Taxis

The World Was His 'Oyster.' Then Uber Rolled Into Town.

Winners and losers in the great taxicab collapse.

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New York City cab driver Jaswinder Singh was the subject of a sad and fascinating profile in the Epoch Times this week by reporter Amelia Pang. The story gives a human face to the story of collapsing taxi medallion values.

When Singh purchased his medallion in 2008 for $450,000, the world became his "oyster," he told Pang. The medallion's value soared. So Singh borrowed an additional $390,000 against its value to buy a house in Long Island for his wife and three kids. He also started renting out his cab in the evenings to another driver for $2,000 per month.

Last September, his driver left to go work for Uber. Singh was left to cover his roughly $7,000 in monthly overhead by himself. (The first $4,300 goes to cover the medallion mortgage.) So he started driving seven days a week, which means he never gets to see his young kids. Even so, his bills are stacking up and he hasn't paid his medallion mortgage in three months.

Then Singh's health started deteriorating:

He went to the emergency room twice in September for an overwhelming bursting sensation in his stomach.

It turned out Singh has kidney stones. But his main reaction was frustration that he had to go to the hospital on a weekend, when driving was most profitable.

"I'm scared something will happen to him," said Ruby Singh, his wife. "He's sleeping only four to five hours. He's losing his weight."

Cabbie and medallion owner Alaa Khalil. |||

I feel sorry for Singh. In August, I profiled Alaa Khalil, an Egyptian immigrant and medallion owner, who's having a similar experience. He also borrowed against his medallion to buy a house, which drove up his monthly payments. Now his farebox revenue is plummeting, and he's also facing financial ruin.

The experiences of Singh and Khalil highlight why medallions were such a bad idea from the outset. "Not every city exposes small investors to this business to making big bets on public policy," says New York Times reporter Josh Barro, who was interviewed in my story on Khalil. Those big bet paid off handsomely for years. Then they stopped paying off.

It's also important to remember that for every medallion owner like Singh and Khalil, there are many more cabbies who've seen their quality of life improve immeasurably thanks to Uber. The Epoch Times quotes an Uber driver named Samuel Nunez:

As a yellow cab driver, Nunez earned around $30,000 a year and paid the medallion owner to use his car.

With Uber, he doesn't need to pay a garage or medallion owner. He drives his own car.

"With Uber, I make about $60,000 a year—and right now, I'm only working three days a week," he wrote. "We're no longer stressed about paying the bills and are more focused on spending quality time with one another and doing what we love."

For more on the fallout from the great taxicab collapse, and for Alaa Khalil's story, click below:

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  1. What he did was actually very smart.
    He borrowed against the *medallion* to buy the house.

    Solution: Default on the mortgage, let the bank keep the medallion, and keep the house.
    Then go drive for Uber.

    1. Banks suck at valueing stuff…really, really suck.

      1. Law of large numbers. If you get enough assets, the over and under starts to average out.

        I mean, what are the odds that an entire asset market might systematically overvalue nearly all assets? And even if that happened, surely that all the assets in that market could never precipitously plummet.

        1. I’m unclear if this is meant to be satire, but to address the question of “the odds that an entire asset market might systematically overvalue nearly all assets”: um, 2007-2009 nationwide mortgage crisis?

      2. Banks suck at valuing stuff…

        I doubt the bankers are quite stupid enough to want his medallion. I bet he could walk in and find them hot for any deal that didn’t involve repossession.

        If someone knew NY banking laws and was willing to work in the City for a year, I bet she could set herself up as a “fixer” for medallion mortgages, and then retire.

    2. He doesn’t seem aware of his own brilliance judging from his actions.

    3. That was my thought too.

      In New York is he liable for the balance?

      1. Liable for the balance is still better than where he’s at now.

        Let the bank reposses the medallion, refi the difference with the house as collateral (a normal mortgage). Watch his ‘overhead’ get cut by 2/3rds.

        1. Not even remotely that simple, for several reasons:

          1. Medallions aren’t financed by traditional banks; rather, they’re funded by entities that *only* lend to medallion buyers. The reason for this is pretty simple: there’s no way on earth an average aspiring medallion owner — in the pre-Uber world, at least — has the assets or collateral needed for a loan that large. As such, the odds of the medallion lender suing the buyer for the remaining balance — on *top* of repossessing it — are high.

