How TNCs like Uber & Lyft outwitted Taxi Medallions
Before diving into this topic, let me define TNC and taxi medallions.
What is TNC?
TNC is a mobility service provider that helps passengers to book taxis via websites and apps. For example - Uber & Lyft.
What is Taxi Medallion?
Taxi medallion is a license were permitted for a taxicab to operate in the United States. Taxi medallions are used in the major US cities such as New York, Boston, Chicago, Philadelphia, and San Francisco.
Rise of Taxi Medallions
The US government introduced taxi medallions in order to limit the cars where many individual drivers are not been profitable in their living wage.
Taxi medallions have changed the way of early worked motor cars which impacted the streets with less safe due to improper taxi drivers.
If an owner wants to start a taxi company, then the fleets should have the CPNC(Certificate of Public Necessity and Convenience) batch where permitted by the government.
However, a certain amount should be spent to buy the CPNC batch which is often termed as a medallion.
At the same time, the drivers who want to ride the medallion taxi should need to qualify a few checks such as proper driving, license, insurance, and communication.
TNC - the ride-hailing services
TNC(Transportation Network Company) is known as the ride-hailing services that existed to provide taxi services through online booking via websites and mobile apps.
Ride-hailing services like Uber & Lyft are the common examples of TNCs which offer passengers to book taxis via online, unlike medallion cabs.
TNCs was first started to provide transportation in less populated areas where medallion taxis were unable to serve it.
Drivers who join the TNC services would able to earn more rather than drivers who work for the medallions cabs.
Investments for Taxi Medallions and TNC
In the US, Investment required to buy a medallion license was extremely huge. For instance, In 2013, the total value of all medallions and assets for New York City was around $16.6 billion.
For TNC services, fleets are the only investment required by them to run the business. So that owners could lease their vehicles and earn profits without medallion license.
And, this is why many owners lease their fleets to the TNCs and earn profits without hesitations unless medallion rules.
To Concluded with
Being smart among the competition and adapting technology is the right thing for the growth of your business.
If you are reading this, then you could also make use of this opportunity and start creating your own Taxi Booking App.