Today’s announcement that Lyft will begin dispatching licensed taxis in Los Angeles through Curb points to an imminent New York City launch — a move AutoMarketplace predicted in April
Absolutely, this is why we’ve always argued that a TLC Plate Cap is a better way to balance utilization and driver pay than combining a poorly managed Plate Cap with UR requirements. There should still be a driver minimum pay rate, but UR isn’t needed when plate supply is properly managed. Many medallion owners will say, "what comes around, goes around."
It was always about basic supply and demand. Rental companies are now fully occupied, but it took them nearly two years to recover from Oct / Nov 2023 plate release. Ultimately, everything is downstream from driver earnings. If drivers aren't making money, it's bad for everyone. Simplest way to increase all driver earnings right now is to make sure there is no oversaturation.
Think the easiest metric to understand/track right now is basic utilization or how busy drivers are being kept across *all* FHV sectors. Not just HV (Uber, Lyft).
For example, if 3,000+ medallions are in storage there is clearly oversaturation, not rocket science for many to understand that. That's why releasing any TLC plates right now (or two years ago) seemed (was) insane, until all those yellow cabs can be sustainably active (on double shifts).
Once that is met (will likely take 3-4+ years), in the future a basic utilization metric across *all* FHV sectors is the metric that can be used. An FHV license supply cap is the easiest way to drive up driver earnings right now. Important to layer on minimum pay rate protections and lease caps too. Fundamentally, the more FHV supply is limited, the less power Uber and Lyft will have btw.
Also believe majority of FHV supply should be controlled by owner-operators vs. fleets (70 -30 ratio let's say). Industry will always need a rental industry though for multiple reasons (i.e., bad credit, inability to get or afford insurance or major one-off repair costs, accidents, etc.)
As you know firsthand Lenny, you used to pay a lot to rent a taxi, but it made sense if the money was there. This industry is all about driver *net earnings*, if costs are high but *net earnings* are higher, most people will be OK with that.
Utilization should be 60%+ btw. If a driver is available to work for 10 hours, they should be working (or kept busy with trips) for at least 6 of those 10 hours.
Mamdani’s been active on twitter, posting some taxi related content. Dapping up taxi drivers in one of them 😂. Another vid he’s doing an interview and says how Bloomberg “inflated the value of the medallion driving it from 200k to $1M”… not the thing you want to hear when you want to inflate it again… but hopefully Mamdani can recognize it as a indefinitely lived public infrastructure asset to control traffic / apply it to AVs. Also a bit of hopium .. since “this time is different” in that hopefully the sellers are individuals/ companies holding it, selling it to big tech… I’m hopeful a big medallion holder is speaking in his ear about this.
NYTWA leader Bhairavi Desai, who we've interviewed btw - https://automarketplace.substack.com/p/locked-out-conversation-with-nytwas, is going to be incredibly influential. She understands the industry very well and is actually much more balanced (pragmatic) than people think. As long as medallions ownership is skewed more towards owner-drivers (vs. large fleets) than the Mamdani administration will protect the industry. Remember, Marblegate is a lender to owner-operators.
Also, Uber and Lyft generally support unlimited supply markets (i.e., no medallions or supply caps) as that gives them more leverage over their workforce - our guess is the new administration will *not* promote unlimited supply. In other words, less FHV supply = better for medallions. AVs he's not going to let them easily displace 120,000 workforce, and perhaps will see logic of medallion / TLC plate being the licensing regime (also revenue source for city).
Mamdani agenda also calls for $30 per hour min wage by 2030, and the most realistic way to achieve higher driver earnings at this point is through supply limits (i.e., less cars, more trips, higher earnings).
Finally, higher medallion price revalues city asset, which in turn can help fund things (3-5+ yr time horizon). Let's see what happens, but just some quick thoughts!
I’ll go back and watch that interview. Curious to see what she thinks. Another piece that I hadn’t thought completely through is that how medallion leasing to AVs could also push up the price/ squeeze some of the leasing drivers out… which might be a tough sell. I also think Mamdani could get the ball rolling on this pretty quickly by requiring the testing companies to either buy or rent a medallion… then that could establish a precedent for when laws are written to allow for autonomous… but the mayor requiring it simply for AV testing.. gets the whole process started fast with 0 leg work
This would more so be the case way later down the road… in a world when there are 2k+ NYC AVs.. but if a Marblegate or another fleet leases the medallions to AVs, that’ll likely push up the $1k/wk cost.. I mean eventually we’ll get the point where autonomous is everywhere.. but I suspect the weekly rates will kick up if the medallions owner charges more/ prefers to lease to AVs… that’s probably a couple steps ahead
Many drivers are not gonna be happy. Uber drivers are already feeling the effects of their rides going to Yellow cabs.
