NEW YORK—One New York City taxi medallion owner claims medallion prices in this city have dropped to as low as $250,000.
According to a report from Keith Leggett, the former senior vice president and senior economist at the ABA, a recent Chapter 11 bankruptcy filing of taxi medallion owner Evgeny Freidman placed values that low. Taxi medallion values in this city, and across the country, have dropped dramatically due to ridesharing services such as Uber and Lyft.
New York City taxi medallion prices are significantly below their 2014 values of $1 million. Plummeting medallion values have led to problems at some Big Apple CUs that make medallion loans.
As CUToday.info reported, in August, the $1.9-billion Melrose Credit Union was issued a consent order by the New York State Department of Financial Services following a joint safety and soundness exam conducted by the Department and NCUA. In July, CEO, Alan Kaufman, departed Melrose, leaving Steven Krauser as acting CEO. Montauk CU was conserved last September and was later merged into Bethpage FCU.
Freidman on Nov. 14 filed for bankruptcy protection regarding three New York City taxi medallions. According to the affidavit, the entry of Uber and Lyft into the New York market has caused taxi revenues to fall by 45%, Leggett reported.
As a result, "Medallion owners ... can no longer demand the $2,000 or $2,500 per month rent per Medallion lease." The going lease rate is now about $1,500 per month, stated Leggett, quoting from the affidavit.
“The current value of the Medallions is based on sales, and is difficult to determine, but without question it has fallen precipitously since the February 2014 TLC auction prices. Based on some recent auction results, the value is perhaps as low as $250,000 each, but certainly, in my opinion, no more than $500,000 each,” the affidavit stated.