Taxi and Limousine Services

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 7,800 taxi and limousine services in the US generate revenue by charging fares for transporting passengers between locations or leasing vehicles and medallions/licenses to drivers. Legal taxi and limo companies typically require a license or “medallion” to operate within a city. The cost to acquire a medallion can be high because regulatory organizations limit the number of medallions. Local codes may also regulate fares, vehicle safety, language fluency, and driver competence. Many drivers work as independent contractors and are licensed through or rent vehicles from taxi or limousine companies.

Risk Of Crime

Taxi and limousine service providers may pick up passengers in unsafe neighborhoods, putting drivers and vehicles at risk for crime.

Highly Regulated And Limited

In major cities, the taxi and limousine services industry is highly regulated by municipal commissions and boards.

Industry size & Structure

The average taxi or limousine service works out of a single location, employs about 6-7 workers and generates about $2.8 million annually.

    • The taxi and limousine service industry consists of about 7,800 firms that employ about 51,600 workers and generate about $22 billion annually.
    • The industry is somewhat concentrated; the top 50 companies account for about 67% of industry revenue.
    • The majority of firms operate within a limited geographical market. Large companies include Carey Holdings, Empire CLS Worldwide Chauffeured Services, and Yellow Cab (Chicago).
                                  Industry Forecast
                                  Taxi and Limousine Services Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Coronavirus Update

                                  May 24, 2022 - Mask Mandates Fall Out Of Favor
                                  • Mask mandates are falling out of favor with American public health authorities, and experts say that the bar to bring them back has been raised even as cases of the highly transmissible BA. 2 coronavirus variant increase. “In a time when we have fairly mild variant and a public that’s really mask-averse, it might not be the most important thing to mandate masks,” said Chrissie Juliano of the Big Cities Health Coalition. A new Centers for Disease Control and Prevention framework states that people should wear masks when their communities are considered high risk, but the definition of high risk has shifted to emphasize hospitalizations and the strain on the health-care system, rather than a high volume of cases. Many officials say that mask mandates would probably be tied to cases again under a scenario where a highly contagious variant that evades vaccine protection and causes more severe disease emerges.
                                  • Hawaii, the last US state with a mask mandate in place, allowed the mandate to expire on March 25. Taxi and limousine services are likely to benefit from the expiration of mask mandates. The US Centers for Disease Control and Prevention's latest guidance recommends that people continue to wear masks indoors in communities with high levels of Covid-19. The agency last week said that more than 90% of US residents are now in a location with low or medium Covid-19 community levels.
                                  • Workplace occupancy, an indicator of demand for taxi and limousine service, was 43.2% for the seven-day period ending on May 4, down slightly from 43.4% for the seven-day period ending on April 27 but still up from 40.5% for the seven-day period ending on April 20, according to data gathered from swipes of access control cards in buildings with security systems provided by Kastle Systems. The Austin, TX, metropolitan area had the highest occupancy for the seven-day period ending on May 4 at 60.3%. The San Jose, CA, metropolitan area trailed all others tracked at 33.3%.
                                  • New York City taxis are touting their safety relative to ridesharing services. Taxi services stress that most taxis have a physical barrier between drivers and passengers. Taxi drivers are legally required to wear masks, and vehicles must be regularly sanitized. Some taxi companies are using ultraviolet (UV) light – which has been proven to kill the coronavirus – to sanitize vehicles. The lights are run for several hours while the vehicle is not in service. A similar UV light treatment is being piloted by the subway and bus transit system in New York City.
                                  • The COVID-19 crisis has exacerbated significant challenges faced by New York’s yellow taxi industry. Taxi ridership nearly vanished during New York City’s lockdown. Traditionally, yellow cabs thrived on a monopoly of hail pick-ups below 96th Street in Manhattan, but as the area’s tourists, business people, and theatergoers disappeared, so too did the demand for rides. Even before the pandemic, many yellow cab drivers were upside down on the value of their medallions. The price of a medallion has fallen from $1 million only a few years ago to as little as $75,000, leaving many drivers deeply in debt and holding a depreciating asset. In early November, New York City struck a deal with cab drivers and private equity firm MarbleGate, which owns nearly a third of the city’s taxi medallions. The deal will reset medallion loans to $170,000, down from an average of about $500,000. The deal also caps monthly payments at $1,122, down from as high as $3,000 for some drivers. New York City will also guarantee the loans for indebted cab drivers who own five or fewer medallions.
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