An auction at a Queens hotel in September gave a stark indication of how far the once mighty taxi industry has fallen, as 46 medallions sold for $186,000 apiece, according to two people familiar with the matter. A 6% premium that’s owed to the auction house pushed the price to around $198,000 per medallion, or $9.1 million in total.

Taxi medallion prices topped $1 million in 2013, and reached $965,000 at an auction held by the city in early 2014. They have been falling at an escalating rate ever since Uber and other ride-hail companies entered the NYC market in late 2014. Medallions auctioned for under $200,000 in the mid-1990s. Among the most prolific buyers in the 2000s was Evgeny “Gene” Freidman, who owned the 46 auctioned medallions until they were foreclosed upon by Citibank.

The winning bidder was MGPE, Inc., which had been identified in court papers as the stalking-horse bidder for the sale. MGPE, an out-of-state hedge fund, according to one person familiar with the matter, had set a floor for the auction of $167,000 per medallion.

Hedge funds and private equity firms have been circling the medallion market for months, on the hunt for distressed assets. The September sale marks the first time a hedge fund has taken a position in the industry. A spokeswoman for Maltz Auctions, which conducted the sale, declined to comment.

Freidman, who once managed 800 medallions, filed for Chapter 11 bankruptcy in 2015 to keep Citibank from foreclosing on his holdings. He was ordered to turn over the 46 medallions in 2016 to pay off creditors.

The auction was closed to the press, but one observer described the bidding as proceeding in small increments between two parties. The $186,000-per medallion bid was for all 46 of the placards, which prevented the auction house from accepting one-off bids that would have priced a single medallion north of $200,000, according to two sources.

The winning bidder is expected to lease the medallions to a fleet operator.

            Source: Crain’s New York Business


Article by Black Car News

Black Car News provides breaking news, editorial, and information to drivers, owners, and other key players in the New York City for-hire vehicle industry.

See All Articles