GOING TO HAIL
Yellow cabbies fight debt, while Uber & Lyft seek profitability
Competition from Uber and Lyft has shattered New York’s yellow taxi business, cratering driver earnings and sending medallion values plummeting, data obtained by the Daily News shows.
The average money brought in by yellow cab medallions dropped by nearly 30% between 2013 and 2018, from roughly $14,500 per month to $10,200.
And fewer medallions are in use today than six years ago.
In mid-April, more than 1,700 medallions were in storage for such reasons as repairs, bankruptcy or an owner’s death, the Taxi and Limousine Commission says. That’s up from just 100 stored medallions at any given time in 2013.
Yellow cabs were making 445,000 trips per day in July 2013 — the last month they were the only type of car allowed to make on-street, hailed pickups. Five years later, they were doing just under 300,000, while Uber and Lyft combined for some 490,000.
“Before Uber I was working five days a week, no more than 10 hours a day,” said Nino Hervias, 60, who has owned a medallion since 1990. “Today I have to work seven days a week, no less than 12 hours a day.”
Many drivers who bought medallions thinking they’d be a great investment are now drowning in debt.
In 2014, dozens of medallions sold for upward of $800,000. Some sold in pairs went for more than $1 million each.
Since the start of 2018, not a single medallion has sold for more than $500,000.
Cabbies who took out loans on their medallions struggle to pay them off. Many must refinance their loans every five years to purchase new cars, a requirement put in place by Mayor David Dinkins in 1992.
Nicolae Hent, 62, bought a medallion in 1990 for $125,000. After years of shifting interest rates and new cars, he expects to be able to pay off his loan in the next five years, at which time he hopes to retire.
But not all drivers are in such good financial shape.
“Everybody who had bought the medallions in 2013 or 2014 — not too many of them will be on the road, because they filed for bankruptcy,” Hent said.
Hent’s friend and fellow cab driver Nicandor Ochisor hanged himself in 2018. Ochisor was one of nine New York City taxi drivers to commit suicide over the past 18 months.
While Uber and Lyft have cut into the taxi cab industry’s bottom line, they’ve also more than doubled the number of ride hails New Yorkers take. Nearly a million Uber and Lyft rides are sold each day, data shows.
Hardly anyone involved in the hailed-ride business is rolling in cash. That goes for people involved in yellow taxis as well as those involved with Uber, Lyft and other e-hail operations.
Uber and Lyft lost money on the bulk of their rides as they slashed rates to control more of the market.
The companies’ reports to the Securities and Exchange Commission — filed in conjunction with their recent initial public offerings — give insight into their strategies.
In its filing, Uber said, “increased competition may prevent us from improving our margins over time or achieving profitability.”
Lyft also said it may never be profitable.
Even while the corporate giants are losing money on rides, their services are not necessarily cheaper than taxis.
“They’re not cheaper in Manhattan, and I’m not even sure they’re cheaper in the boroughs,” transportation consultant Bruce Schaller said of Uber and Lyft. “I think they’ve taken so much of the market share because it’s a better customer experience. It’s a no-hassle experience.”
The city has put in place some regulations recently to curb the impact that Uber and Lyft have had on the city’s streets and the yellow cab industry.
Last summer, the city froze the number of for-hire vehicles permitted in the city. Uber is suing the over that cap.
A surcharge went into effect at the start of February, tacking a $2.75 fee onto appbased rides that go through Manhattan below 96th St. Cabs are being charged $2.50 for entering the same zone with a passenger in tow.
That same month, a minimum-wage law went into effect for app-based drivers, which prompted a failed lawsuit from Lyft.
Those regulations haven’t done much to curb the drop in yellow cab ridership.
TLC data shows medallions did roughly 250,000 trips per day in March, down from 288,000 in March 2018.
As things stand now, taxi ridership may never rebound — and Uber and Lyft may never make enough money to satisfy investors.
“The big question is when do Uber and Lyft investors’ patience wear off?” said Schaller. “The stock prices would suggest sooner rather than later.”