          2. How on earth do you think he’ll be able to refinance his house? (*especially* if his medallion is repossessed and he’s sued for the balance, which will destroy his credit record) The only reason he was able to buy it in the first place was because he obtained a loan using his now-effectively-worthless medallion as collateral.

          In reality, the only scenario in which he *might* keep his house is if he *doesn’t* refi (and has the financial wherewithal to continue making payments on his existing mortgage). It wouldn’t make sense for his medallion lender to go after his house, since he presumably has little to no equity in it. He could possibly refi in the context of negotiating lower payments, but not in the one of getting an altogether new mortgage.

          1. I don’t think he has a home mortgage. He bought it outright with the medallion loan.

            1. I think the problem is that the bank would sue him for the remaining balance of the loan if the medallion is underwater. Honestly, I don’t see why that should be legal. Why shouldn’t the bank take a haircut if they overvalued the medallion?

          2. It sounds like he bought the house outright with the loan based on the medallion, so I’m assuming he doesn’t have a house mortgage, only a medallion mortgage.

    4. Is it that simple?

      1. Should be. Unless NY is one of the few states where you’re liable for the difference between what the bank sells your collateral for and the loan, they take the collateral (in this case the medallion, not the house) and he walks away with a house, a hit on his credit report, a reduction of $7k a month in bills, and then gets a new job.

        1. Iirc, those few states number 32. The 18 are the ones that had most of the problems.

    5. Seriously, the day he went underwater on the medallion he should have gone to the bank, handed it over, walked away and signed up for Uber. The “Epoch Times” would have done an article about what a genius he was.

    6. Saying “Fuck you, I’m not paying the money I owe you” isn’t really my idea of a libertarian value.

      By the way, your attitude is what led to our government bailing out the banks to the tune of trillions and trillions of dollars.

      1. It may not be subjectively moral but if the contract allows it it is objectively moral. The bank took a risk, they lost, happens all the time.

        1. A contract spelling out procedure for a breach and a contract condoning a breach are two very different things.

          Mortgages aren’t option contracts, they’re contracts that specify how the bank gets its money back if you decide to breach the contract. It’s objectively immoral to breach a contract, even if other contracting party is smart enough to write down what happens when you breach.

          1. Libertarianism is a political philosophy, not a moral philosophy.

            1. That’s quite questionable. Libertarianism starts with a moral principle (the NAP) and then derives political rules from that principle. There is really little “philosophy” involved in the derivation; at its heart, libertarianism is indeed a moral philosophy, albeit a very simple one.

              1. Well, what I mean is it doesn’t prescibe personal morality. It’s a set of rules governing political institutions, but it doesn’t tell individuals how they ought to behave within the legal limits of those institutions.

                1. It does when the action is between two or more individuals.

                  All actions are allowed except those involving the initiatory use of force, threats of force or fraud.

          2. Well he eouldn’t b

          3. It’s objectively immoral to breach a contract,

            That’s debatable and amounts to a cultural norm, not some universal moral principle. And it’s a cultural norm we might to well to abandon, since it clearly isn’t followed by many market participants, placing people who do follow it at a disadvantage.

          4. As long as he hands over the collateral, the medallion, he’s not in breach.

    7. Can’t the bank sue him for the deficiency on the medallion’s lien and take his house eventually?

      1. I don’t see why. If they accepted the medallion as collateral, then they get the medallion, period. It’s their own damn fault if they accepted an asset that is now worthless as collateral for the loan.

        Now, the law may say otherwise, but if so then the law is an ass.

        1. It’s their own damn fault if they accepted an asset that is now worthless as collateral for the loan.

          Does it work the same way in the other direction? When you’ve paid down 80% of your mortgage, your entire house is still collateral. Is it your own damn fault that your collateral is 5x what you owe?

          1. If you sign a contract saying the bank gets to keep the equity, then it is.

  2. “Last September, his driver left to go work for Uber. Singh was left to cover his roughly $7,000 in monthly overhead by himself. (The first $4,300 goes to cover the medallion mortgage.) So he started driving seven days a week, which means he never gets to see his young kids.”

    The seen.
    All those people who now get a convenient ride and get where they’re going on time?
    The un-seen.
    While Singh has a certain amount of my sympathy, he bought a rent-delivery device which didn’t work, so that sympathy is *very* limited.

