Ron Sherman and his pals control 40% of NY's taxis. And he's driving the mayor up the wall.
You don’t know Ron Sherman, but you’ve probably ridden in one of his yellow cabs. Chances are you’ve used his credit-card machines to pay for rides, too.
The 52-year-old owns nearly 200 taxi medallions—the piece of aluminum attached to a cab that gives its owner the exclusive right to pick up street hails. Valued at more than $1 million each, the medallions are just a portion of Mr. Sherman’s business empire and only hint at his outsize influence in the highly insular and powerful taxi industry.
As president of the Metropolitan Taxicab Board of Trade, an industry group whose 35 member companies operate about 40% of city cabs, Mr. Sherman works to keep power concentrated among a collection of corporate medallion owners that industry players routinely refer to as the “cabbie cartel.”
Mr. Sherman has fought off threats to their clout for years, but he’s in the midst of perhaps his greatest challenge. Mayor Michael Bloomberg, a free-market billionaire who has clashed with the city’s tightly regulated taxi industry, persuaded the state Legislature to pass a bill allowing livery cars in northern Manhattan and the outer boroughs to pick up street hails. An industry veteran believes the mayor’s goal in part was to break the medallion owners’ grip. “The mayor has never believed in the medallion system,” the insider said, citing past comments by the mayor.
That has put Mr. Bloomberg in frequent conflict with the city’s cab king. “Ron Sherman’s like a gnat gnawing at the mayor,” said one taxi industry source.
Bit by bit, Mr. Sherman draws blood. Last year, his lawsuit prevented the city from requiring all cabs to be hybrids. Earlier this month, a state Supreme Court judge—a former cabbie—sided with Mr. Sherman’s group, whose high-priced lawyers outclassed the city’s attorneys, and issued a temporary restraining order stopping the launch of outer-borough livery cabs. It was the latest in a string of legal victories for the industry over the city.
Now Mr. Sherman wants the Taxi and Limousine Commission to increase fares—but only if fleet operators like him can get a piece of the extra revenue by charging more for cabbies to lease their cars. The Bloomberg administration supports a 17% fare increase but only a $9 raise on leases. (A standard lease for a cabbie is capped at $129 for a weekend night shift.)
The small lease increase does not sit well with fleet owners. Sources said Mr. Sherman and his lobbyists at Connelly McLaughlin & Woloz are hoping to persuade a majority of the nine taxi commissioners to oppose any fare increase. (Mr. Sherman’s Metropolitan Taxicab Board of Trade and his company pay the lobbying firm a combined $12,000 a month.)
Even when Mr. Sherman and the mayor have stood side by side, the good will has been hard-bargained. The two were together at last year’s announcement that Nissan would produce the Taxi of Tomorrow. Not a fan of Nissan, Mr. Sherman lifted his threat to sue only when the mayor agreed to approve the Ford Transit Connect as a city taxi. He has been a bulk buyer of Ford cabs for decades.
Medallion millionaires
“Ron Sherman feels he—not the regulator—should be in the driver’s seat when it comes to making certain policy decisions,” said former TLC Commissioner Matthew Daus, now a partner at law firm Windels Marx. “He’s been a persistent, respected adversary who can be very calculating. He’s at the forefront of every major issue in the taxi industry and is a very successful businessman.”
Like so many medallion millionaires, Ronald Mark Sherman got started with the help of previous generations. His grandfather, with some high-school friends, bought six medallions in the 1940s, shortly after the medallion system was put in place to tame streets teeming with New Yorkers hoping to make a buck off a fare. They cost not much more than $10 apiece.
Since then, the number of medallions has barely budged—and neither have the clans that first got them. Today, five families have an ownership interest in 17.4% of the medallions owned by corporations, according to city records reviewed by Crain’s. And 22 individuals own a third of all corporate medallions.
The records show that the Weingarten family has the most. Fred and Victor Weingarten and their cousin Jacob Popovic began as hacks before buying loads of medallions in the 1970s. They accumulated so many that they became known as the “Three Wise Men.” Around that time, Mr. Sherman joined his father, and together they expanded their holdings, building Midtown Operating Corp. into one of the largest fleets in the city.
