https://a.msn.com/r/2/BBEquDV?m=en-us

Interesting article on the NYC taxi scene and how it is cratering because of ride sharing apps. I was not completely aware that medallions were leveraged as equity like this. Two things:

1. Really like Danny Devito coming back to his acting roots with this portrayal of a taxi cab driver.

2. This quote from the article tells me Ydanis is a dumbass and I'm embarrassed for her:

Quote:

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City Council member Ydanis Rodriguez, who chairs the council's transportation committee, called this week for a panel to investigate the fall in medallion values.

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The fall in medallion values is due simply to technology disruption. And being on the Transportation Committee how has she never heard of the buggy whip analogy?

I am surprised you didn't know about the medallion market. It is the go to example for demonstrating the negative effects of artificially limiting supply in every ecnomics class I have had from high school to grad school. (With NYC rent controlled apartments being the go to example of negative effects from limiting prices)

Finance classes at aTm and tu both used it as an example of using future cash flows to determine at NPV of an asset.

It was even a big part of HBO's the night of.

Yes, I'm surprised as well. I do not recall this in my one Economics class at A&M but I was also in the "light" Econ class. At least back then there were two different classes.

Really surprised I did not run across this while getting my MBA though. Obviously aware of the medallion system. I just wasn't aware they were leveraged for equity.

And the financial institutions have(or had) a vested interest in limiting the supply. Public extortion paid for by Big Taxi/Finance via lobbying dollars, campaign contributions, and perks.

I learned of this from a Bloomberg article a couple of years ago. Part of the escalation in medallion value was one guy bidding them up to increase the collateral value of his other medallions:

https://www.bloomberg.com/features/2015-taxi-medallion-king/

Love how the article doesn't explain that these "middle class" medallion owners were levering these medallions. No one forced them to borrow half a million dollars. Both of the examples bought their medallions for $120k or less.