Disruption: Time to Sell Your Medallions?

June 24, 2013 Ryan Horner

At One North, we spend time trying to help clients understand and adapt to the rapidly changing technology landscape and effectively use it to achieve their marketing goals. Some of the key technology building blocks for this new landscape -  including social media, trusted social networks, smart phone adoption, wireless bandwidth capacity/reliability and application components, like Google maps - are shaking up other established industries at their core.

Last month, the Lyft car service launched in Chicago. Lyft is a mobile app (for iPhone and Android) that allows users to request a driver and get a ride anywhere by using this recent confluence of technologies.

The Lyft service provides a better experience in virtually every way over traditional taxi service:

  • Cost – Lyft pegs its price as 30% less than a comparable taxi ride. And as a bonus, there is no per-rider add-on fee.
  • Feedback/Reviews – Because you access the service through your Facebook account, you are carrying your online persona, and every rider and driver receives a star ranking on each ride to tell users on both sides whether the other is a good participant. For taxis, it’s a complete unknown – which doesn't incent the best behavior.
  • Cleanliness – All the Lyft cars are clean and owned by the driver. If one is not, then the feedback/review loop will tell you so. I think we've all been in taxis that were in pretty poor condition.
  • Timely/Status Updates – You can view the real-time GPS location of each Lyft car before requesting a ride and then continue to follow your driver after your request. No more calling less than enthusiastic or helpful taxi dispatches that may or may not be able to get a taxi to your location when needed.
  • Payment – When the ride is over, you just say thanks and get out the car - no slow cash courting or disgruntled sounds when asking about credit card usage or large bills. The Lyft app notifies you of the fee, your ability to add an additional tip and rank the driver (all to be completed within 24 hours).

If the security of hopping in car with a stranger is a concern, consider that this is exactly what you are doing in a taxi. Except, in a taxi, there is no log or recording of your doing so, and the taxi driver is forced to drive many more hours to make the same money (thus, is commonly sleep deprived...at least anecdotally).

It would be surprising if the entrenched monopoly of the taxi medallion system wouldn't try to stop the upstarts like Lyft, especially since they offer such a better experience. So, that could delay continued growth in the short term, but, ultimately, the technology will force them to adapt/innovate, or fade away.

It feels like it’s just the tipping point for transportation now, with this emergent set of technology capabilities. But this model is spreading to other industries as well. Here are a number of other companies using the social web and other emerging technologies to disrupt their industries:


  • airbnb: Provides a platform for individuals to rent out their home or reserve someone else's and includes a similar rating system, through which renters can provide feedback on hosts and vice versa.


  • Kickstarter: Allows crowd sourced micro-funding for creative projects, including over $5 million for the new Veronica Mars movie.
  • LendingClub: Allows its members to directly invest in and borrow from each other, passing along the savings accumulated by avoiding the banking system.


  • Coursera: Provides easy access to share and consume classes for top universities.
  • Udacity: Born out of a Stanford University experiment, Udacity offers accessible, affordable and engaging higher education to the world.


  • ClubLocal: Plumber, electrician or handyman - choose your service and set costs, provide a location and be given a 2 hour timemframe for the first available qualified representative.
  • TaskTabbit: Helps you find trustworthy people to clean your home, deliver your groceries or even build IKEA furniture for you.


And of course, we see it happening in Marketing Technology as well. Although there is a large risk to established players who don’t innovate and adapt, it ultimately is an opportunity to reach a broader audience more effectively and be more competitive.

The point is about the disruption of long-established industries happening so quickly as a result of emergent technologies, but if you’re interested in deeper economic analysis of the impact on the medallion system, this is a great read. And, as it’s always best to see both sides of a topic to fully understand it, check out this alternative perspective.

Also, if you think this doesn't apply to you, would you have thought the same thing if you read a post in 2004 about college students at Harvard and Stanford sharing their photos and status online?


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Ryan Horner Managing Director, Technology

As Managing Director of Technology, Ryan is responsible for overseeing One North’s strategy related to technical applications, systems and client implementations. He got his start at age seven, programming an Apple IIe.

  • Last thing you geeked-out about: This happens on a daily basis, oftentimes to the internet of things coming to life and novel uses of the technology-enabled sharing economy – or some combination of the two.
  • Most unusual job: I grew up on a working farm, so I've had lots of unusual jobs: baling straw, sweeping bins, cleaning a cattle barn, etc. 

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