Today, the Weingarten family has ownership stakes in 620 medallions and the Popovics in 147. Mr. Sherman and his sister Debra Tiffenberg together own 192 through numerous limited-liability companies.
“Ron Sherman bleeds yellow,” said Evgeny Freidman, whose 232 medallions are the most owned by any individual. “He understands the importance of the taxi industry to New York City.”
Mr. Freidman, the son of a cabdriver, added: “There’s no fat cats and no cash cows. I work 18 hours a day, and because we’re so regulated, we are completely aboveboard.”
That has not always been the case. In 1987, Mr. Sherman, who declined to be interviewed for this article, and his father were ensnared in what federal and state authorities called an illegal scheme to net free taxi medallions. Charges against Mr. Sherman were dropped, but his father, Donald, pleaded guilty in 1989 and paid a $125,000 fine.
Some believe the case is one reason Mr. Sherman has not been buying many more medallions in recent years. After all, life is good. He owns a house valued at $1.5 million in Tenafly, N.J., and a yacht that travels the world.
But there may be another reason: Mr. Sherman doesn’t have to own medallions to profit from them. He is CEO of Creative Mobile Technologies, which has touchscreen TVs in roughly half the city’s 13,237 cabs and gets 5% of credit-card payments. The card fees alone, after expenses, are worth tens of millions of dollars annually. And even though he opposes the borough cabs, he’s leaving nothing to chance: His company is vying to put its TVs in those cars, too.
Mr. Sherman’s savvy extends to his fleet operations. Despite cabbies’ lease rates having been frozen since 2004, he’s managed to keep costs unusually low. He inked deals with Ford to buy thousands of stretch Crown Victorias for barely more than it cost the automaker to build them, according to a source. He saves money through deals that let Shell and auto-parts makers test their products in his taxis, which run 24 hours a day and average 100,000 miles a year on some of the roughest roads in the country.
Every 12 hours, the cars return to his blockwide garage in Long Island City, Queens, for a shift change. He calls it “Ford country,” and on most days it’s where he parks his Lincoln Navigator. Last week, drivers milled about smoking cigarettes as they waited to lease a taxi for the evening. Many complained that they had to tip garage managers to get a car on a busy night. (The practice is illegal but not uncommon, as there are more than three licensed cabdrivers per available vehicle. A sign in Mr. Sherman’s garage reminds drivers they need not tip to be assigned a car.) They moaned about the cost of gas. They worried that any fare hike would be eaten by higher lease payments to owners.
But they came to Midtown Operating Corp. over other fleets for a simple reason. “These are the best taxis in the city,” said a cabbie with the nickname “U.N.” (“Because I talk to everybody,” he said). “The cars are clean; the suspension is always good.”
Mr. Sherman refers to “my drivers” in TLC testimony, but his first loyalty is to his business. When the city changed a rule prohibiting fleet owners from passing state sales tax on to cabbies, he sued and won. Now drivers must pay owners 4.5% tax on the cars they rent. (Mr. Sherman’s drivers grumbled about that, too.)
Industry representatives describe the lawsuits as a last resort, but because Mr. Bloomberg is one of the few city politicians immune to the industry’s influence, legal tactics may be employed to keep thorny issues like borough cabs unresolved until the next mayor takes office.
“Mayors and taxi commissioners come and go,” Mr. Daus said. “Ron is still here.”
If you seen any cab driver in front of this Guy garage place, call them like; Yo! Slave cab driver, welcome to American dream!
Ron and other taxi millionaires give cabs to drivers for leasing, so cabbies could make some money. We welcome successful cab drivers ideas and tips how multiply incomes driving yellow cabs. There is a better way, to make more money, but cabbies are in the comfort zone.
so he opposes an increase because he wants more. anyone who works for this guy now is a sucker. greed does not describe a man who lives in tenafly and has a yacht and fights to prevent a cabbie from making a few extra bucks. he has enough to last lifetimes but fights to keep a cabbie from making a little bit more. it takes all kinds. i am an owner too and i hope you guys get your extra $. maybe if driving becomes a good job all you american hating drivers will be gone.
All the drivers are victims of the rich war, the increase sounds good but you actually get nothing. passenger will give lessor tips and mostly like you will take home less with and increase. none of the above has mentioned how to imporved driver’s life quality.
