At long last, New York’s taxi industry may be about to find out how much a taxi medallion is worth in the Uber age, reports Crain’s. Aspire Federal Credit Union will auction off 14 medallions from its loan portfolio on January 16. One or more of the assets will have an opening price of $150,000, according to Aspire President Thomas O’Shea, who is hoping the low price will draw the attention of bidders and drum up interest in the sale.
It has been difficult to determine the market price for medallions because there have been few outright sales. The last auction that had competitive bidding was for a package of 46 bought by a hedge fund as part of a bankruptcy settlement; they went for $186,000 apiece, but individual sales might have pushed the price higher. Medallions have also recently changed hands in what are believed to be cash transactions for as little as $150,000 and as much as $400,000, according to the Taxi and Limousine Commission.
O’Shea says Aspire is looking to find the right price for the asset in hopes of bringing owner-operators back into the market, which has been undermined by Uber, Lyft, Via and Juno—e-hail companies funded by venture capital that offer riders low prices even if it results in operating losses. “If we come in at $150,000, and these get to $200,000, or $250,000, or wherever they wind up, we can get the interest of individuals who want to own and operate a medallion, as well as the institutional investor,” he said. “It’s a step to restart the industry.”
The auction comes at a volatile time for the taxi industry and the lenders who finance medallion purchases. A piece of tin fixed to the hood of a yellow cab, the medallion bestows the exclusive right to pick up fares on the street. Its price, which topped $1 million in 2013, has been on a long and accelerating decline as riders and drivers migrated to Uber, Lyft and others using app-based alternatives to old-style street hails.
Aspire has avoided the fate of larger credit unions that made far more medallion loans, such as Melrose, which was placed in receivership earlier this year after too many of those loans became delinquent. Aside from the 14 to be sold next month, O’Shea says Aspire has foreclosed on another 29 medallions and is looking at options besides selling them, such as leasing to fleet managers.
He added that not all of the medallions up for auction will be priced at $150,000. Aspire works with other lenders, and some of the participants who had a stake in the original medallion loans want to start the bidding higher.
- More New York City taxi medallions going on the block – starting at $ 150.000