Investment Firm Marblegate is Biggest Player in Taxi Medallion Industry & Betting on Recovery

Turnaround firm Marblegate is betting big on the NYC yellow cab industry. Industry experts say Marblegate controls, directly and indirectly via loans, nearly 1/3 of the city's ~13,500 medallions

“The idea is they buy an asset at a low value and they increase the value of the asset" - Christopher Lynn, Former NYC Taxi & Limousine Commission (TLC) Chairman

Spectrum NY 1 published a report highlighting Greenwich, CT-investment firm Marblegate’s big bet on the NYC yellow taxi. The “distressed investment” firm has now become the biggest player in the NYC yellow cab industry. While Marblegate’s bet was made pre-pandemic it has stuck to it, suspended loan payments and forgave debts tied to medallions it controlled. According to Spectrum’s report, some experts believe that by investing in newer cars and technology, Marblegate could improve yellow cab service and the value of medallions, especially with new city regulations undercutting some of the advantages Uber and Lyft enjoyed.

"Our approach is built on the idea that the driver should be the customer – a radical departure from the status quo. We believe this fresh perspective will boost drivers’ economic futures and help ensure that the taxi industry remains central in the lives of New Yorkers for many years to come.” - Marblegate statement

"The concern is that they’re going to look to artificially kick up the value of these loans and medallions, do it on the backs of the drivers who can no longer afford them, and then as a hedge fund, they’re gonna cash in and exit the industry" - Bhairavi Desai, president of the New York Taxi Workers Alliance.

Based on Wall Street Journal (WSJ) reporting, Marblegate began buying up medallions in 2017 at prices between $175,000 to $200,000 (it should also be noted Marblegate bought medallion loans where they don’t own the medallion, but the loan attached to it). I have personally heard rumors of certain medallion transactions occurring between $75,000 to $100,000 during the pandemic (not confirmed though), but Marblegate still bought at a significant discount to medallion highs of ~$1 million.

Do you think investing in a NYC medallion today is a good investment (i.e. medallion values have bottomed out) or would you still stay away?

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