Metro Medallion Madness: A Story of Fraud and Innovation

By Samuel Reich

                Taxi medallions were introduced in New York City (NYC) by the City Council in 1937 by passing the Haas Act.[1] This was done to combat the overabundance of taxis crowding New York City’s streets and to provide better wages for the drivers.[2] City officials charged fees on a yearly basis for renewal, and more medallions were added slowly over time while gaining revenue for the City.[3] The Taxi & Limousine Commission was created in 1971 to regulate the medallion industry which included regulating brokers who advised clients on selling and buying medallions along with leasing them.[4]

Uber and other ride share apps started operating in NYC around 2012.[5] This undid the goal of the Haas Act by creating more crowded streets and making it harder for cabbies to earn fair wages.[6] These apps have the ability to lose money for years in order to grow dominance in an industry, and then push out their competitors before people know what happened with sudden higher prices.[7] The medallion sales in NYC have been on a rollercoaster ride with prices going up as high as $1.125 million for one in 2012, increasing 500% since 2001, with people thinking this trend would continue.[8] Instead of ensuring the value of the medallions was real and to be a good investment for the owners, the Taxi & Limousine Commission auctioned off hundreds more medallions bringing in $359 million for the city.[9] No, officials did not do their due diligence and investigate into the market conditions thoroughly before deciding to sell more. As a result of the Commission looking the other way to the fraud of sales inflating the prices of medallions by brokers, these ride-sharing platforms like Uber were allowed in and broke the medallion bubble that had been propped up by brokers for decades.[10] This has left taxi medallion owners with more debt than they can ever pay back with the average price as low as $160,000.[11] Many of these drivers are immigrants following their predecessors is the hopes of working for a better life for themselves and their families.[12] Regulation by the city was extremely lacking while they focused more on making money for the city than protecting one of its most important and iconic resources.[13] This is a lesson to be learned before allowing other shared economy innovations or technological changes to be permitted in NYC.

Instead of being protected by the Haas Act, medallion owners have had to deal with these matters on their own as their lives are in chaos including hunger strikes, and worse, suicides.[14] These people are in more debt to the brokers than the medallions are currently worth.[15] Predatory lending by brokers along with the haphazard introduction of ride share apps were decisions carelessly made and harmed people that the City has relied on every day for years without the proper assessment they deserved.[16] Now, Uber is planning on buying out the remaining medallions that are in circulation, but this takes away benefits and higher wages that the drivers had.[17] Municipalities and States must take more action to protect industries that have served the community for decades, especially in undervalued roles like drivers or cleaners.

[1] Taxi Medallion Task Force, Report of the Taxi Medallion Task Force, 9 (2020),

[2] Id.

[3] Id.

[4] Id.

[5] Id. at 11.

[6] Daniel Kowalski, How Cronyism Created New York City’s Taxi Medallion Bubble, Intellectual Takeout (Oct. 8, 2019),

[7] Paris Marx, Uber is Not Price Competitive with Transit, Radical Urbanist (Jan 5, 2018),

[8] Taxi Medallion Task Force, Report of the Taxi Medallion Task Force, 12 (2020),

[9] Id. at 13.

[10] Kevin Drum, Corruption and Bubbles in New York: How the Taxi Medallion Scam Ruined Thousands, Mother Jones (May 19, 2019),

[11] Taxi Medallion Task Force, Report of the Taxi Medallion Task Force, 14 (2020),

[12] Sakshi Venkatraman and Brahmjot Kaur, ‘I Lost Everything’: Desperate N.Y.C. Taxi Drivers Begin Hunger Strike for Debt Relief, NBC News (Oct. 20, 2021, 3:19 PM),

[13] Drum, supra note 10.

[14] Venkatraman and Kaur, supra note 12.

[15] Id.

[16] Gersh Kuntzman, Komanoff: Times Exposé Understated the Damage to Yellow Cab Industry by Uber and Lyft, STREETSBLOGNYC (May 30, 2019),

[17] Theo Wayt, Uber planning to add all NYC taxis to its app in surprise shift, N.Y. Post (Mar. 24, 2022, 8:54 AM),