Tell cabbies in Moscow, Tokyo, Dubai, London, Munchen, Sydney that you guys are making $100 in 12 hours, and they tell you that your head needs to be examined.
Greece has the same medallion system -look at its economy now. You can make one guy rich and thousands hungry, but I doubt that it helps the country. …
Tell to truckers about medallion system …
Every New Yorker should refuse to take taxis. Solidarity day with cabbies should be an official holliday.
This article at the beginning says Industry players call the rental garages that make up the Metropolitan Taxicab Board of Trade the “cabbie cartel?” Certainly, it is incorrect nomenclature, whether commonly used or not. A cartel is a giant so big it can squeeze the whole NYC taxi industry, thus it would be a “medallion owner cartel,” or “rental garages cartel ” The “cabbie” has virtually no power at all. I suppose you could call it a NYC “cab cartel,” because they own the cabs. But “cabbie” means the cab driver, and if every single cab driver was in an association, you could not call it a cartel, because NYC cab drivers have no power, except 100% strike, which does not really work, and it is never 100%.
Do I understand from this article, that the Ford Transit Connect is also an approved choice for NYC taxi owners, in addition to the Nissan 200 taxi of tomorrow? Here is some information on the Ford Transit Connect, Ford 2.0 needs some redesign. The idle setting is 750 RPMs, while a Chevy Malibu 2.2 Ecotec is set at 600 RPMs. That tells you something about fuel efficiency. Also, the Ford Transit Connect has three HVAC knob settings, that all have (hidden) A/C compressor use. Anything with the red defrost sign puts on the A/C compressor which elevates the idle setting by about 50 RPMs. The fuel efficiency on any of those settings (without telling you) elevates your RPMs by 50, and your gas mileage drops about 10 mpg. Even the Transit Connect “Taxi Package” with the rear seat supposedly set back an extra 3″ as opposed to the XLT passenger van, if the driver seat is set all the way back (and if it isn’t, only very short drivers will fit comfortably), and with the partition, the odd design gives the back seat riders small foot room. What is good about it, the headlights abd interior lights do not go on unless you put them on. On straight highway driving it will get 29 mpg, once broken in. Driving it as a lucky taxi, about 22 mpg. They come with a set of Continental tires which are decent. However, if the cab driver is constantly cruising, I would say 17 or 18 mpg more like it. Ford needs to work on lowering the idle setting.
This article talks about Friedman having almost 200 medallions. Well, wasn’t there a previous article that talked about the auctions and that Friedman was approaching ownership of 800 medallions? The Weingarten family including Popovics together owns about 850 medallions, I thought Greenbaum and the VeriFone guys owned almost 1,000 medallions? Also, I thought Sherman owned more than 192 medallions, although I do remember a Metropolitan Taxicab Board of Trade article that said it represents 2500 medallions. I wonder if some garages renting a large number of medallions are owned by these kingpins but not under their own names. Just asking.
It is good that the state Supreme Court Judge (the former cabbie) issued a temporary injunction preventing outer boro livery hails, but if justice were justice, no one, not even Governor Cuomo, would have planned and approved double-selling NYC medallion hail rights, when they were already sold and purchased. I call double-selling hail rights a criminal act being passed off as a B4roombertg deceptive euphemism. The deception? Big money to be made, but not by the drivers or the individual medallion owners.
Here’s the real deal. The city/state Legislature are to be blamed for the whole mess within the taxi/medallion industry, which has become for the most part an illegal monopoly over the years, starting with the city. Having decided to limit the number of taxis by way of issuing a certain number of medallions, which is a good thing as far as that goes, the city and/or TLC should also continue to regulate the taxi industry, but without discrimination. Therefore, the City should strictly allow but one taxi medallion (transferable) per one, or more, qualified individual owner/operator. This also goes to say that the city should recall all the fleet medallions and any additional medallion held by individuals beyond one medallion per person. Until this negligence is finally reversed, the medallions and effectively the current taxi industry are so unconstitutional and even illegal as it were. My suggestion at this point is to never to buy a medallion, at any cost, until the City makes it a legitimate opportunity.
Recently HBO aired series on mobsters. “Soprano’s” and “Boardwalk empire” were big hits.I hope Hollywood will come up with something similar about NYC Taxi .
