The value of a medallion went from $200,000 in 2002 to over $1 million in 2014, then crashed to less than $200,000 soon after. At the time, much of the blame was placed on the rise of largely unregulated ride-hailing apps, such as Uber and Lyft.
Taxi Cab Medallions are just the name given to the license to operate purchased from the city. They were, likely, actual physical medallions to be displayed at one point. The reason why they’re so expensive is because they can be.
Just four years ago, the cost to purchase a New York City taxi medallion, an essential license needed to operate a yellow cab, hit $1.3 million . A hefty sum but worth it given the lucrative trade in shuttling New Yorkers around the city’s five boroughs.
There were 13,605 taxicab medallion licenses in existence. By July 2016, that number had dropped slightly to 13,587 medallions , or 18 lower than the 2014 total.
Uber appears more expensive for prices below 35 dollars and begins to become cheaper only after that threshold. In other words, generally speaking and for short-range trips, a taxi is more affordable. There are some caveats to this study to consider.
The medallion system is a government-created intentional constraint on the supply of taxicabs, and since historically cities have increased the number of medallions much more slowly than the growth in demand for taxis , medallions have generally been considered a great investment; though recently the increased supply of
Taxi drivers should be tipped 10-20% of their fare, which should be calculated automatically on the screen. Limousine and livery drivers , on the other hand, should be paid no less than 15% as their services are typically more deluxe.
According to the Bureau of Labor Statistics, New York cab drivers make about $32,000 a year. Uber claims the average salary for its drivers in the same city is above $90,000, presumably after the company takes its 20 percent cut from the driver’s total fares.
Hourly Wage for Taxi Driver Salary
|Percentile||Hourly Pay Rate||Location|
|10th Percentile Taxi Driver Salary||$12||US|
|25th Percentile Taxi Driver Salary||$14||US|
|50th Percentile Taxi Driver Salary||$17||US|
|75th Percentile Taxi Driver Salary||$21||US|
Afterwards, prices dropped and many of those who bought medallions at high prices, are now paying debts that average ranging between $500,000 and $600,000 dollars. Currently, the price of a taxi medallion ranges between $120,000 and $150,000 .
Cities Made Millions Selling Taxi Medallions , Now Drivers Are Paying the Price. At a recent meeting of the San Francisco Municipal Transportation Agency, angry taxi drivers who want the city to buy back their medallions , surrounded Kate Toran, who heads the city’s taxi program.
Fares. Contrary to popular opinion, taxi cabs in New York are not overly expensive . The average price of a standard journey in Manhattan is about $10. Minimum fare: US$ 2.50.
Not exactly. Most taxi drivers lease their cab from a cab company or fleet—although the more industrious cabbie will own his or her own vehicle (source). To make money for the day, drivers have to take in more money than the combined costs of gas and their lease.