Trump risks a repeat of the ’80s with housing cuts
Caleb Watney for the R Street Institute: It seems like nearly every time ridesharing is brought up in New York City, someone will inevitably bring up the dramatic decline in taxi medallion prices. Dubbed the “Uber effect” by American Enterprise Institute scholar Mark Perry, the theory is that increased competition from companies such as Uber and Lyft has eroded the legal monopoly that taxi medallion holders previously exerted in the on-demand automobile transport market.
By competing against this once-isolated market, transportation network companies such as Uber and Lyft have made these medallions significantly less valuable. One proxy for the decline can be found in share prices of Medallion Financial Corp., a publicly traded consumer and commercial lending firm that is a major creditor in the taxi medallion lending business. When looking at the period from 2013 to 2016, the decline certainly looks precipitous …
That may not be the complete story, however. After all, the stock price may vary depending both on the specific quality of loans the company issues, its underlying cost of capital and on general market confidence. Furthermore, the stock price doesn’t make any distinction across the numerous categories of medallion ownership.
