Taxi Medallions Fetch a Record $600,000 Each

Two city taxi medallions sold for a record $600,000 each this month.

A local fleet operator bought the medallions, Medallion Financial Corp. said in a statement yesterday. The New York-based lender, which financed the sale, declined to name the buyer. The price was 8.3% more than the previous high of $554,148 fetched in a city auction in June 2006.

The medallions — which license owners to operate yellow cabs — are small metal disks affixed to the hood of New York's yellow cabs, the only ones authorized to pick up passengers who hail them on the street. In Manhattan, where only one in four families owns a car, taxis carry about 240 million passengers a year and bring in about $1.5 billion.

"We view this as a positive reaction to the mayor's announcement requiring an all-hybrid fleet," the chief of the city's Taxi & Limousine Commission, Matthew Daus, said. Lower fuel costs from the decision could boost medallion owners' profits by as much as $10,000 a year, he said.

Mayor Bloomberg said last week that he plans to require all new yellow taxis to be hybrids by 2012. Hybrid vehicles cut carbon-dioxide emissions and boost fuel economy by pairing a gasoline or diesel engine with an electric motor, battery pack and brakes that create energy from stopping.

A proposal by the mayor to reduce traffic by charging a toll for cars entering lower Manhattan may have also boosted investors' confidence in the taxi industry, the president of Medallion Financial, Andrew Murstein, said. Under that system, "there will be less traffic, so meters can turn more quickly and that's good for profits," he said.

He declined to name the buyer that paid $600,000 for the medallions.

The price has tripled from $195,000 in 2001, Medallion Financial said. The city has a different licensing process for cabs that people call for pickup.

New York auctioned off 308 medallions in June last year, bringing the number of yellow cabs operating in the city to just under 13,000. In the two years through April, resale prices for the medallions rose 43%, more than the 28% gain for the Dow Jones Industrial Average and the 3.9% increase for 10-year Treasury notes.

Medallion Financial this month reported that first-quarter net income more than doubled to $3.78 million from $1.79 million.