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Everyone knows revenue means basically nothing, well it does give some bragging rights or whatever. Profit (or loss) is the number that matters, period.
Its like going on about earning $70k per year, but total take home after taxes/deductions is around $50k, and total nut is about $48k to even $52k, in other words you're busted.
No , everyone does not know revenue is a meaningless number , because it most certainly is not .
..profits can come from cost cutting , not increasing the business .
but once costs bottom out and there is nothing left to cut ,when expenses rise you are in trouble ....revenue increasing means the business is growing,,shrinking revenue means you are losing business .....both are very important and is why all Wall Street reporting includes revenue and profit
If the driver isn't the medallion owner, most medallions are leased, either with the car attached or not. If not, the driver pays the medallion owner a fixed per/day fee and pays everything else himself. If the medallion owner owns the car also, he gets a higher fee, but has to pay for and maintain the car (but not by gas, that's on the driver.)
So the profit calculation changes based on the type of deal. For someone just leasing the tin without the car, revenue is basically net operating income (which doesn't include debt service.)
Quote:
Originally Posted by ironlex
That's revenue, not profit. Subtract cost of car/gas/repairs/insurance/tickets. Also, subtract salary to driver if not driving yourself, and you have your net profit.
Nothing to do with government. Just the opposite. Technology ( Uber,Lyft) radically changed the market. This is the epitome of free market. It would have been government interference if cities or states had stepped in by banning Uber and Lyft to save the taxi industry.
There is always risk...often big risk..in any "investment"
The city didn't regulate the price of medallions or force anyone to buy them. Greedy idiots willingly paid more and more for them over the decades. Nobody forced them to do that. Usually when something gets too expensive people stop buying it and the price then corrects on it's own. When the price of something escalates to the point where it bears no relation to any economic fundamentals it is a bubble.
This was a classic bubble and the sole driver was greed. Idiots bought medallions solely because they thought the price would go up forever , not because it made sense financially.
People have to use their heads. Would you have paid 1M for a taxi medallion ? If yes, based on what logic?
As far as I can tell people should have stopped buying medallions in the 1970's.
Whenever there is a bubble in anything people look for someone else to blame but greed, pure and simple, is always the root cause.
As Cramer says: " Bulls make money and Bears make money but pigs get slaughtered."
Maybe for someone to buy these up and wait for uber and lyft to go down once all drivers wre considered employees
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