San Francisco’s Yellow Cab Expected to File for Bankruptcy Protection According to Reports
Jan 12, 2016
As we have previously posted, Uber has been pushing for expansion in New York state claiming to potentially create up to 13,000 full and part time jobs. New York City, home to the costliest price of a taxi cab medallion, has seen the value of the medallion drop from a 2013 high of just over $1 million to just over $800,000 in 2015 while other cities such as Boston, Chicago and San Francisco have seen the value of taxi medallions stagnate as simply having a car has made anyone a potential taxi operator and their own dispatcher.
San Francisco is seeing the effects of Uber and Lyft (Uber and Lyft are headquartered in San Francisco). Last week, the San Francisco Examiner reported that Yellow Cab, the largest taxi company in San Francisco, is expected to file for bankruptcy protection. Yellow Cab operates somewhere between 500 and 530 of the approximately 1,800 licensed taxi cabs in San Francisco.
The use of “apps” to hail a taxi or “get an Uber” have attracted not only riders but have also attracted drivers to the service from traditional taxi companies. Reports indicate that there are 16,000 Uber drivers in San Francisco while Uber itself claims to have nearly 20,000 drivers which number, as reported in the Examiner, includes drivers who previously worked for companies including Yellow Cab.
During 2015, Uber claimed revenues of nearly $500 million in San Francisco alone, an amount which if true, would be substantially larger than the reported size of the entire taxi market within San Francisco. While Lyft is smaller than Uber and the number of drivers is harder to come by, Lyft does claim to hold 40 percent of the market share in San Francisco.
This reported filing for bankruptcy protection, whenever it may happen, is a harbinger of things to come for other companies that can no longer match, or beat, this new business model. According to published reports, one Uber driver reportedly posted on UberPeople.net: “I have to imagine a lot of taxi companies are in similar situations. Uber is doing to them what Netflix and streaming did to Blockbuster video. It’s inevitable.”
If it is inevitable, any revenues from taxi medallion sales will inevitably disappear.