Taxi Medallion Prices Are Plummeting, Endangering Loans

[corbe]

Taxi Medallion Prices Are Plummeting, Endangering Loans

Ride-sharing apps are distressing traditional cab companies (and their debt).

by
Polly Mosendz and Shahien Nasiripour
‎January‎ ‎30‎, ‎2017‎ ‎11‎:‎14‎ ‎AM   


There's a good reason your cab driver is so cranky: His livelihood might be teetering on the edge of default. According to a recent presentation prepared for Capital One Financial Corp. investors, some 81 percent of its $690 million in loans for taxi medallions are at risk of default.

Medallions, the small metal shields affixed to the hoods of taxi cabs, are issued by the local taxi authority and effectively allow the cabs to operate legally. Owning one used to be akin to owning a gas-guzzling, money-printing machine. Medallions in New York City traded at more than $1 million in 2014, but today's prices are about half of that.

<..snip..>

https://www.bloomberg.com/news/articles/2017-01-30/taxi-medallion-prices-are-plummeting-endangering-loans

[Cyber Liberty]

Am I supposed to be feeling bad about this?  Because I don't.

[geronl]

With government-enforced scarcity of taxi services at an end because of Uber and Lyft, this was inevitable. The lack of real competition was always a bad thing.

[geronl]

Now they need to end rent control.

[Wingnut]

Am I supposed to be feeling bad about this?  Because I don't.

We are ruining their pity party.

[Frank Cannon]

If nobody is following along, this is going to plan for Uber. First they drive the conventional taxi services out of business by offering a better service. After they take over these markets, they are going to stop using drivers and instead use driverless cars. At the end Uber will be filling their pockets with money and another load of people will be on welfare.

[Cyber Liberty]

We are ruining their pity party.

I'd pee on their electric, zero emission lanterns except I'd get a big shock in my big wanger.  Mrs. Liberty would object, and rightfully so.  You understand.

[Cyber Liberty]

If nobody is following along, this is going to plan for Uber. First they drive the conventional taxi services out of business by offering a better service. After they take over these markets, they are going to stop using drivers and instead use driverless cars. At the end Uber will be filling their pockets with money and another load of people will be on welfare.

If Uber can pull that off, it would lead to spin offs that would revolutionize traffic.

[Sanguine]

Am I supposed to be feeling bad about this?  Because I don't.

Yeah, me either.   

[Oceander]

The cabbies themselves almost never own the medallions; they only rent the car from the company that owns the medallion.  If the medallion loans default, the lenders will take possession of the medallions, but will have to keep them on the road to recoup their loans, so cabs won't go away. 

[IsailedawayfromFR]

Like Carbon credits, this is nothing but government-created value.

It has no real value in the world we live in.

[geronl]

The cabbies themselves almost never own the medallions; they only rent the car from the company that owns the medallion.  If the medallion loans default, the lenders will take possession of the medallions, but will have to keep them on the road to recoup their loans, so cabs won't go away.

but it won't recoup the loans with real competition out there

[Fishrrman]

If Uber and other similar services keep growing, how long before the taxi medallions sell for, say, $25,000. Or even less?

[Applewood]

If nobody is following along, this is going to plan for Uber. First they drive the conventional taxi services out of business by offering a better service. After they take over these markets, they are going to stop using drivers and instead use driverless cars. At the end Uber will be filling their pockets with money and another load of people will be on welfare.

I don't believe Uber will go completely driverless.  I still think they will need someone in the driver's seat to "step in" when the technology fails and it will fail.  No way will the technology ever be 100% perfect.  So if the driver is willing to learn the technolobgy and how to use it, he/she will still have a job.