    1. Ive mafe 6 figure financial mistakes too. I feel no sympathy, just get over it and move on.

      1. And I’ll bet those mistakes we’re betting on some rent-seeking scheme, either.

        1. Nope.

          Refusing to sell a Tech stock in 2000 because I didnt want to pay taxes was a big one.

      2. Same here. Not six but significant 5 digits.

        Now I upped my game to 6 digit investments.

        Fingers are always crossed in business. Not too far away is the ‘You never know’ fairy whispering in your ear.

        1. doompaul.jpg

    2. “The seen.
      All those people who now get a convenient ride and get where they’re going on time?
      The un-seen.
      While Singh has a certain amount of my sympathy, he bought a rent-delivery device which didn’t work, so that sympathy is *very* limited.”

      In Agorist land there is no such thing as a protected Free Lunch. I feel sorry for him too, but when you use cronyism, you die by cronyism.

  3. Am I suppoaed to feel bad gor rent seekers? Should I feel bad that Hitler died in a bunker too?

    1. You know who else died in a Bunker?

      1. Edith? Or was that with a Bunker in her?

        1. No point me adding a joke here, yours will overshadow it.

      2. John Daly?

  4. OT: Has anyone else received healthcare premium change notices? Mine is up nearly 30% for a high-deductible plan, no preexisting conditions.

    1. My company has now stopped offering a traditional POS plan, and our only choices are bronze, silver and gold plans with a ridiculous deductible. I’m going to have to go with the gold since I don’t have several thousand dollars in the bank to cover the deductible. My share will be over five hundred dollars a month, and it won’t cover a single thing until I have over three thousand dollars in medical expenses over the year. It’s a fucking joke.

      1. The premium difference between the 3 levels usually is about the same as the deductible difference. You’re better off taking the bronze plan and sticking the monthly savings in the bank to cover the deductible if something does happen.

      2. Read POS as piece of shit. Sounds like that is what they are still offering you; only now they have tried to make it look prettier by gold plating that POS.

    2. Yep, just got mine. I’ve averaged 37 % increases over the past 3 years (Roughly 23% per year prior to 2010) and out of pocket is now 235% of what is was on what is now called a “Gold” plan.

      Thanks Obamacare!

    3. I wonder if this is used in the consumer price index?

      1. Probably not. The CPI doesn’t compare the quality of goods.

      2. Probably not. The CPI doesn’t compare the quality of goods, nor (AFAIK) does it account for employer-paid benefits or deductibles. It may eventually up the out-of-pocket medical expenses in the shopping basket, but I wouldn’t hold my breath.

        Not that it matters; the CPI is mainly used to adjust government benefits, and underestimating its increase is arguably a good thing.

    4. My premiums are still ok, but they are eliminating the EPO plan that I liked, which covered 100% in network (no out of network coverage). So now I will have a deductible and pay co-insurance. The deductibles are like $2000 to $4500. Which basically means “dont go to the doctor unless you have a chronic condition.

  5. And I thought my law license was expensive…

    1. Did you ever get re-ensouled after you passed the bar? Not sure how hard an orb of Thesulah is to find these days.

      1. Never lost it.

    2. If it wasn’t for those $79 slideshow CLE’s, I’d be using “probably” instead of “likely”, sending emails with disclaimers in lower case, referring to other attorneys by their first names, and pretty much leaving a trail of destruction. Is not the state benevolent in its bounding of our human nature?

  6. I can’t wait to see how the collapse of this crony complex alters local government.

    1. I envision a doubling-down on the current city government’s leftist stupidity – more blathering about a “living wage” and “affordable housing” for the put-upon taxi driver class who were so heartlessly screwed over by Big Share.

      1. Meh I think they’d do that anyway. This is an important power structure that’s getting leveled.

  7. amazing the power that cities and towns have. Read recently of someone getting a $50 ticket in suburban boston because uber wasnt authorized -pretty absurd to have a town-by-town regime.

    But the arguments against Uber are all basically absurd.

    1. But the arguments against Uber are all basically absurd.

      The arguments against freedom always are.

  8. He gets my sympathy from a humanist point of view. I always have that reserved for people who get into business because we need entrepreneurial people in society.

    However, that’s business. Things change in a heartbeat. I can just as easily end up like this guy if my business starts to sink.

