New York taxi medallion prices are plummeting as ride sharing takes off in the city, but the head of the Taxi and Limousine Commission insisted that her industry is not in danger of collapse.
After hitting an all-time high of $1.3 million in April 2013, the price of a taxi medallion has fallen by nearly a quarter of its value to roughly $840,000, according to New York City's TLC. That drop represents a major turning point for yellow cabs—there had never been a price decrease before 2013—and the shift could be tied to the changing nature of transportation in the city.
"We'll see some shifting—I still think the core and the majority of people will still choose hand-hailing, but there is a segment of the population that will definitely rely solely on smartphones to get around," TLC Chairwoman and CEO Meera Joshi CNBC's "Squawk on the Street" on Tuesday.
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The price of yellow taxi medallions is not directly tied to the health of the greater industry, she said, explaining that the number of green, all-borough cab rides has skyrocketed at the same time that Uber has grown.
The average annual inflation-adjusted price of an independent taxi medallion had increased 214 percent between 2004 and 2012, and actually increased "exponentially" since taxi regulation was implemented in 1937, according to TLC's website.
Since the supply of medallions in New York City is constant, the value is derived purely from demand. But even if competition from ride-sharing apps is leading to falling prices, Joshi said she does not anticipate Uber replacing the conventional taxi.
"There is definitely a large hail market," she said. "Uber is an addition to the for-hire industry, and clearly a welcome addition because they're extremely popular and their customer service is well-regarded."
But Joshi said that the rise of ride-sharing services could be an overall boon for New York.
"The city is better off," she said of the business model employed by Uber and its peers. "It's provided a level of competition that I think will increase service for the entire city."
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