I do remember that picture of Friedman with the bling on his wrist. Am I wrong? He got financing from Russia, said the article, and his auction bids were going to get him approaching 800 medallions. What about it?
In this article about king pin Sherman and his MTBOT controls 40% of NYC medallions, that would be about 5,320 medallions out of a total of about 13,300, when I did read googled websites saying he controlled 2,500. This is double.
However, when all the talk and planning goes on, the individual medallion owners thought to be between 4,500 and 5,000 medallions, these guys are the ” also rans .” Yes, you do have the NYC Taxi Drivers Association, spokesman, Bhairavi Desai. But don’t I understand that individual medallion owners under federal law cannot really form a union, and this is why it is an association? So, are these individual medallion owners represented by only the words of Bhairavi Desai? I suggest every individual medallion owner form an ethnic association, say arab-speaking owners, Greek owners, Indian owners, Italian owners, I bet you could get 40 ethnic associations, and you could register those associations ‘ to promote their interests in the NYC taxi industry. ‘ They should not charge dues, but when the word comes out that some plans for the NYC taxi industry are being discussed , then the president of each Ethnic Association, should send a letter to the Commissioner of the TLC, with copies to Major Broombuck, each New York City newspaper editor, and the guv’nor. And it should say, well why are discussion ongoing including all the rich players, the fleet renters, and all those who do not own individual medallions, and nor do they drive cabs. Why has the ‘Greek cab owner and drivers’ association not been included in these discussions, and asked for their input? Sign it by the president. If suddenly all these people got letters from 40 ethnic associations for their respective individual owners and drivers, wouldn’t they have to be included? Why should the rich non-drivers be invited to discuss with Commish and major all the plans? This is big money at work, and to say that Ms. Bhairave Desai was consulted and had an opinion, well 4500 to 5,000 medallion owners were not consulted and each of the associations will not have the same opinion. What happens, person wants to start an association, registers it, makes a list of everyone’s personal information, and wants to charge monthly dues, and open a bank account for court. This is wrong, do not collect dues, list your own medallions and drivers yourself, you do not need to publish them, and by the time court has happened all the crap has already happened. Courts usually deem gov’t commissions as the ‘ good guys .’ But not in taxi regulation, no way. Industry associations have to pay a lot of money and work a lot harder. But 40 ethnic associations could not be ignored, and must be included in the planning and discussions. If not, that is a very good way for the President and Association to go down to the court and use that as a way to snuff out the plans. We were all excluded 4,800 individual medallion owners and drivers, none of the ethnic associations were included.
Medallions, whether individual or corp. is out of reach for regular folks. City should just issue permits, and let the taxi drivers earn livable wages, and not being slaved.
Ford needs to find a substitute for the Transit Connect Taxi page’s air blower that shares the HVAC settings with the rear seat riders. Even if the rider(s) turns the knob to the lowest setting, and there are 3-on settings I believe, it sounds like a lawnmower getting louder and louder, if the passengers get out without turning the blower off (and why would they take the time to do that?), the driver must stop, get out, and adjust the blower to off or the first setting. But certainly quiet blowers are available. Ford, please make the substitution.
You’ve all heard the saying, ‘ Heads I win, tails you lose. ‘ Well the NYC Taxi card-swipe king pins, both Verifone & Creative Mobile Technologies (Greenbaum & Sherman, respectively) play the same game. From the card-swipe they get 5 or 6 percent, but the driver loses 20%. You will never hear these two card-swipe operations say that drivers lose 20% of their share of the fare – drivers pay the processing fee on the whole fare, but when that fee is subtracted from the drivers share of the fare it adds up to 20% of what the driver normally gets, and any fees the drivers’ pay to get back their own money, the 80%!. This is like the king pins’ saying, I get 5% or 6% or 4-1/2%, yet never saying but you lose 20%. When will the king pins speak accurately about what they take from the drivers’ pay?
Sunman; Lots of businesses are out of reach off regular folk. Why not give away mc donalds or first ave bus runs. why stop at cabs? free businesses for all, sounds commie to me.
Meter Peter, – McDonald offers full benefit package to its employees, 40-hour week and a chance to get promoted to manager position. There is no need to buy one.
