The Washington Post has a pair of interesting articles on taxi medallions. The first article claims that taxi medallions have been the “best investment in America for years”:

In New York, taxi medallions have topped $1 million. In Boston, $700,000. In Philadelphia, $400,000. In Miami, $300,000. Where medallions exist, they have outperformed even the Standard & Poor’s 500-stock index. In Chicago, their value has doubled since 2009.

A medallion is an asset that an entrepreneur or corporation can buy. They then rent out the right to use the medallion, receiving an income while hoping the asset will appreciate, which in the past it always has. Not surprisingly, since they have been such a good investment, there is a whole financial industry that has grown up around them, which is the focus of the second article. There are companies who specialize in lending to taxi medallion investors.

The 23-page market report warns of “financial ruin” for Medallion Financial Corp., a 70-year-old company that has long lent money to drivers and investors in New York, Chicago and Boston looking to buy expensive taxi medallions. The coveted assets give owners the right to operate taxicabs, and for decades they have been the best investment in America, providing a steady business for a company that goes by the ticker symbol TAXI.

But the market report, released to the media on Thursday at a time when transportation companies Uber and Lyft are threatening established taxi markets across the globe, predicts a much darker future. “Medallion Financial,” it reads, “has left itself and its shareholders exposed to an economic reckoning rarely observed in free-market economies – the collapse of an asset class propped up by decades of government-sponsored, monopolistic entry barriers with the sudden, unconstrained introduction of new supply.”

So it’s very clear why the owners of these assets are fighting for government regulation to outlaw use of the new technologies that might provide better service and better value. They might hold back the tide for awhile, but technology and consumer expectations will continue to evolve, and ultimately history is not likely to be on their side.