traded on the market).