    1. Simple: get Trudeau to outlaw business failure. You’re set for life!

      1. Are you trying to rile me up?

        I’m worried what The Shiny Toy government has in store for the country!

        1. Are you trying to rile me up?

          I like Rufus rants. I call them Rufies.

          1. My rants are rooted in truth!

            1. *rooted in Truf?

            2. Rufie me, Rufus!

              But seriously, all I’ve heard about the guy are vague complaints by American and British commentators. When Britain went solidly Tory there was a deluge of retrospectives about shy Tories and the betrayal by SNP voters, so what’s the explanation for Canada going full retard?

              1. The combination of a charismatic character and having grown weary of 10 years under the conservatives kinda sealed the fate.

                Now derp reigns.

                1. The combination of a charismatic character and having grown weary of 10 years under the conservatives kinda sealed the fate.

                  Now derp reigns.

                  I’ll add that last time I saw this kind of media electioneering was in 1990/91 Serbia, when every newspaper (save one), radio station and TV station in the country worked hard to make sure we know voting for anti-Milosevic opposition will ruin the country and lead us straight into the war (spoiler: he won, and led the country into ruin and war).

                  1. “They told me if I voted for Goldwater we’d end up in a war with Vietnam, and we did.”

                    It’s not a new story.

              2. all I’ve heard about the guy are vague complaints by American and British commentators

                He is openly contemptuous of capitalism and supportive of communist dictatorships – I’m sure Rufus could fill us in.

                1. I had this debate with friends. My side argued that Justin has no political philosophy independent of his father because he’s an empty suit with a name. He’s a lefty by default. The other side of the argument were willing to ‘give him a chance’. Which is ridiculous because Justin has left a trail of evidence lending insights into his world view. Plus he’s a gaffe ball.

                  Just some somewhat related articles from Pravda:

                  http://english.pravda.ru/world…..trudeau-0/

                  http://bit.ly/1Wb8WC6

                  1. Pravda is really trying to talk thin gruel into being a steak entree.

                  2. Harper ran a shitty campaign and should not have been running in the first place. If he had any awareness he would have noticed nobody wanted him around over two years ago and groomed a successor. Anti-Harper sentiment had a lot to do with Trudeau’s victory, maybe even more so than charisma worship.

                    Derp reigns but it never stopped reigning. Harper was a shitty prime minister. At least MJ will get legalized and the F-35 order is getting cancelled.

              3. For a while it looked like Canada was going to set the retard meter at 11 by voting in a New Democratic Party (NDP) government.

        2. God fucking damn the Liberals. Here are some choice excerpts from so-called Good, Reasonable Liberal Paul Martin, giving advice to the Empty Headed Moron:

          “I think there’s going to be an enormous amount done on climate change following the Paris meeting, and I think that for Canada, given our record unfortunately over the last decade, the Prime Minister has to be there. I think he’s got to show that we really do believe that climate change is very much a human problem.”

          “There’s a real recognition, in fact, that austerity is not going to get the world out of the funk in which it now is, and that governments are going to have to play an active role,” Martin said. “So his message is going to be very well-taken.”

          Fuck every bastard in that entire nest of vile shitheads. I can’t believe I voted for that piece of garbage twice, in the guise of Our Lady Of Perpetual MPness.

          1. What a shock, the “reasonableness” of 90s Democrats, Liberals and Labour was pure political expediency rather than a rejection of socialism and statism.

            1. Though to be fair I’ve haven’t heard anything that Blair or Brown are saying lately so they could have actually meant it.

          2. I was listening to Australian weekly news highlights from the last week. The judgment of the interview and some academic interviewee was that it was a good thing Trudeau was elected because AGW. Zero discussion of anything else.

          3. Martin is seen as a finance god. To be fair, when he was Finance Minister the books did get cleaned up but he was an awful, typical fucktard Liberal while PM. Brace yourselves because it shouldn’t surprise anyone what they do about climate change. It’s no secret Harper was despised for having the balls to ignore Kyoto as he rightfully did.

            Pan, yeah, the media’s gushing over Trudeau started from the day Drama Boy entered politics. Actually, it was when he eulogized his father. The media was hooked on their guy.

