How much worse can things get for the city’s taxi drivers? It appears that their business, in free fall since the rise of Uber and other ride-hailing apps, hasn’t bottomed out yet. Daily fare-box revenues for the city’s 13,587 yellow cabs were 10% lower in December than in the prior year and 25% lower than in December 2012, according to the Taxi & Limousine Commission. Those numbers help explain why the value of a medallion has plunged from $1.1 million in 2013 to about $600,000.
Yet the number of cabbies on the road has fallen by only 10% during the past five years, and only 1% of medallions have been taken out of circulation—meaning drivers are fighting over a steadily shrinking pie.
The taxi industry’s sinking fortunes are dragging down its lenders. State regulators this month seized Melrose Credit Union of Queens, one of the area’s largest medallion lenders, after delinquencies soared nearly tenfold in 18 months. Last month ConnectOne Bancorp of Englewood Cliffs, N.J., deemed about one-third of its taxi loans a total loss and said it’s trying to sell the remaining $66 million of its portfolio, most of which it designated “nonaccrual”—often a euphemism for “bust.”
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This week the city’s pre-eminent taxi lender, Medallion Financial, is expected to report grim fourth-quarter and full-year results. Its stock has fallen by about 75% in the past year, to $2.35 per share, as President Andrew Murstein tries to wean his company off taxi loans, which comprise 49% of the firm’s loan portfolio. Murstein, who declined to comment, sought to reassure investors during a November conference call. “The company is doing extremely well, except for the stock price,” he said.
The good news for New Yorkers is that the rise of Lyft, Uber and similar services has increased by 40,000 the number of drivers licensed by the city to take them around town—to 150,000 licensees—underscoring how quickly the industry has changed.
How much worse can things get for the city’s taxi drivers? It appears that their business, in free fall since the rise of Uber and other ride-hailing apps, hasn’t bottomed out yet. Daily fare-box revenues for the city’s 13,587 yellow cabs were 10% lower in December than in the prior year and 25% lower than in December 2012, according to the Taxi & Limousine Commission. Those numbers help explain why the value of a medallion has plunged from $1.1 million in 2013 to about $600,000.
Yet the number of cabbies on the road has fallen by only 10% during the past five years, and only 1% of medallions have been taken out of circulation—meaning drivers are fighting over a steadily shrinking pie.
The taxi industry’s sinking fortunes are dragging down its lenders. State regulators this month seized Melrose Credit Union of Queens, one of the area’s largest medallion lenders, after delinquencies soared nearly tenfold in 18 months. Last month ConnectOne Bancorp of Englewood Cliffs, N.J., deemed about one-third of its taxi loans a total loss and said it’s trying to sell the remaining $66 million of its portfolio, most of which it designated “nonaccrual”—often a euphemism for “bust.”
This week the city’s pre-eminent taxi lender, Medallion Financial, is expected to report grim fourth-quarter and full-year results. Its stock has fallen by about 75% in the past year, to $2.35 per share, as President Andrew Murstein tries to wean his company off taxi loans, which comprise 49% of the firm’s loan portfolio. Murstein, who declined to comment, sought to reassure investors during a November conference call. “The company is doing extremely well, except for the stock price,” he said.
The good news for New Yorkers is that the rise of Lyft, Uber and similar services has increased by 40,000 the number of drivers licensed by the city to take them around town—to 150,000 licensees—underscoring how quickly the industry has changed.
A version of this article appears in the February 20, 2017, print issue of Crain’s New York Business.
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