City officials should threaten people like Sherman with issuing permits to the drivers, unless they bring taxidrivig job up to American standards. You can not hire people in NYC without meeting the requirements of a civilized nation.
Peter meter, thanks to commi countries Americans had good jobs. With the collapse of the Soviet Union all you got here are slaves and their exploiters – nothing else.
Make new law to limit of owning medallions per person. The Mayor, if you can stand third time as the city mayor, then why not make law of limitation of owing medallions… These Big shots keep cabbies slaved. Do I say something wrong here?
2nd time Fed court shot down Broomstock saying that cutting FCV rentals by $3 a shift, and enabling hybrid rentals a $3 more a shift, was an end run around the middle to try to force hybrids onto the taxi streets. If major thought the $3.00 number was significant enough to bring about hybrids, $3 or a $6 spread (was it?) was something big. Was that for Sherman (two shifts) 400 times $6 = $2400/day, or $16,800 extra per week?
But Broomsruck has announced, says the article, that he wants to ‘ limit ‘ rental increases under the fare increase to $9 per shift, $3600/day, or $25,200 a week. When rental garage owners heard the major wanted to ‘ limit ‘ rental increases to $9 per shift, they must have shouted Eureka! and jumped into the air so high they hit their heads on the garage ceilings. Say a 1,000 medallion garage, 2 shifts with an extra $9 per shift, $18,000 extra a day, or $126,000 extra each week. Limiting to $9 a shift, wowee, the rental garages get some big reward for going along with the major and putting in the card-swipes and taxi of tomorrow!! Behind the scenes, it is hot time in the old time tonight! Isn’t everything always settled behind the scenes, away from cabbie eyes?
When drivers make 10-20 thousands per year they tend to take money to their own country. When drivers make 50-80 thousands annually they stay here, which means that 1 billion dollars are invested into an American economy ,which in return means hundreds of new jobs in retail,service and manufacturing .
Medallion system has been an effective tool some 40 years ago .It helped many drivers to achieve a finnancial independence .Since that time America has transformed into a completely diffrent country. Thanks to new technology, we have a lot of well paid jobs .The only thing which has never changed is an archaic medallion system. Today’s driver’s gross income is just enough to pay bills ,there is simply no place to pay for medallion and finance fees,America is a dynamic country ,we change .The same should happen to taxi industry ,in its currient shape and form it does not work.
Truckers have an association called OIDA which vigurosly protects driver’s rights.According to maritime laws anytime ship owners fail to pay salaries to the crew that ship gets arrested by coast guards. Tough laws in taxi industry could stop people like Sherman from ripping off cabbies.
The system here is to make rich richer, and poor poorer. The system thinks the benefits of these big shots. They make something new regulations and who gets real benefits….. we all know.. i will be driving black car from next week….. no more yellow cab…. what u earn,, you keep yourself…… dont wanna pay anymore to these garages, 5% credit fees, and all bull shit…. and medallions…. with black car i can at least make more than yellow cab make…. with no ripping off….
bye yellow cab.
Taxi Drivers go out to make some money. some times they get back home with lots of bills of dept of none trafic vialtions such as standing ticket. Shouldn’t the traffic guys think better than attacking drivers unfairly?
How could a group of people leave thousands proffessional drivers out of of work is beyond understanding? Is outsourcing the future in every industry? Socialism, as bad as it was, preserved working class.
There is no future in America. You make good money in Russia. Are not you tired of guys making 15k a week and giving you $2 tip on a $20 ride? This kind of things don’t happen over there. To start a bussiness here you need 1 million dollars, endless penalties, fines, rules and regulations. Putin offers free houses for people to come back. Once brains start to leave, then all you have here are Shermans -boring unimaginative people. Cab drivers have great respect in Russia. Here you are a public enemy.
Creative people don’t always find a success. You might have to go through many years of your life and not being recognized. Somehow you should support yourself .That is a main reason why jobs like driving a taxi has been existed .Giving it all to people from other countries is like destroing the future of your own nation. No wander today’s movies are hard to watch , actors are look alike ,no characters, no politicians either. You must have a lot of life experience before of what you do becomes interesting to others.
How bad can it get? Driving taxi in New York considered the worst job in America. People would rather be homeless than drive taxi. Not a single American has applied for hack license in years.