            1. Media only went Full Retard on Trudeau after Saint Layton died and Mulcair proved to be shaky. Goal was to find someone to get that Harper scalp they’ve been baying after for ten years. It’s just that this election they went full Third World Shit Country, without any pretense to fairness or truth.
              So now we are stuck with at least back-to-back Trudeau governments that will wreck the country, unless he goes full mental and, I dunno, chokes Rick Mercer to death mid-interview (I mean, that’d change my opinion of him, but on-camera murder might be too much).

              1. Ugh. I forgot about the Layton passing. The fawning over the guy was weird. Layton and Trudeau are pretty much indistinguishable in their views.

                It’s funny. A few guys in my hockey pool keep saying they’re willing to wait and see. But I’m not sure what they’re expecting. One guy argued Trudeau will surround himself with good people. One of those people is Martin.

                When I mentioned taxes for those over 200k (because eat the rich. Apparently they don’t carry their weight enough) are going up it was met with silence.

                Out of 12 guys in my pool. I think 6 earn (well) over 200k and another three earn over 100k.

                I don’t think people connect the dots. If you’re wealthy I don’t see how you can ever vote for a Trudeau/Layton type politician. Then again, Outremont (one of Montreal’s wealthiest neighborhoods) keeps voting Mulcair in.

                1. “Layton and Trudeau are pretty much indistinguishable in their views.”

                  I think Trudeau is a lot more empty-headed. He doesn’t even know what to believe he just loves his fuzzy platitudes.

                  The real thing to be afraid of are the people behind him. Summers, Butt. Butt was a senior campaign advisor. He earlier engineered the direction the McGuinty government took ie slowly ruining Ontario with idiotic energy schemes.

                  I’m not sure if Trudeau will get re-elected. Much depends on the course of the economy and if the Tories put a decent candidate. I’m SURE they’ll be smart enough to elect a Romneybot 2.0 as their leader! How can they go wrong?

            2. That’s because progressive liberals love their dynasties…no matter what country they’re in. I’m firmly convinced that liberals in America would happily vote to install Barack Obama as monarch it ever came up on a referendum. I’ve already seen a few saying they can’t wait until Obama’s daughters are of age so they can run for public office.

              The level of stupidity it takes to be a progressive liberal is just mind-boggling.

              1. Holy crap they’ve gone that far huh?

                It’s crazy.

                Just crazy.

              2. ‘…progressive liberals love their dynasties…’
                Which I find to be temperamentally conservative; but then I find what drives a lot of current progressive/leftist thought to be at its core very reactionary and temperamentally conservative.

    2. I have about as much sympathy for him as I do for any other mafioso whose protection racket falls apart.

    3. He wasn’t “getting into business”, he was “getting into rent seeking”. That’s very different.

  9. But his main reaction was frustration that he had to go to the hospital on a weekend, when driving was most profitable.

    Pick-up a fare on the way, man. Always peeps in need of a cab to the hospital. On the way home too!

    too lazy to research so I’ll ask here, how much treatment is involved in kidney stones? I mean, it’s not like he’s starting chemo.

    1. and I dunno if kidney stones counts as “health taking a turn for the worse”. kidney failure, sure. anything totally treatable with a favorable prognosis, not so much.

      I guess what I’m saying is, lrn2heartstrings Epoch Times.

    2. They can be pretty debilitating. I haven’t had it, but it’s knocked a few of my coworkers out of work for several days while they passed them.

      1. I had once. Holy shit did it hurt and the pain doesn’t relent until the thing gets through.

        1. One of my coworkers used to drive a delivery truck. His partner rolled the truck on a route. The crash left him quadriplegic and busted up my coworker pretty good. But passing kidney stones was still more painful, he says.

        2. Yeah, I was pretty much incapacitated for 5-6 hours.

    3. Some pain meds and pre-emptive antibiotics.

      Unless your stones are massive, then you could require some drive through surgery.

  10. I blame Bush

    1. Leave Kate Bush out of this!

      1. Clearly i meant the worst-possible Bush, the one which all thinking people currently recognize as being responsible for sending our society into a terminal stage of decline

        1. Don’t let our days go by, Gilmore.

          (Why the fuck do we have a Kardashian/ Ray J. sex tape that nobody wanted, but Stefani/Rossdale never leaked one? Come on!)

      2. Sadly, the gorgeous Kate has been plumping a bit as the years go on….

  11. a sad and fascinating profile in the Epoch Times

    But what does this have to do with the evils of the Chinese Communist Party?

