NYC Taxi Bust Over? Drivers Get First Price Hike Since 2012, Medallion Values Bottom
We have been following how ridesharing companies have decimated the taxi industry for years now, rendering New York City taxi medallions near-worthless. Then the virus pandemic collapsed demand as work-at-home flourished, followed by soaring inflation that made operating a yellow cab in the metro area super expensive. Meanwhile, drivers were forced to keep metered fares at decade-low levels throughout all of this, making it impossible to earn a living wage.
Thousands of yellow cab drivers were trapped in the taxi medallion boom that saw licenses to operate a taxi in the city skyrocket to a $1.32 million peak in 2014, then crash down to $79,106 in May 2021 and has since moved higher to about $140,000 late in 2022.
Numerous factors contributed to the bust. One of the biggest was ridesharing companies that decimated the taxi industry — this began in 2014.
While medallion prices slid for half a decade, many drivers who bought the license to operate a taxi on debt were underwater. They were unable to afford debt-servicing payments or putting food on the table. Some drivers committed suicide while others endlessly protested for government relief as the industry was in freefall.
Then came the pandemic, where demand froze. Even more drivers could not service their medallion loans because NYC’s progressive government forced a mandatory lockdown that halted the economy. Prices of the medallions cratered some more, losing a whopping 94% since the peak, but have since turned up some. Then inflation struck taxi drivers, as many found it nearly impossible to make a living wage.
And finally, after all the suffering, taxi drivers saw some much-needed relief this week when NYC’s Taxi and Limousine Commission voted to increase metered fares by 23%, the first price increase since 2012, Bloomberg reported.
The increase is obviously great for taxi drivers but will make rides around NYC more expensive.
“Raising taxi fare rates and minimum pay for high-volume drivers is the right thing to do for our city.
“We are confident that today’s unanimous Commission vote will keep our taxi and FHV fleets sustainable and ready to serve New Yorkers,” TLC Commissioner David Do said in a statement.
TLC boosted taxi metered rates from $2.50 to $3, with surcharges rising from $1 to $2.50 during rush hour. The overnight fee was raised from 50 cents to $1. The flat rate of about $52 to John F. Kennedy International Airport will jump to $70.
The average taxi ride in the city will now cost $19.62 compared to $15.97.
A similar price hike will be seen for Uber and Lyft drivers. They will receive a 7% per minute price hike and 24% per mile. The average 7.5 miles trip, about 30 minutes of travel time, will now require a minimum charge of $27.15.
“After a year of all drivers having to choose between food and fuel, and a decade of not just stagnation but loss for yellow cab drivers in particular, we’re relieved to see the raise be voted on,” said Bhairavi Desai, executive director of the New York Taxi Workers Alliance, a 25,000-member union of yellow cab and Uber and Lyft drivers.
The long overdue price hike is excellent for drivers but will add to the structural inflation of everything getting more expensive and ultimately hurt consumers’ discretionary spending.
Thu, 11/17/2022 – 19:20