The rise of Uber is destroying the traditional taxi business, according to this compelling chart from data compiled by the New York City Taxi and Limousine Commission. It tracks sale prices of taxi “medallions,” the pricey licenses that give companies the right to operate a yellow cab:
The scariest part — for taxi companies — is the bottom part of the chart where the blue bars indicate sales coming from foreclosures.
Medallions used to confer on companies a type of monopoly or cartel — you could not operate a taxi in New York without one. Now, however, Uber lets anyone drive a taxi for the entry-level price of merely owning your own car. For many drivers there is simply no point in owning a medallion or working for a medallion company. And so the transaction value of those medallions has dropped off a cliff, even though the economy in New York has gone through the roof.
We haven’t seen anything like this in the UK yet but there are early worrying signs for traditional cab fleets.
Addison Lee, which has a massive fleet of private hire drivers in London, recently cancelled its planned private equity sale. And then it announced there would be 90 job losses at the company.
Uber’s arrival in London already caused protests from Hackney Cab drivers. When Uber launched in Birmingham, drivers there said they didn’t care. “We are not particularly bothered about Uber coming to Birmingham,” Mohammed Taj, a member of Birmingham’s Black Cab Drivers’ Association (BBCD), told the Mail.
The stats from New York suggest cab companies ought to start being bothered a bit more.