    But when China joined the World Trade Organization in 2001, the Indian economy could not compete with China’s cheap manufactured goods.

    There it is — I’m actually kind of impressed.

    (FWIW, I kid — actually like the Epoch Times)

    1. I too was wondering what the China angle was. Thanks for RTFA.

    2. I’d never noticed them before

      http://www.theepochtimes.com/n…..h-is-here/

      interesting.

      A small quibble with this

      “A human being’s fundamental right is the right to be heard

      Not quite right. There’s a right to speech. There’s no ‘right’ that guarantees anyone has to listen.

      Although i’d grant that there’s a lot of current grey area in the margins which totalitarians are looking into to find ways to “allow people to speak… but prevent people from hearing them”

      1. I only know them from the little old Chinese ladies that sell it on the street around here.

      2. But. But. But.

        What good is a right if you can’t force other people to cater to it?

  12. So I’m supposed to feel sorry for a late-to-the-party, also-ran rent-seeker who had the dumb luck to show up to the ball just as the punch bowl was being taken away?

    Feck him, and feck anyone who feels sorry for him.

    How about feeling sorry for the thousands of passengers who had to pay higher fares to this guy and his ilk for decades?

    And how about feeling sorry for all the taxpayers who perpetually foot the bill for all the “entrepreneurs” who default on SBA loans every year — not to mention student loans, and FHA mortgages, and…

    Doesn’t anyone at Reason read Bastiat anymore?

    1. I see this in subsidized daycare in Quebec. If the province were to remove the subsidy a LOT of people would lose their business and/or homes.

      My business is not subsidy dependent and I survive on my own thank you merci very much.

      Subsidies is like a shot of heroin to an economy.

      1. Quebec has started drawing those subsidies down I’ve heard.

        1. Yes, they have. $7 a day actually cost (depending on the study) anywhere between $90 and $105 a day.

          If we go with the lower of those estimated ($90) that’s an $83 difference taxpayers have to come up with. Which is basically the going rate across the continent; more or less.

          So remind me why the government involved itself in this again?

          What a mess.

    2. Yes, thank you. and how absurd is it that someone whose job it is to drive people around can even get within shouting distance of anything that costs half a million dollars?

  13. Easy solution: ban Uber.

    1. Workin’ on it.

      /every city everywhere

  14. Sympathy: a word in the dictionary between shit and syphilis.

  15. Mentioned earlier but I wish I could trade a medallion for a house.

  16. I wonder when the Epoch Times is going to do a story on a coal worker who lost his job do to the Light Bringer’s policies. You know, to put a human face on the story…

  17. And now for something really maddening. Bacon and sausage just as bad as cigarettes regarding cancer!

    http://yhoo.it/1OOezlD

    Now all we need is some psycho nanny starting a ban bacon campaign not unlike we saw with cigarettes. We would never tell people what to do!

    Yet it always ends up that way.

    1. (WARNING: SOME WEIRD AUTOPLAY BULLSHIT)

      I’ll still be able to eat bacon in my own home, right?

      1. You’re safe.

        For now…

      2. NO! You can only eat it outside. Second-hand bacon smell confined in the house can irreparably harm others. Think of the children!

    2. “Now all we need is some psycho nanny starting a ban bacon campaign”

      Yeah, that’s not gonna work.

    3. I love how no one anywhere includes an actual risk factor.

      If going bacon-less for a lifetime reduces cancer chances by 1%, then nobody gives a shit.

      Come to think of it, pretty much anything short of instant death is still not going to stop me from eating bacon.

  18. Sounds like we need a medallion bailout.

    1. Of course! Think of all the jobs it creates when geniuses like that can burn another $500000.

  19. I’m… confused… is this Uber’s fault or not?

    1. It depends. Do they have deep pockets?

      /plaintiffs’ bar

    2. Re: Diane Reynonlds,

      It’s Capitalism’s fault – everybody knows that.

  20. Don’t ever get involved with the Medallion Cartel.

  21. Soooooooo – if Uber driving is so profitable, why don’t these two guy sign up and start driving for Uber? Just because you have a medallion doesn’t mean you *have* to drive a yellow cab.

    Pay the house mortgage, let the bank re-possess the medallion – re-fi the house if you have to – and carry on.

