2 Medallions Fetch $712,101 as Taxi Auction Sets Records
A rare city auction of taxi medallions drew record prices yesterday as fleet owners, drivers and even a Verizon telephone worker vied for the aluminum shields that confer the right to operate a yellow cab.
The auction, and another to follow, are part of the city's plan to sell 900 new medallions over the next three years, the largest expansion of the fleet since the Depression. Yesterday's sealed-bid auction was for 174 corporate medallions, which can be bought only in lots of two and must be used 24 hours a day. A separate auction for 126 individual medallions, which, unlike corporate medallions, must be used for cabs driven by their owners, will be held on Friday.
Bidders had until Thursday to submit their bids, and Taxi and Limousine Commission officials began opening them just after 10 a.m., before a small crowd in an auditorium at the New School in Manhattan. Each bid was read aloud and then posted on a large screen. Just after noon, incredulous whistles filled the auditorium as the taxi commissioner, Matthew W. Daus, read a bid for $712,101, the highest price ever for a pair of corporate medallions.
"That is a record, folks," Mr. Daus told the small crowd.
In the end, the lowest winning bid for a pair of medallions yesterday was $681,100.99. In comparison, at the end of March, a pair of corporate medallions was going for only $560,000 on the open market.
Although deep-pocketed fleet owners typically dominate the market for corporate medallions, even veteran observers of the industry were stunned by the prices.
"No way did I ever think the price of a corporate medallion would get to this price," said David Pollack, executive director of the Committee for Taxi Safety, an organization that represents taxi leasing agents.
The city had been planning to receive $65 million for its budget from the two auctions, based on old prices for the medallions, Mr. Daus said. But yesterday's auction alone could produce more than $60 million.
Many drivers who had hoped to become mini-fleet owners found themselves left far behind. "These guys are big fish," said Harrinder Singh, 32, who put in a bid of $655,117 but knew he had lost before even half of the 400 bids were read.
Even some of the industry's major players found themselves priced out. Medallion Financial Corporation, a major lender to aspiring owners, joined with 20 fleets to bid on 100 medallions. The fleets would lease the medallions, but Medallion Financial would get the profit on the medallions when they were sold. In the end, though, Medallion Financial landed only 28 medallions.
"They went for more than we were expecting," said Andrew Murstein, the company's president, who said that he was still satisfied.
Perhaps the day's most unlikely winner was Konstantinos Megos, a divorced father of two who works as a fiber optics technician for Verizon Communications. He decided to take part in the auction after reading about it in the newspaper, bidding $690,016. He said he planned to let a taxi fleet lease out his medallions in return for a fee, and sell them in 20 years to send his two young sons through college.
"I'm glad for my boys," he said.
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