Speculating in cab medallions

Prices below are medians (2009), and “average” for earlier years.

Month                Price               Source

October ’09        $185,000       City of Chicago
May ‘09             $170,000       Chicago Dispatcher
April ‘09            $164,500        Chicago Dispatcher
March ‘09           $165,000        Chicago Dispatcher
February ‘09      $158,000        Chicago Dispatcher
Feb ‘07               $  77,000        Chicago Tribune
2004                   >$40,000       Chicago Tribune
1991                     $28,000         Chicago Sun Times

The October list includes two sales at $190,000.

As medallion prices rise despite a sagging economy, this seems to me to indicate that fares are already too high and should be reduced, which would allow medallion prices to fall and, in theory, drivers would be unaffected while passengers benefit.

But Chicago Dispatcher publisher George Lutfallah sees it differently.  Due to difficult conditions in the taxi industry, individual medallion owners are selling their medallions to big owners– the taxi equivalent of land speculators. Lutfallah sees this as a bad thing, “a taxi driver who owns his or her own cab is more likely to take better care of both the vehicle and the customer.”  He therefore recommends a fare increase.  (source: print edition of Chicago Dispatcher October ’09)

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One Response to “Speculating in cab medallions”

  1. Peter Zelchenko says:

    Chuck, the price has broached $250,000 this year.

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