Mr. Freidman’s problem is not unlike that of any homeowner who bought real estate in the early part of the century thinking prices could only go up. In New York, medallions, the license that is required to operate a yellow taxi, are fixed in number, and their price rose for decades because of increased demand and restricted supply.
Prices peaked in 2013, not just in New York but also in other large markets like Boston and Chicago. Prices have declined as taxis have faced competition from car service apps like Uber. At the top, the price for New York mini-fleet medallions, which may be owned by nondrivers, was over $1.2 million.
Medallions have typically been financed with debt, but creditors have become skittish because of falling prices. The lack of access to credit has caused medallion sales to slow to a trickle as buyers have faced great difficulty finding financing; this has also made it difficult for medallion owners facing loan maturities to sell.
Brett Berman, a lawyer for Mr. Freidman, issued a six-page letter on Thursday with a warning to creditors, city officials and other “stakeholders” in the taxi industry: “Should you fail to act and permit or contribute to Mr. Freidman’s failure, such action or inaction will have an effect on the medallion industry across the country.”