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June 2008

I would like to begin this month's column by talking about our amazingly successful medallion auction.  I should first mention that this immediate past auction was historic, not only because it set financial records, as have previous sales, but because it is the last sale we have contemplated.  To put this in an historic context, I should point out that only 1,500 new taxicab medallions have been sold in 71 years between the passage of the Haas Act in 1937 and today.  For the record, the Haas Act was a piece of local legislation created by the New York City Council's predecessor body, the Board of Aldermen, that among other things both created the framework for the current medallion system, and limited the universe of medallions.  In other words, while we have had a dozen bid openings and auctions between 1996 and 2008, the sale of new medallions is a rare and exciting thing.  This most recent event is the culmination of only the third time in more than seven decades that the City has been authorized to sell new medallions and create additional service. 

That being the case, I just wanted to share a few numbers, and a few thoughts about this historic time.  First, I think it is interesting to note that there were very few things about these auctions that were predictable or, frankly, that even followed conventional wisdom.  Corporate accessible medallions went for an average price of $618,595 each, which is essentially identical to the April average sale price of corporate unrestricted medallions, $619,000.  However, the average winning bid for independent alternate fuel medallions was $522,000, which was a significant increase over the April average of $433,000 for an independent unrestricted medallion.  The one winning independent accessible medallion went for $413,000, still somewhat less than the average of $435,000 for independent unrestricted medallions, which is consistent with our discounting or lowering of the minimum bidding prices for accessible medallions.

If there is one lesson we can take away from a "by the numbers" exercise about our medallion sales, it is that the strength and vitality of the medallion industry is beyond question.  We have received a total of 2,366 bids for all the types of medallions we have auctioned since beginning this round in April of 2004 - a more than 2 to 1 ratio of interested bidders to available medallions.  Aside from the activity this has spurred in the taxi industry, it has also been quite a busy time for the TLC itself.  In making these 1,050 medallions available, we have planned and held 9 separate bid-opening events, hosted literally dozens of outreach events, workshops and informational seminars, created hundreds of web pages, brochures, informational materials and hours of streamed video, and attended many community meetings and events.  This was a herculean task for our agency, to be sure, but the goal was to communicate the opportunity of ownership to the broadest spectrum of people possible.  I am very proud that we were able to make these medallions available, and that we were able to make so many hundreds of American dreams come true while enhancing service to the public.  Disabled passengers will benefit from 231 wheelchair accessible medallions - now more than any United States city - which will soon be dispatched for service by simply calling 311.  Also, everyone in the city and beyond benefits from the trailblazing medallion owners who purchased the alternative fuel medallions that cleared the path for new fuel efficiency rules for all taxicabs to be greener by 2012, ensuring cleaner air to breathe and significant fuel cost savings for our drivers.  Congratulations to everyone who participated and to all the winners.  This entire process has made our taxicab industry stronger, so basically - everyone wins!

Speaking of keeping the taxi industry strong, I am pleased to learn that some of the key economic indicators that positively impact ridership are trending in the right direction.  While it is sad that so many other industries are experiencing adverse economic impact and job losses, the taxicab - as well as the for-hire vehicle industries - seem very well positioned to weather the storm; even with the ever increasing pain of higher gas prices.  For instance, hotel occupancy and tourism have increased in the past few months, and as compared to those same months last year, as the City continues on its way to meet Mayor Bloomberg's goal of 50 million visitors by 2012.  The hotel occupancy rate in March 2008 was 86.2 percent, up front 85.4 percent in 2007.  Another indicator with a direct correlation to taxicab business is the number of international passengers in NYC airports, which has risen by 13.3 percent when comparing February 2007 to February 2008.  Also, we are seeing an increase in driver license applications, which is up 25% for hack licensees so far this year over last.   

In order to ensure that our industries remain strong and that our professional licensees are fairly treated, it is important to ensure strict enforcement of the rules that give our different industries their identities and assurances of safe service to their passengers.  To this end, and to respond to numerous industry complaints about illegal for-hire activity in Manhattan's Central Business District, I recently announced "Zero Tolerance Days" for our longstanding "Operation Street Hail" - an operation that I started in late 2001.  The TLC's Enforcement Division has been successfully conducting an undercover operation where they pose as passengers, specifically targeting illegal street hail activity perpetrated by for-hire vehicles and unlicensed operators, but which includes any and all observed violations.  This operation also includes undercover officers posing as hotel guests outside hotels where doormen steer business to illegal vehicles and drivers.  I will keep everyone posted on our efforts to protect the public and ensure parity and equal enforcement of the ground-rules for all of our industries.   

Lastly, following closely on the news of two great losses to the TLC and our regulated industries last month, I am once again sorry to say that we have some very sad news to report.  Our good friend and former "Driver of the Year" Nestor Sulpico passed away April 24 of colon cancer at the age of 51.  As you may recall, Nestor found approximately $78,000 in rare Micronesian black pearls in his taxicab and characteristically returned them to their owner without a single thought for himself.  Nestor truly set the bar for his fellow taxi drivers, and for the "Drivers of the Year" that followed him.  He will be sorely missed.

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