Absolutely, this is why we’ve always argued that a TLC Plate Cap is a better way to balance utilization and driver pay than combining a poorly managed Plate Cap with UR requirements. There should still be a driver minimum pay rate, but UR isn’t needed when plate supply is properly managed. Many medallion owners will say, "what comes around, goes around."
Hopefully new administration will make some changes
I completely agree. Rental companies are dried up with no rentals and many drivers complaining about it being extremely slow
It was always about basic supply and demand. Rental companies are now fully occupied, but it took them nearly two years to recover from Oct / Nov 2023 plate release. Ultimately, everything is downstream from driver earnings. If drivers aren't making money, it's bad for everyone. Simplest way to increase all driver earnings right now is to make sure there is no oversaturation.
Now the question is how many cars is considered over saturation in this industry?
Think the easiest metric to understand/track right now is basic utilization or how busy drivers are being kept across *all* FHV sectors. Not just HV (Uber, Lyft).
For example, if 3,000+ medallions are in storage there is clearly oversaturation, not rocket science for many to understand that. That's why releasing any TLC plates right now (or two years ago) seemed (was) insane, until all those yellow cabs can be sustainably active (on double shifts).
Once that is met (will likely take 3-4+ years), in the future a basic utilization metric across *all* FHV sectors is the metric that can be used. An FHV license supply cap is the easiest way to drive up driver earnings right now. Important to layer on minimum pay rate protections and lease caps too. Fundamentally, the more FHV supply is limited, the less power Uber and Lyft will have btw.
Also believe majority of FHV supply should be controlled by owner-operators vs. fleets (70 -30 ratio let's say). Industry will always need a rental industry though for multiple reasons (i.e., bad credit, inability to get or afford insurance or major one-off repair costs, accidents, etc.)
As you know firsthand Lenny, you used to pay a lot to rent a taxi, but it made sense if the money was there. This industry is all about driver *net earnings*, if costs are high but *net earnings* are higher, most people will be OK with that.
Utilization should be 60%+ btw. If a driver is available to work for 10 hours, they should be working (or kept busy with trips) for at least 6 of those 10 hours.
Daewood, you always hit the nail on the head with ur takes.
Mamdani’s been active on twitter, posting some taxi related content. Dapping up taxi drivers in one of them 😂. Another vid he’s doing an interview and says how Bloomberg “inflated the value of the medallion driving it from 200k to $1M”… not the thing you want to hear when you want to inflate it again… but hopefully Mamdani can recognize it as a indefinitely lived public infrastructure asset to control traffic / apply it to AVs. Also a bit of hopium .. since “this time is different” in that hopefully the sellers are individuals/ companies holding it, selling it to big tech… I’m hopeful a big medallion holder is speaking in his ear about this.
Here's some thoughts.
NYTWA leader Bhairavi Desai, who we've interviewed btw - https://automarketplace.substack.com/p/locked-out-conversation-with-nytwas, is going to be incredibly influential. She understands the industry very well and is actually much more balanced (pragmatic) than people think. As long as medallions ownership is skewed more towards owner-drivers (vs. large fleets) than the Mamdani administration will protect the industry. Remember, Marblegate is a lender to owner-operators.
Also, Uber and Lyft generally support unlimited supply markets (i.e., no medallions or supply caps) as that gives them more leverage over their workforce - our guess is the new administration will *not* promote unlimited supply. In other words, less FHV supply = better for medallions. AVs he's not going to let them easily displace 120,000 workforce, and perhaps will see logic of medallion / TLC plate being the licensing regime (also revenue source for city).
Mamdani agenda also calls for $30 per hour min wage by 2030, and the most realistic way to achieve higher driver earnings at this point is through supply limits (i.e., less cars, more trips, higher earnings).
Finally, higher medallion price revalues city asset, which in turn can help fund things (3-5+ yr time horizon). Let's see what happens, but just some quick thoughts!
I’ll go back and watch that interview. Curious to see what she thinks. Another piece that I hadn’t thought completely through is that how medallion leasing to AVs could also push up the price/ squeeze some of the leasing drivers out… which might be a tough sell. I also think Mamdani could get the ball rolling on this pretty quickly by requiring the testing companies to either buy or rent a medallion… then that could establish a precedent for when laws are written to allow for autonomous… but the mayor requiring it simply for AV testing.. gets the whole process started fast with 0 leg work
Could you explain this a little bit more: "medallion leasing to AVs could also push up the price/ squeeze some of the leasing drivers out"?
This would more so be the case way later down the road… in a world when there are 2k+ NYC AVs.. but if a Marblegate or another fleet leases the medallions to AVs, that’ll likely push up the $1k/wk cost.. I mean eventually we’ll get the point where autonomous is everywhere.. but I suspect the weekly rates will kick up if the medallions owner charges more/ prefers to lease to AVs… that’s probably a couple steps ahead
For what it's worth, there are actually already medallion lease caps in place
💪🚕 😤