New York Taxi Industry Dying

  • I’ve been away…another bad Uber story…http://nypost.com/2016/10/06/uber-blocked-nypd-probe-after-irate-driver-attacked-woman-suit
    The high percentage of rideshare rides increases will begin to dwindle. There is a place for both, but still need to be on equal playing fields. Medallion Financial still holds the majority of loans in NYC where the taxi industry is doing well.

    Uber blocked NYPD probe after irate driver attacked woman: suit
    An irate Uber driver dragged a woman down the block with her body half out of his car — and the company then blocked an NYPD investigation into him, a new lawsuit says.

    Jay

    So, your hypothesis is that Uber will blow up, along with the other ride-share companies that customers and drivers have overwhelmingly demonstrated have a big place in the market – unprecedented speed of market penetration for a new entrant into any industry, and the share gains are ongoing http://www.businessinsider.com/nyc-yellow-cab-medallion-prices-falling-further-2016-10 – and all will go back to the way it was for taxi medallions before new options were allowed in markets? Because short of that, the legacy economics of $1 mm taxi medallions purchased and financed cannot be supported, forcing massive fallout for existing owners, and their lenders, followed by an equilibrium state in which yellows continue to play their role in the street hail arena, especially in NYC. Good luck with the “Uber and all other competitors blow up to save Big Taxi as we’ve always known it” theory!

    NYC medallion prices have tumbled amid the rise of Uber and Lyft.
    Uber and Lyft are demolishing New York City taxi drivers
  • No, that the rapid rate of increasing ride usage will diminish and there will be an equilibrium. Then as the rideshare companies get more regulated, it will really slow, and then equilibrium. They and taxis will be around..specifically in NYC, I saw the listing before the article. Would be interesting to know why it is that price..specifically, did the person by it from the last auction at say 200k, and flipping it for a quick 50k? Would be a nice ROI. Hard to say why the price when others are still around twice the listing price.
  • Almost every NC transfer in last year was NOT arm’s length. Foreclosed medallions transferred to “buyers” who assume the mortgage, putting down no cash, and sometimes receiving 105% financing, so they don’t even have to pay transfer fee out of pocket. The 2X prices you reference have no relationship to fair value. Lenders protecting their books, finding buyers to start servicing non-performing loans. That makes sense. What doesn’t make sense is valuing the collateral for LTV reporting purposes or mark to market purposes of both loans and owned medallions, at these inflated, cashless transaction values. If medallion had transferred at auction at $200K – your “flip” question – it would have showed up in the TLC transfer data, though possible, U suppose, it could have been purchased in early October and put on market since. But that’s also unlikely, as auctions involve lenders as sellers, in process of foreclosure, and they invariably put in minimum bids at their mortgage value. They can always take the loss later by finding a cashless buyer at less than the mortgage value. But if sell for cash now at e.g., $250K, would have to book the loss now. These lenders have been engaged in this kick the can down the road tactic for over a year now – delaying legitimate price discovery. GL
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