It’s been awhile since my last post and that’s because I’ve been spending a lot of time crunching numbers. I’ve gotten a lot of Email from taxi drivers in New York, and I will report on everything they’ve said.
But first, I want to address those who are shorting the stocks of the taxi medallion financial industry. There’s nothing wrong with shorting a taxi stock or any other stock. I just ask that if you are going to short a taxi stock (this means you, James Hickman), that you report your information honestly.
Unfortunately, James Hickman is shorting a taxi stock in the taxi medallion financial sector and not reporting information honestly. I want to compare what he says about those hacks working in the NY taxi medallion financial industry against what the truth is. After all, this column is called Taxi Truths.
Here is what James Hickman said about the average NY hack—
People that don’t know about the taxi medallion financial industry would look at this chart and think that hacks must be really struggling. James Hickman is not presenting the real story, though.
He starts with a number that he could not possibly know to be correct because he is not a hack (well, a cabbie, anyway). Here is what he did to come up with the wrong number of $266.
He made a FOIL request from the TLC, asking for the average daily farebox for the period of April 2014 to March of 2015. The TLC reported about $7, 240,000, which includes credit card tips.
James Hickman then divided by the number of yellow cab medallions (13,605), to reach $532, and then divided by two to get $266 in gross income per shift.
Except James Hickman, who has already been caught being dishonest about who he is (check out this link), isn’t telling readers the whole story.
The TLC also gave him a second number, which included an estimate of cash tips in addition to credit card tips. That number was probably about $7,750,000. Now, if we divided by 13,605 and then by 2, we’d end with $285 per shift.
That doesn’t seem like much improvement, although it would boost the hourly rate claim by James Hickman to $15.27 per hour.
There is a major bad assumption being made here, though. Can you spot it?
James Hickman is averaging the daily farebox across all 13,605 medallions. Yet there is no data regarding how many of the 5,500 individually owned medallions are actually out and driving on any given shift. The City’s “Owner Must Drive” rules have been significantly loosened since 2011.
The math changes that hourly rate a lot if even 10% of cabs aren’t being driven every single shift of every single day. Suddenly, the hourly rate is $18.21.
What if 13% of the cabs aren’t being driven? The hourly rate spikes to $19.72.
Do you know what is special about that number? It is just about the hourly rate I made as a hack all the years that I’ve been driving. Not only that, when you multiple it out to an annual figure, you get about $60,000, which is what I’ve made most every year, what my peers have made most every year, what most lenders will tell is the average hack’s salary is, and what the TLC will tell you, as well.
So, to Mr. James Hickman, the man who is shorting the taxi medallion financial industry, tell the truth. If you don’t know the truth, please do not rely on an number that doesn’t represent the truth.