If you’ve ever wanted to own a cab in Chicago, now’s your chance.
But it’ll cost at least $360,000.
That’s the starting price for each of the 50 taxi medallions the City of Chicago will begin auctioning off starting Monday. Medallions are the circular metal licenses that must be bolted to the hood of taxi in order for it to operate legally in Chicago.
There are currently about 6,800 medallions in the city, with about 6,500 of those currently on the road, said Rosemary Krimbel, Chicago’s commissioner of Business Affairs and Consumer Protection, the city department that regulates the cab industry.
The city isn’t increasing the total number of medallions in circulation, Krimbel said, but re-auctioning licenses that had been confiscated or returned to the city.
“You really don’t wanna have that much sitting there unused,” Krimbel said. “I mean, while the City of Chicago is a government, we also like to keep our eye on the ball when it comes to money.”
The city is hoping to take in at least $18 million from the auction, which ends Oct. 18. Mayor Rahm Emanuel first announced his plan to sell off the medallions as a way to balance this year’s budget.
And according to Krimbel, Chicago is a buyer’s market for taxi medallion investors. The going rate for a Chicago medallion has grown fivefold since 2006, when the average license nabbed $78,509 at auction, Kimbrel said. She attributes the boom, in part, to the Emanuel administration’s efforts to make a greener and newer taxi fleet.
But Chicago’s growing market is also due largely to industry speculators, said Baxter Swilley, who lobbies City Hall on behalf of the Chicago Taxicab Operators Association. In a market where New York City medallions can fetch upwards of a $1 million a pop, Chicago’s prices can seem like a steal to investors looking to buy in bulk, Swilley said.
Swilley said he was happy with the city’s $360,000 opening price, saying it’s just slightly above his estimates.
“For us, as medallion owners, we really are just relieved that...they’re not being sold significantly lower. Fifty medallions out of 6,800 is not gonna have a significant impact on the value of the medallion.”
At the same time, Swilley said a much higher price would have fueled speculation that Chicago’s medallions are overvalued, which he said has prompted a recent sell-off by some companies who fear a taxi medallion bubble.