August 6, 2009

Better than gold: A cab medallion

The value of a taxi medallion in New York City has risen more than stocks and even gold, the president of Medallion Financial said recently.

It has out performed every index you can think of, company President Andrew Murstein said.

The average prices for one of 13,257 taxi licenses issued by the city depend on the type. The value of an individual license climbed 33 percent since January 2008 to $572,000. For corporate licenses, which allow owners to hire agents to lease out the business, the price has jumped 28 percent to $766,000. USA Today reported Thursday.

Mathew Daus, chairman of the New York Taxi & Limousine Commission, said the price is driven by supply and demand. New York has more than 46,000 cab drivers competing for a strictly controlled number of taxi medallions, Daus said.

The commission caps the weekly leasing fee for a shift in a cab at $800 a week, but driver Zafar Raja said brokers are doing whatever they want and you can't argue, because there is no job security.

I know someone who is paying $900 for a single-driver weekly night shift, he said.