Uber seems to destroy the business of traditional taxis

When a Uber startup appeared, few of the owners of taxi companies were worried about this. Now it seems that such companies have a reason to worry. Moreover, there is an opinion that Uber simply destroys the traditional “cart” scheme used by taxi companies.

In the continuation - graphs and charts, constructed according to data obtained from the New York City Taxi and Limousine Commission . The graphs show the number and volume of sales of “medallions” - expensive licenses, which entitle companies to launch yellow cars on the route.

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Medallions, as licensed, were first introduced in New York in 1937. These medallions were initially worth a few dollars, they were bought by companies and individuals who intended to engage in private carrying. Over time, medallions became more expensive, and in the 2000s the price of the medallion rose to a million US dollars. Thanks to this, many people and companies suddenly became millionaires. It is clear that not every company could already buy such a license, not to mention private individuals. At the same time, only the owners of medallions have the right to engage in private carrying in New York.

Data on the number of medallion sales and their price were compiled by Donut Shorts, a Twitter account for investors .

On the chart you can see that the taxi business is nowhere near as profitable as before. The most frightening part for owners of such a business is the lower right corner of the diagram with columns of blue. These are sales of medallions owned by companies that could not pay their debts.

As for the medallions - previously it was a very profitable investment. According to Newruwave “medallions are issued by the city authorities in a certain amount and are sold to those who want to engage in this business. Only the owner of the medallion has the right to engage in a carting for money. Initially, they produced 16,900 pieces, and in 2014 in New York there were 13,437 taxi medallions. According to the rules of the city, yellow taxis can move anywhere, but they can land voting passengers only in Manhattan up to 110th street in the west and up to 96th in the east of the island. Initially, the medallions were sold at a price of $ 10 to private cab drivers and companies. After the Second World War, the price of them began to grow, but after the 70s, it began to grow almost exponentially and eventually soared by almost 7,000%. ”

However, the price of the medallion is far from a million dollars, and now the price of the license continues to fall.

In the US, New York, the picture is quite depressing. As for the UK, the situation here is better. However, Addison Lee, previously at its peak, has now cut more than 90 jobs, which may indicate a gradual increase in the conditions for running a traditional private trucking business in the UK.

The recent strike of Hackney Cab taxi drivers, who protested against the work of Uber in London, can also serve as confirmation. But the drivers from Birmingham did not worry about this at all when Uber entered their city .

Perhaps now the situation is becoming more alarming, and drivers have something to worry about. As an example, you can bring all the same statistics on medallions from New York:



Some experts, for example, Larry Meyers from PDL Capital, believe that the situation is not as bad as it may seem. The number of medallions sold is minimal, and the number of such licenses has increased in New York. Therefore, evidence of the link between the work of Uber and the state of the business of traditional taxi companies yet. But this is the opinion of one of the specialists, many owners of taxi companies think otherwise.