How Many NYC TLC Drivers Rent Their Vehicle?

We estimate 26% of the NYC TLC fleet, excluding yellow cabs, is owned by fleet companies

In yesterday’s newsletter, we gave some details on NYC TLC fleet economics. With the EV exemption on the FHV License Pause (aka TLC Plate Cap) removed and the current oversupply of for-hire cars, it will likely be sometime before new FHVs are allowed to be added to the NYC TLC fleet (outside of wheelchair accessible vehicles). In my opinion, until the yellow cab industry recovers there will continue to be strong pushback around adding additional for-hire vehicles (i.e., FHV License Determinations are made every 6 months). While the the “$1 million medallion” likely represented the top of a speculative bubble driven by leverage, the underlying fair value of a medallion was still in the hundreds of thousands of dollars. With yellow cab medallion values changing hands between $60,000 and $120,000 (see below), the NYC yellow taxi industry still has a long road ahead. In addition, a government-funded $64 million relief program also complicates any decision to add more for-hire cars in NYC. After all, a key historical driver of medallion values was scarcity and right now there are tens of thousands of excess for-hire vehicles not being used.

Source: NYC Taxi & Limousine Commission

Essentially until some sort of trip demand and vehicle supply equilibrium is established, the TLC is unlikely to let many more for-hire vehicles on the road. This then leads us to a new dynamic, which is the existence of large FHV fleets that control thousands of licenses. Yesterday we suggested lease caps, similar to ones that exist in yellow cab industry, to prevent future bad actors charging predatory lease rates. However, to further contextualize the market and discussion we estimate how many NYC TLC drivers rent their for-hire vehicle vs. own it. While the analysis is imperfect, we reached our estimate based on the following:

• We assumed all TLC-plated vehicles, excluding yellow cabs, that are owned in a corporate name are fleet vehicles (i.e., owned by an entity that includes INC, LLC, CORP, LTD). While some individuals may own their car in a corporate entity, we don’t think it’s common

*includes INCORPORATED, LIMITED, LTD

Based on our analysis, we estimate ~26%, or 24,700 FHVs are fleet-owned. Therefore, out of the current active NYC TLC fleet of 93,750, excluding yellow cabs, ~74% are operator-owned (i.e. TLC driver has their own FHV license).

Do these figures surprise you? If so, what is surprising?

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