New York City Taxi Medallions Sell For A Million Dollars
One marker of an industry's seriousness is whether it requires its new practitioners receive formal training or licensing. But a price tag of $1 million for the right to enter a field might be the pursuit of a profession not worth the expense.
Of course, when the system of requiring drivers of New York City taxis possess medallions was invented, no one ever imagined the barrier to sit at the wheel of the yellow automobile would grow so costly. But so it has, as word came out this past week that two New York City taxi medallions were sold for a dollar amount in the seven digits, according to a report by The New York Times.
The medallions, which are made from aluminum and are the only means for operating a legal New York City taxi, were introduced in 1937 during the mayoral administration of Fiorello LaGuardia, according to PBS. They were created as a way of regulating an industry then being ravaged by price gouging. And according to the city of New York, there are some 13,000 officially licensed taxi medallions.
"It is an investment that someone would not make without being confident in the industry and the future of the city," David S. Yassky, chairman of the city's Taxi and Limousine Commission, told the Times. "It's a lot of money."
The limit on medallions and the passing of time has made them into a commodity. Only once, in 1996, did the city issue new medallions, and then it was just a new batch of several hundred. (They are often bought by firms dedicated to the financing of the medallions, and not by individual drivers themselves.)
At the time of their inception, the medallions were sold for roughly $10, or $157.50 in today's dollars. But in the intervening years, the price of the medallions has risen over 1,000 percent, at a larger clip than that of gold over the same time.
"It will always make good money and pay for itself," Graham Hodges, a professor at Colgate University and an expert on New York City taxes told the Times. Hodges went on to compare the medallions market to that of city apartments.
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