  22. “When Singh purchased his medallion in 2008 for $450,000, the world became his “oyster,” he told Pang. The medallion’s value soared.”

    How much does a car cost? What is the price of gas now?
    If you paid half a million for a driver’s license then you are an idiot who is going to lose all of your money.

    Boo-fuckin’-hoo.

    1. Don’t forget to blame the city – the pusher – as well as the addict – the medallion holder.

      1. Don’t forget to blame the predatory lender who made him take a half million dollar loan.

    2. He’s actually in a good position compared to medallion owners who have 1005 equity.

      What’s the worst case he’s facing? Repossesion of the medallion. Which is losing its value daily anyway. And then he goes and drives for himself through Uber.

    3. First of all, a medallion isn’t a “driver’s license.” It’s a *permanent* right to operate a taxicab in NYC in perpetuity, and quite literally constitutes property. Prior to Uber’s entry into the market, medallions were an asset that could be readily traded and sold (and, in this case, used as home collateral). At the market’s peak in 2012, his asset had appreciated by over 250%; at that point the going rate for medallions was $1.2 million.

      Where he and every other medallion owner fucked up was in failing to unload them the *instant* it became clear that ride-hailing was going to fundamentally alter the for-hire transportation market, and in the process put most traditional taxis out of business. In each of Uber’s original markets (NYC, SF and L.A.), this proposition should have been obvious by early 2013, or at least obvious to anyone paying attention and not in denial.

      Further, they also fucked up in not recognizing that medallions were unambiguously experiencing a pricing bubble, one largely similar in ways to the mortgage bubble. Even assuming a hypothetical that Uber and ride-hail apps didn’t exist, bubbles ALWAYS pop at some point. In the case of medallions, it could’ve easily happened if NYC merely decided to enter the 21st century like most of the rest of the country and abolish the patently unfair medallion system for good. (There’s a *reason* every U.S. city, save for NYC, Chicago and Boston, now sells annual taxi permits instead of medallions.)

  23. What’s the return on investment for the half million? Did that guy say he was scraping 30k a year on his medallion? That can’t be. Nobody is stupid enough to bury that much AND work that much for not even 7%? I’m not a math guy, maybe I’m wrong.

    1. I kind of wondered on that myself. Even without uber, how the hell is half a million a good investment to be a cab driver even with jacked up rates?

      I guess that you can use it to buy a house is a perk and the only way it sort of makes economic sense.

      1. Presumably it’s like buying a sports franchise – the real profit comes when you re-sell it.

    2. He probably assumed that the city would continue to restrict the number of medallions even as the population continues to rise to unprecedented levels. The return on investment comes 20 years later when he sells it to someone else for 3x what he paid.

      1. So he basically invested in a medallion bubble.

    3. But he wasn’t working. He just hired a driver, paid the driver $30k, and took home another $30k for no work. And until Uber, this was basically a risk-free 6% ROI. That’s, in fact, an excellent deal.

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  25. Uber is a great idea, but as an Uber driver, their one size fits all anti-tipping campaign kills profits in places where longer distances to pick up fares are the norm. Tip your Uber driver goddamn it! It’s still cheaper than a cab you fuckin cheap bastards!

    1. Fuck you and your tipping. Just shut the hell up and drive. You want more money to drive me somewhere – then raise your upfront price, don’t try to guilt me into paying you more.

    2. Tip your Uber driver goddamn it!

      I give you one star. Hopefully, enough other people will pick up on your attitude in the next couple of days, and Uber customers won’t have to deal with you.

      -jcr

    3. Uber cars are generally not a lot cheaper than taxis. People use Uber because of the convenience.

      One of the reasons people like them is because they don’t have to deal with cash or money, or have to worry about tips.

      You tip people who are employed by others and/or whose fairly low rates factor in the need for tipping. Neither is true for Uber. In fact, Uber drivers take home a larger portion of their fares than taxi drivers; the difference more than makes up for the lack of tips.

    4. Miss Manners on tipping: http://tinyurl.com/7sltzpw

      Owners aren’t supposed to be tipped, although they are only too eager nowadays to encourage their clients to do so.

      As an Uber driver, you are an owner, not an employee.

  26. No sympathy for anyone who bought into a restraint-of-trade scheme. Don’t care if it’s taxi medallions or local cable monopolies.

    -jcr

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  28. Industrial strength derp ahead, proceed with caution:

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