What is a taxi medallion?

In many U.S. cities, a local authority limits the supply of taxis, which is often done by excluding anyone who does not own a medallion (a piece of "tin" affixed prominently on the car). A taxicab medallion is therefore a type of property that allows the owner to operate a cab, at the exclusion of others. For example, in Manhattan only yellow cabs with medallions can pick up passengers by street hail (those without medallions must pre-arrange pick-up). The debate over artificially restricting the supply of taxicabs is a problem often discussed in Econ 101 courses.

Depending on a number of factors including supply, local fares, interest rates and regulation, medallions can be very valuable. As Andy Ninja mentioned, New York prices were about $155,000 for Individual Medallions and $220,000 for Fleet Medallions in 2004. In March 2010, prices were about $589,000 and $781,000, respectively (in New York Individual Medallions must be driven 210 9-hour shifts before being leased to other drivers while the owner of a Fleet (or Corporate) medallion is not required to personally drive the cab). Due to the price of medallions, they are often not owned by the drivers themselves, but are instead leased.

- In New York there are 8,361 Corporate Medallions & 4,876 Individual Medallions
- In Chicago there are 6,951 Medallions (currently worth about $185,000)
- In Boston there are 1,825 Medallions (currently worth about $385,000)

- Other major medallion cities include Newark, Philadelphia, Miami-Dade and Los Angeles.

Owners of taxi medallions will often finance a portion of the purchase price with debt. Medallion Financial (NASDAQ:TAXI) is the most prominent taxi medallion lender, securing its loans against the medallion, and often taxicab, equipment and personal guarantees.

Taxi medallions are also often bought and sold through brokers and are sometimes managed on behalf of investors by professional agents and fleets.

For more information see:

http://www.schallerconsult.com/taxi/taxifb.pdf (New York City Taxicab Fact Book - loaded with facts and surveys); and

www.fareinvestor.com (provides current market prices and in-depth information for New York, Chicago and Boston from the perspective of an investor).

Information (including in-depth rules and regulations) can also be found on government websites, such as for the New York Taxi & Limousine Commission.

In the U.S.

THE MEDALLION SYSTEM'S PRIMARY FEATURES
The medallion system dates from a Depression-era city law designed to address an overabundance of taxis that depressed driver earnings and congested city streets. After rejecting the recommendations of a series of mayoral panels studying taxi problems, the city Board of Aldermen in 1937 adopted the Haas Act, which slapped a moratorium on the issuance of any more taxicab licenses. Over the next several years, the number of cabs, which had peaked at 21,000 in 1931, fell from 13,500 in 1937 to the present number of 11,787 because the licenses of taxi owners leaving the industry were not reissued.11

While the vehicle cap is its most famous provision, the Haas Act had other significant and enduring features. It provided for the automatic renewal of vehicle licenses and allowed for the transfer of licenses between owners, conditioned only on City approval of the new owners' qualifications. This transferability provision was vital to the subsequent establishment of license values. The Act also erected a wall between fleet-owned taxi licenses and individually owned licenses, a clause intended to ensure the survival of owner-drivers.

The Haas Act also created a mechanism under which the city could issue additional vehicle licenses after a deliberative administrative process.12 This provision, which some critics of the Act have ignored,13 was never exercised and was removed in a 1971 rewrite of the law. When the City failed to expand the taxi industry despite post-World War II economic growth, taxicab licenses developed a trading value in the open market. After four decades of often-explosive increases, individually-owned licenses now trade at $155,000 and fleet licenses at $220,000 each.

From:
http://www.schallerconsult.com/taxi/taxi2.htm#primary

If this is a US question, I can't be a 100% sure (being a Brit) but if it's the same as a UK Taxi plate, then this is the proof the the vehicle (and diver) have been licensed as a taxi-cab service. To qualify to work as a taxi (or cab), the vehicle not only needs to have a valid MOT and insurance, but also an additional 'safety MOT' to prove its viable as a taxi.This needs to be re-tested and approved regularly (just as a vehicle's MOT is). As a passenger, you know that the taxi you've just stepped into is legal because the successful certificate of license is displayed in the cab. In the UK, this is a small metal 'plate'. I don't know if the US cab actually displays a medal instead, or if that is just the name given to another shaped plate or certificate instead.

Go to www.beataxidriver.com