He’s not even 40 yet, but Gene Freidman is fast becoming one of the taxi kings of New York.
The Russian immigrant has dominated recent medallion auctions and now owns 200 of the lucrative licenses, making him one of the biggest players in the business.
He also operates as a broker and has helped his business partners win dozens more of the metal shields – the value of which shot up last week to $600,000 apiece.
In fact, Freidman has gotten so good at the game that city bean-counters recently got suspicious when they saw he and his clients had submitted blocks of identical bids at several auctions.
The probe by the Department of Investigation found Freidman and his clients hadn’t broken any rules – but the rules will now be changed to make collusion more difficult.
“I was a broker, but also a buyer,” Freidman explained. “I can’t advise my clients to bid lower than me. I don’t want to advise them to bid higher than me.”
Freidman, 36, came to the U.S. when he was 5 years old. His father was a thermonuclear engineer in Russia. Here, he had to drive a cab to pay the rent.
But he managed to buy his own medallion after a few years, and eventually built a small fleet. After his son became disenchanted with a law career, he took over the business.
Now Freidman has four garages – he just opened one in Long Island City, Queens – some 2,500 drivers and more than 800 cabs, many of them leased.
In addition to his side business as a medallion broker, putting together private deals and dispensing auction advice, he also sells taxi insurance.
In the past three years, he and his business associates have made their mark with medallions reserved for alternative-fuel vehicles.
At the first-ever auction of them in 2004, Freidman’s group snapped up all but one at the now-bargain price of $222,743 each.
Getting them on the road was more difficult. The Taxi and Limousine Commission tried to back out of the deal, refusing to approve hybrid vehicles for use as cabs.
Freidman sued and eventually prevailed. He now has 150 hybrid cabs in his fleet and says the drivers love them because they save money on gas.
When Mayor Bloomberg called a press conference last month to announce plans to have all the city’s cabs go green by 2012, he invited Freidman to be at his side.
“It was kind of ironic,” the businessman said, recalling his battle with the TLC to get the first hybrids rolling.
Freidman is the first to admit he’s hardly an environmental activist. He bought the hybrid medallions because they were offered at a discount.
“I wasn’t a green person. First, I’m a yellow person, a taxi person,” he said. “But if you can be green and operate your business successfully while helping the environment, why not?”
When he was fighting with the TLC, he met with groups like the Sierra Club that also wanted alternative-fuel taxis – though for different reasons.
“They kind of opened my eyes,” he said. “I drive a gas guzzler,” he admitted. “But it’s starting to bother me.”
{ 6 comments… read them below or add one }
Brooklyn Mark 05.18.08 at 8:34 pm
This guy is the DON of the Yellow Cab Game. That watch looks like its worth a few medallions!
mirza alam 07.15.08 at 8:00 am
good job, keep it up.
Anonymous 05.29.10 at 6:39 pm
I thought Raphael yakobys dad started yellow cab
Morris 05.31.10 at 11:35 pm
gnyta claims to represent 1500 medallion owners. Gene Friedman rumored now to own 800-1000 medallions. I suppose he is the biggest in the association, but who are the other 500 medallion owners the gnyta represents? Are they blocks of medallions owned by garages or small (single, double) medallion owners? Or is there another association of all the private owners? How many medallions out of 13,400 are owned by the single, double owners?
Morris 06.01.10 at 7:00 am
When 2003 and subsequent annual auctions of NYC medallions shockingly jumped prices from about $200,000 to current $700,000/medallion, who lost, who gained? For 1200+ medallions auctioned off, New York City gained revenue for such fast, drastic inflation of those sales’ prices. For 300 sold at $600,000, $180 million for NYC. 300 sold at $200,000, $60 million for NYC. No surprise how 4 or 5 years of auctions generated $1 billion for NYC coffers. It was WELL KNOWN before the auctions started in 2003 that BIG MONEY would be made, that medallion prices would be inflated astronomically. Those in the know jockeyed to gain ownership of as many medallions as they could, and when the prices of their medallions flew up by almost half a million dollars each, they were all in FAT CITY. Those who owned even one medallion made money on PAPER but if they sold their medallion they LOST THEIR JOB. Hard for an owner to become a daily leaser. New York City taxi business, we suppose, has borne the ramifications of such high-priced medallions. The medallion brokers and financiers (who also owners), by what they were willing to finance and bid, set off the rapid escalation in “value” of medallions. Shouldn’t have been “any big surprise” for the City of New York, because in 1998 in Boston the same thing happen. Auctions of total 300 medallions over few years were in the works, and players scrambled to get medallion ownership, going so far as to scare or “dupe” small owners into selling. The value of medallions jumped from about $80,000 to $200,000, then relatively quickly to $400,000. Boston, such a small operating territory compared to NYC, could not carry and support such inflation in its financial system, and while the insiders made LOTS of money, it was at the expense of an inflated-value medallion, and huge loss in cabbie pay. New York City with 3 airports operating 24/7, hotel business 24/7 — Boston with one 4-terminal airport operating about 16-18 hours daily. Most other available business coming from hotels & business in SMALL downtown areas. The City of Boston gained about $30-40 million through the auctions that inflated its medallion value. While it is good the medallion value is up, the PRICE component in the financial system of small ownership is pushing, like New York City, medallion ownership to the big block owners, forcing small owners to sell out. Amid Boston auction process 9/11 occurred placing small owners in great financial distress with no relief granted by the powers that were; seemed happy that small owners were driven out.
And finally, we read for each NYC medallion auction about 1/2 were set aside for 1 person to purchase a pair, and 1/2 were set aside for garages (large block owners) to purchase. If that is so, then how did Gene Friedman wind up with so many medallions? Newspaper articles depicted many hopeful immigrant cabbies as bidding and buying pairs? Can these hopefuls still make it, or are they being pushed out of business with loss of pay and increasing costs of operation?
Cabbies and pair owners are left working their butts off to support a too-high financial system. But did we expect anything different? We know where the TLC always points their “green” noses, green the color of money. Money is the name of the game.
Morris 06.01.10 at 7:07 am
No matter how you look at it, the cities took their self-given, bonanza cash windfalls, leaving behind a harsh and increasingly harsh financial model for pair owners and and cabbies. As one commentator said, no matter how high the pile of bodies is, drivers, riders, pair owners, nothing is about SAFETY, it is about GREEN CASH.