The sale of two taxi medallions priced at $1 million each was brokered by Nat Goldbetter at Queens Medallion Brokerage Corporation in Long Island City.
The million-dollar taxicab is here.
Two New York City taxi medallions — tin plates that grant the right to operate a yellow cab — changed hands on Wednesday for $1 million apiece, the highest recorded sale since the city’s modern livery system began.
The sale was the culmination of decades of astonishing growth for the humble medallion, which is literally nailed to the hood of every yellow cab in the city. When New York issued its first batch of medallions in 1937, the going price was $10 even, or $157.50 in today’s dollars.
Some perspective: The Dow Jones industrial average has risen 1,100 percent in the last 30 years. In the same period, the value of a taxi medallion is up 1,900 percent. That return beats gold, oil and the American house.
Sky-high prices and million-dollar deals seem a far cry from the medallion’s early days; when World War II came around and demand for taxis dropped, many drivers simply returned their medallions to the city to avoid the annual $10 renewal fee.
“It’s a lot of money, and it is an investment that someone would not make without being confident in the industry and the future of the city,” said David S. Yassky, chairman of the city’s Taxi and Limousine Commission.
The man who brokered Wednesday’s sale, a taxi financing specialist named Nat Goldbetter, grew up on the Lower East Side and got into the taxi business in the 1960s as a driver. He bought his own medallion in 1969 for $25,000, but sold it a few years later. “I could have made a zillion dollars, but I did O.K.,” he said.
The million-dollar sale was hatched earlier this year, when Mr. Goldbetter received a visit from an old acquaintance looking to sell two medallions purchased for $80,000 apiece in the 1980s. There was an offer that valued each medallion at $975,000, but the seller was hoping for more.
With many owners reluctant to sell these days, hoping for the value to keep going up, Mr. Goldbetter figured he could find a willing buyer. The papers were signed on Wednesday morning.
“Nobody ever thought the medallion would get to this point,” Mr. Goldbetter said on Wednesday from his office in Long Island City, Queens, a few hours after the papers were signed. “It was pretty cool. It broke up the boredom of my work.”
Mr. Goldbetter, a youthful looking 67, was no stranger to the historic: In 1985, he handled the sale of the first $100,000 medallion, a feat that earned a front-page article in The New York Times.
“It’s kind of history repeating itself, only multiplied by 10,” Mr. Goldbetter said.
There are 13,237 medallions in the city; new ones, when issued, are sold at auction. Large fleets, which can control hundreds of medallions, often find it easy to secure financing to meet the high prices. Medallion sales can make for big business: the biggest lender, Medallion Financial, is a publicly traded company (ticker symbol: TAXI) and shares its skyscraper on Madison Avenue with the Rockefeller Family Fund.
Corporate medallions, like the two sold on Wednesday, do not need to be driven by their owners and can be leased out 24 hours a day. Individual medallions, which make up about 40 percent of the fleet and must be occasionally driven by the owner, are worth slightly less: the latest sale was for about $700,000.
The secondary market in medallions and its private transfers began after World War II, at the starting price of $2,500. The value quickly grew, crossing the $50,000 mark in the mid-1970s. But the steepest period of growth has been over the past decade, when the value of corporate medallions nearly quadrupled.
So are we entering the tulip era of the taxicab? Could a million-dollar sale signal the beginning of the end of the great yellow cab bubble?
“No one is very good at forecasting the economic future right now, but I would say no,” said Graham Hodges, a professor at Colgate who has written a history of the taxi industry. He said the investment in a medallion is comparable to purchasing an apartment in Manhattan.
“It will always make good money and pay for itself,” Mr. Hodges said. “There are certain things that are just gilt-edged assets, and this is one of them.”
As for the first $100,000 medallion, it was sold to a young immigrant from Hong Kong named Stanley Cheung. In 1985, he told The Times that he heard medallion values were on the rise, and if the price kept going up, he might sell. “There are things better than driving a cab,” he said.
