A taxi medallion, also known as a CPNC (Certificate of Public Necessity and Convenience), is a transferable permit in the United States allowing a taxicab to operate. Several major cities in the US use these in their taxi licensing systems, including New York City, Boston, Chicago, Philadelphia, and San Francisco.
The medallion system is a government-created intentional constraint on the supply of taxicabs, and because cities have historically increased the number of medallions at a slower rate than the growth in demand for taxis, medallions have generally been considered a valuable investment,[1][2] though recently the increased supply of cars for hire created by ridesharing companies has been eroding the value of medallions.[3][4][5]
Historical prices
Boston
In 2013, the price of a medallion was $625,000.[6] In 2014, that price had risen to around $700,000.[7] Shortly thereafter, however, medallion prices began to sharply decline. According to the Boston Herald, by the end of 2018, the value of a Boston Taxi Medallion had collapsed; after reaching an all-time high in 2014, prices had fallen to around $40,000, representing a 95% loss.[8]
Cambridge
In 2014, a medallion was worth nearly $700,000.[7]
Chicago
The total value of all medallions and assets related to them had a value of $2.5 billion in Chicago in 2013.[9]
In 2012, medallion prices ranged from $87,000 to $385,000.[10] In 2015, Chicago's average medallion price was under $230,000, down 30% from 2014.[9] In 2018, they had dropped to a range of $30,000 to $100,000.[11]
The total value of all medallions and assets related to them had a value of $16.6 billion in New York City in 2013.[9]
In 1962, the market value of a medallion was around $25,000. The price rose steadily. In 2005, an individual medallion was around $325,000 while a corporate medallion was approximately $375,000.[12] Around 2010, the market value of a medallion was around $600,000. It peaked around 2013 at over $1,000,000. Between 2014 and 2015, New York City's non-corporate medallion price dropped 45%.[9] In 2015, the price had fallen to approximately $650,000.[13] As of 2018, one could purchase a medallion for less than $200,000. On July 11, 2019, 16 medallions were offered at auction, 3 sold for $137,000, $136,000 and $138,000; the remaining 13 failed to attract any bidders.[14] Since many cab drivers took out loans in order to afford medallions when values were high, many have subsequently been forced to declare bankruptcy. In September 2020, Marblegate Management LLC, the largest holder of NYC medallion loans, decided to write off $70 million in debt that indigent cab drivers still owed.[15]
Philadelphia
In 2005, the value of a medallion was roughly $65,000 to $80,000. As of 2018, the value was around $50,000.[16][17]
^Horwitz, Jeff; Cumming, Chris (2012-06-06). "Taken for a Ride". Slate. Archived from the original on 2012-07-30. Retrieved 2018-01-15. ...the taxi medallion system, a regulatory scheme in which the right to operate a taxi is thoroughly divorced from the actual work of driving one... When New York City first issued taxi medallions in 1937, they were just licenses, worth $150 in today's terms. ... In New York, Chicago, and Boston, the number of medallions has barely budged since they were issued in the 1930s. New York went 60 years without issuing new medallions, and it's only been a trickle since. ... New York's tight limits on the number of medallions in circulation has suppressed the supply of cabs. There are 13,237 medallions now outstanding, a few hundred fewer than in 1937, but a huge supply of drivers competing to lease them.
^Van Gelder, Lawrence (May 11, 1996). "Medallion Limits Stem From the 30s". The New York Times. Archived from the original on 2017-03-25. ...after the stock market crash in 1929, job seekers swelled the ranks of New York City cabdrivers to 30,000 in 1930. ...too many cabs were chasing too few passengers in the Depression years. "The Haas Act tried to remedy that problem by stopping the issuance of any new vehicle licenses."
