From my perch, it appears to be a compelling time to buy SBNY. No position yet.
As a Chicagoan, Uber has had an enormous impact on the old school taxi market that is now reflected in the going rate for medallions. The value of medallions in Chicago seems reasonable based on the disruption Uber has caused. So, I like how SBNY has almost completely written those off the books.
The value of medallions in New York at $600,000 may very well be correct for today, but one wonders how much further ride sharing services can erode the value of medallions further. I will say there is a difference using ride sharing in Chicago versus New York although I’m not sure I can explain it well. Maybe it is the sheer number of cars in New York making it difficult to find your specific ride service. Maybe it actually takes human know how to get around New York well versus relying on GPS. I can tell you that I always give direction to my Uber driver, even in Chicago, as they never know the best route.
So, my gut tells me that New York is not quite as ripe for complete disruption by ride sharing services. It is good to see SBNY has written the NYC medallions down to their current going rate or less. Hopefully, those medallions hold their value for the sake of SBNY.
Just rambling about the risk of NYC medallions that still may be lingering, but definitely interested in taking a position in SBNY now. Will keep doing some further reading.
Take care,
A.J.