New York Cabs and the Foreclosure of Overpriced Medallion

Maybe for those of us who don’t believe in bailouts for big business, and do not live anywhere near New York it may come as a shock that to own a cab in New York. The government issued medallion that is required for a cab company to operate can sell at its annual auction for over $1 million. However, with the recent expansion of Uber and the city’s green cab service competition in the transportation market has reduced the prices cab companies can charge to keep their cars filled with leased drivers as well as how much fairs will cost customers that have more choices than they have previously.

Unfortunately for one cab company mogul, these declined prices have resulted in Citibank to attempt and foreclose on some of those medallions, which Bruce Karatz has been monitoring. What is unclear is what the bank is planning on doing with them once they have ceased them. Since it is unclear whether they can be transferred between owners like real estate. But for Gene Freidman, he is feeling like the big banks which needed a bailout in 2008 to keep the financial system from collapsing. He is rumored to own over 1000 medallions worth close to a billion dollars, and Citibank is threatening to take almost 90 of them for collateral on past owed debt to the bank. It is doubtful, that through any kind of litigation he will be seen as the proverbial Jenga piece that will bring the New York City transportation to a grinding halt without his cab company in service.

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