Chicago taxi fleet operators are worried that a detail in Mayor Rahm Emanuel’s budget proposal could drastically hurt their businesses. Emanuel seeks to close a $298 million budget gap for fiscal year 2013, in part by raising $14 million through the sale or lease of taxi medallions. Medallions are small, metal plates issued by the city that every cab must display to show that they are licensed.
“As long as they sell them for what they’re going for in the market, then that’s not such a bad thing,” said Baxter Swilley, a lobbyist for the Chicago Taxi Operators Association. “But if they’re being sold at a lower value, then that’s a problem.”
According to Emanuel’s press office, the city expects to auction between 50 and 100 medallions to meet the revenue goal. “My concern is, if they are going to get that amount of revenue for that many medallions, then they may be selling them to low market value,” said Swilley, “which would have an impact on the value of the medallion.”
Last month medallions sold for $345,000 apiece. Under Emanuel’s proposal, prices could well be lower. Swilley said a large auction could devalue the investment that fleet operators made when they purchased their medallions at higher prices.
It could, however, be a boon to independent entrepreneurs who have been priced out of Chicago’s medallion market for several years. A spokesman from Emanuel’s press office said the city hopes that half the medallions will be sold to operators of wheelchair accessible vehicles. The city hopes to auction the medallions in the fall of 2013.
Previous post in Economy