Rise, Fall, and Implications of the New York City Medallion Market

Capping the number of licenses and granting exclusive right to street hailing passengers, the New York City (NYC) medallion system manipulated the demand and supply of taxicab services and created a medallion market. The lasting system turned the right to operate taxis in NYC into a private property of scarcity and an investment vehicle with disguised risks. Integrating data published by the NYC Taxi and Limousine Commission (TLC), this research identified four phases of the medallion market and argued that (1) the market collapsed because technology and ride-sharing economy have materially weakened the assumptions underlying the market; (2) Yellow Cab is fighting a lost battle against players of ride-sharing economy; and (3) the deregulation of the NYC taxicab industry will adapt and continue despite its adverse impact on the medallion interest groups.