NYC taxi medallions are one of the most interesting forms of pseudo property that exist in the world today.
A taxi medallion is simply a transferable right granted by the city to pick up passengers. However, through effective regulation, the dollar value of this right appears to be heading toward a million dollars.
What is the cost of a NYC taxi medallion? As of early 2009, the cost of a NYC taxi medallion trades in the price range of six hundred thousand dollars for the individual and almost three quarters of a million for the coveted corporate or mini fleet medallion. The industry has seen its overall value increase by almost five hundred percent since the year 2000.
NYC taxi medallions are a special license plate affixed to the hood of the yellow taxicab. It represents the license and legal right to pick up passengers from the streets without prior arrangement. No other car service or limousine service has this right.
This system was put into effect back in 1932 and by the sixties, all taxicabs were required to be painted yellow. The medallion number must be clearly visible on the taxicab roof light, on the license plate as well as on the door exterior and inside the vehicle.
The three types are the individual, the corporate or fleet and the handicap access medallion.
The individual medallion currently requires the owner to operate the yellow taxicab a minimum of 210 nine hour shifts per year. This underlying requirement guarantees the availability of taxicab transportation. It is not unusual for two taxicab drivers to form a partnership and share the medallion or for an individual owner to lease out the vehicle for the shifts he or she is not working.
The corporate or fleet medallion does not need to be operated by the owner. In fact, the owner need not have a NYC yellow cab operators license at all. The fleet medallion can be leased and often is on a shift basis, two shifts per day and for as much as $140 per twelve hour rental.
There is a network of brokers and agents who manage and lease taxicabs and medallions to independent drivers under daily, weekly and even longer term arrangements for investors. As an investment, the most interesting aspect of NYC taxi medallions is the valuation trends. In 2009, as the US and world economies are shrinking, the medallion value is soaring.
When banks, stock brokerages, construction companies and retailers lay off workers, one of the first places the unemployed workers seek income is in the taxicab industry. So, as the general economy suffers, the number of available taxicabs shrinks as more people seek them and those already working are forced to work more shifts as competition for fares increases.
There are a limited number of medallions and as of the beginning of 2009, the number is just over 13,200. This number was constant at 11,787 for more than sixty years. So why has the number of taxicab medallions increased? In the nineties, then Mayor Rudolph Giuliani approved New York City Taxi and Limousine Commissioner Christopher Lynn to conduct three auctions selling a total of four hundred medallions.
The sales netted the city approximately one hundred million dollars. The politics behind the sales was very intense and telling, as shortly after the sales were completed the industry applied for and received a rate of fare increase. After a few short years, another proposal for new auctions was approved by Mayor Michael Bloomberg.
The successive sales created slightly more than 1,040 new medallions. During these auctions, the handicap access medallion was introduced at a substantial discount to regular market prices. This was to entice owners to pay the high price of retrofitting vehicles with automatic ramps to accommodate wheelchairs. They were all sold and on a percentage basis, have risen in value more than other medallions.
To own a individual taxi medallion, a driver must have a New York City taxicab operators license known as a hack license. To obtain this hack license, a driver must complete mandatory training as provided by the Master Cabbie Taxi Academy in Queens, New York.
Weekly surveys of New York City taxicab driver income conducted by Academy Director Terry Gelber indicate earnings of more than one thousand dollars per week for the full time night shift driver and slightly less than one thousand for day shift drivers. Drivers who own their own car and lease the medallion tend to earn between one thousand and fifteen hundred dollars per week as do drivers who own both the car and medallion.
Besides the steady income, there is the possibility of upward appreciation in the taxi medallion value in the coming years. So if having one of the NYC taxi medallions interests you, investigate the requirements needed to obtain it.
If you are interested in having one of the NYC taxi medallions, begin the process by contacting the American Master Cabbie Taxi Academy located in New York City at 1-718-472-1699 or 1-800-955-8294 – David Lee Buster has the NYC hack license and is a writer for the academy.