Mr. Cheung did indeed sell his medallion: in 1987, for $125,000. After paying the expenses for his cab, Mr. Cheung came out about even, according to his wife, Shirley Cheung, who was reached on Wednesday at the couple’s house in Little Neck, Queens.
“One million? Oh my God!” Ms. Cheung said, when informed about the recent sale. “I don’t want to hear about it. I have to sleep tonight.”
Ms. Cheung laughed, and said that she was well aware that medallion values had skyrocketed in recent years. Her husband, she said, looks at the prices every once in awhile, but she tells him not to share. “It’s O.K.,” she said of the high value. “I just don’t want to hear about it.”
Nat That’s a great photo!!!
TLC should open the easy Because people
Cross in green light. Than what should cab do.
Just go over people or hunk.
This is an artificial market created by bloodsuckers that inflate the value of nothing and force poor immigrant drivers to pay with their blood while the owners sit back and clasp their hands with greed. The city allows these poor drivers to be taken advantage from every angle. The best thing Bloomberg could do is approve the outer borough taxi’s and deflate this bubble.
The real question is, how hard is it to find a cab in NYC? While I think, $950K for a taxi medallion is absolutely ludicrous (wouldn’t it take a lifetime of fares to pay that back??). I’m also not sure I could recommend just letting anyone operate a taxi. Cities have finite space, and when the streets are wall-to-wall cars, everybody loses (I have seen this in happen in Hong Kong and Seoul). There must be some sort of compromise solution. I’m guessing that we will see a robust industry in making fake medallions (if it already isn’t happening).
guess who jack up the medallion prices, the new immigrants from india, pakistan, Russia & etc…these guys don’t caculate when they buy them. it is all political gimmick. do you see any jew, itilian, chinese, korean spend this kind of money today to buy this ? they all knew the medallion itself have no value at all, and the appreciation have no grounds to base on. unless if the fare increase percentage is equal or close to the medallion price percentage increase, then, it is worht a while to invest. for example, the medillian price in 2005 is about 1/2 million to 650,000 comparing to today’s 950 thousand. is an increase of 60-70%, but now, all you taxi driver is a happy shXt with 17% increase and thanking your friend yassky. Also thank him for busting your chops to control you with your investment. what the hell.. I guess no one realized that the taxi is so busy is because nyc have the world’s cheapest fare. some tourist had never dream of a taxi in their own country come here for a taxi ride. therefore, if you have 950 grand, buy a 3 or 4 family house, your rental income is about the same as you drive 6 days a week and 12 hour a day,
Bar of soap can be priceless during tyfus epidemics. Poverty level is an all time high, Europe is in turmoil, middle east crisis, heavy subcidies to keep manufacturers afloat-all says world economy is a sinking ship. Yes, you can cut valves, replace rings and bearings, but if the block is coroded engine has to be replaced. Too much money is concentrated in few hands, we are on the verge of another world war, or great depression. Dollar is worthless, this last sale is a true example of that.
Adjust that to inflation, substract capital gain and you’ll get zilch!
I am replying to that ridicules comment that you made about who is in the market to purchase the medallions my self is looking to purchase, when you go to the brokers you will see a lot of jewish and italian on the waiting list, now that they realized that it is a lucrative business do your home work before you talk **** out of you ***. Now you are probably right about the chinese but not the jews and Italian as a matter of fact its couple of my neighbors that are Italian and jewish that mention to me to get into this business. You probably will never see there face because they are not the drivers, what the medallion owners do is purchase the medallions and have responsable drivers that u can trust drive the cars or rent them out to the brokers and receive a monthly payment …..And these guys are doing very well, i mean very well … you are right about the inflation of the prices its a little steep, but when they realize that medallion owners are living a nice life such as houses on the water, buying boats and they realized that the immigrants (italians,indians,haitians,jewish and russian) are progressing with this business they jack the price up, this happens in any business that you are in, when demand is high and the supply is low the price will go up. This is one of the principles that our economy is based on.