Medallion Values Still Depressed with Average Transaction Price of $107,378 in June 2021

Crain's NY recent article highlights medallion owner struggles as more competition arrives from the likes of all-EV service Revel. However, we think a bottom might be in.

“If you had the money, you could pick one up for $50,000 to $100,000. I haven’t seen them appreciate at all…And with all this bad news coming out with more competition—this is dead.” - Sergio Cabrera, a medallion owner-driver who owes $267,000 on his loan.

Crain’s NY recently published piece, Taxi medallion values plummet as new competition hits the street, highlights the continued plight of the once $1 million NYC yellow cab medallion. The article is behind a paywall so I can’t legally copy and paste it below, but in summary it makes the point that NYC taxi medallion values still remain depressed with drivers struggling to pay deeply underwater loans backed by collateral that has dropped more than 85% in value! In addition, Crain’s mention the launch of Revel’s all-EV rideshare service as putting more pressure on an already weakened medallion market. A simple reading of the article may lead one to think the NYC TLC has lost the plot again, but I think Crain’s overstates Revel’s potential impact. In fact, the NYC Taxi & Limousine Commission (TLC) removed the EV exemption to the FHV License Pause (aka ‘TLC Plate Cap’) in June, exactly out of fear that new companies might flood an already saturated market with additional for-hire vehicles. Revel was only granted FHV licenses they applied for before the exemption was removed.

My personal opinion is NYC yellow cab medallion values had bottomed before the pandemic (original FHV License Pause was in August 2018), but the pandemic caused another one-off shock. In other words, I believe a bottom is in and the medallion’s value will now begin to recover, as long as the NYC TLC doesn’t take additional actions (we highlighted one) that could cause further negative pressure on values. You also have to remember having firm control of the medallion market was a historical way the City raised hundreds of millions of dollars, power, one would think, the City would not concede and that could help bridge budget deficits. In fact, in a March NYC Council Transportation Committee hearing, Dean Barr, a data analyst at Eagle Alpha, was quoted as saying.

“In my opinion, the taxi medallion market is extremely undervalued…Medallions are worth more than some might expect.” - Dean Barr, a data analyst at Eagle Alpha

Furthermore, hedge fund Marblegate has put a huge bet on a medallion recovery before the pandemic and seem to be sticking with it. By my estimates the firm has invested well over $200 million in the industry (the entire medallion market is worth about ~$1.5 billion right now!).

The lowest single medallion sale this year was done at $45,000 in March. I think when history looks back that will be viewed as a bargain basement price.

What do you think? Will the NYC Yellow Cab Medallion recover or is it doomed?

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