What you need to know before you start
A New York City taxi license—officially called a medallion—is a permit that lets you legally operate a yellow cab in the five boroughs. The city issues a fixed number of medallions, and you must own one to drive a yellow taxi for hire. The process involves meeting specific requirements, passing tests, and going through the Taxi and Limousine Commission (TLC), which is the city agency that oversees all for-hire vehicles.
The path to getting a medallion has changed significantly over the years. Currently, the TLC runs a medallion lottery system that opens periodically, and there is also a secondary market where existing medallion owners sell to new drivers. Both routes have different costs, timelines, and requirements. Understanding which route fits your situation—and whether you meet the basic requirements—is the first step.
Key Takeaways
- You must be at least 19 years old, have a valid driver's license, and pass a background check and drug test to hold a medallion.
- The TLC runs a medallion lottery periodically, which is the most affordable way to get a medallion, though you cannot control when applications open.
- You can also buy a medallion from an existing owner on the secondary market, but medallion prices have ranged widely depending on market conditions.
- Once you own a medallion, you must complete TLC driver training, pass a written exam, and get a TLC license before you can pick up passengers.
- You will need to arrange financing, insurance, and a vehicle that meets TLC standards before you start driving.
Basic requirements to hold a medallion
Before you can own a medallion, the TLC requires you to meet several baseline conditions. You must be at least 19 years old, have a valid New York State driver's license (or be able to get one), and have a Social Security number or Individual Taxpayer Identification Number. The TLC will run a background check and a drug screening, and you cannot have certain criminal convictions on your record. The specific crimes that disqualify you are listed on the TLC website, but they generally include felonies involving violence, drugs, or dishonesty.
You also need to demonstrate that you can legally work in the United States. If you are not a U.S. citizen, you will need to show proof of work authorization. The TLC does not require you to own the vehicle outright—many drivers finance or lease their cabs—but you do need to show you can afford the medallion and the ongoing costs of operating a taxi.
The TLC medallion lottery system
The TLC periodically opens a lottery for new medallion owners. This is typically the most affordable route, though the exact cost and timeline depend on when the lottery runs. When the lottery opens, you submit an process during the open window, and the TLC draws winners randomly. If you are selected, you then move forward with the rest of the process: background check, drug test, training, and exam.
The lottery is not always open. The TLC announces when applications will be accepted, usually through its official website and local news. You cannot explore outside the open window. If you miss a lottery cycle, you will need to wait for the next one to open, which could be months or years away. To stay informed, you can check the TLC website regularly or contact the TLC directly at 311 (the city's general information line) to ask when the next lottery is expected.
Winning the lottery does not may provide you a medallion—it means you move to the next stage of the process. You still must pass the background check, drug test, training, and written exam. If you fail any of these steps, you lose your spot.
Buying a medallion on the secondary market
If you do not want to wait for a lottery, you can buy a medallion from an existing owner. This happens on the secondary market, where medallion owners list their permits for sale. The price varies based on market demand, the condition of the vehicle, and other factors. Historically, medallion prices in New York City have ranged from tens of thousands to hundreds of thousands of dollars, but prices have fluctuated significantly in recent years.
When you buy a medallion from an owner, you become responsible for the medallion transfer process with the TLC. You will still need to pass the background check, drug test, training, and exam. The seller cannot transfer the medallion to you until you have completed these steps and received your TLC license. You will also need to arrange financing if you cannot pay the full purchase price upfront. Some banks and lenders specialize in medallion financing, though terms and interest rates vary.
One advantage of the secondary market is that you can often buy a vehicle along with the medallion, which saves you from having to find and outfit a separate cab. However, you should have the vehicle inspected before you commit to the purchase, because you will be responsible for any repairs or maintenance once you own it.
Training, testing, and getting your TLC license
Once you own or are awarded a medallion, you must complete a TLC-approved driver training course. This course covers taxi regulations, passenger safety, customer service, and navigation. The course typically takes several days and costs a few hundred dollars. The TLC maintains a list of approved training providers on its website.
After you finish training, you take a written exam administered by the TLC. The exam tests your knowledge of taxi rules, traffic laws, and the geography of New York City. You must pass this exam to receive your TLC license. If you fail, you can retake it, but there may be a waiting period between attempts.
Once you pass the exam, the TLC issues you a TLC driver's license, which is separate from your regular New York State driver's license. This TLC license is what allows you to legally pick up passengers in a yellow cab. The license is valid for a set period (the duration varies), and you will need to renew it periodically.
Vehicle requirements and insurance
Your taxi must meet specific TLC standards. The vehicle must be a four-door sedan approved by the TLC, and it must be in good mechanical condition. The TLC publishes a list of approved vehicle models, which changes periodically. Common approved models have included the Toyota Camry, Nissan Altima, and Ford Fusion, but you should check the current list on the TLC website before you buy.
Your vehicle must pass a TLC inspection before you can start driving. The inspection checks the mechanical condition, safety features, and cleanliness of the cab. You will also need to install a TLC-approved meter and a roof light. These devices are not cheap, and you should budget for their cost when you plan your finances.
You are required to carry commercial auto insurance that covers taxi operations. Regular personal auto insurance does not cover for-hire driving, so you will need a separate commercial policy. Insurance costs vary by provider and your driving history, but you should expect to pay several thousand dollars per year. Some medallion owners lease their vehicles to drivers rather than driving themselves, which changes the insurance arrangement.
Financing and ongoing costs
Most new medallion owners need to finance the medallion itself, the vehicle, and the equipment. If you are buying on the secondary market, the medallion alone can be a substantial expense. Some lenders specialize in taxi financing, and you can also explore traditional bank loans or lines of credit. Your personal credit score, income, and down payment will affect whether you can get financing and what interest rate you will pay.
Beyond the upfront costs, you will have ongoing expenses: fuel, maintenance, insurance, TLC license renewal fees, and vehicle registration. You may also need to pay for parking or garage space, depending on where you operate. Many drivers work as independent contractors and keep a portion of their fares, while others lease their medallions and vehicles to larger taxi companies. The arrangement you choose affects your income and expenses.
Before you commit to getting a medallion, create a detailed budget that includes all these costs and realistic fare income. Many taxi drivers find that the first year or two involves significant financial pressure as they pay down debt and build up a customer base.
Frequently Asked Questions
Do I need to live in New York City to get a medallion?
No, but you must be able to show that you can legally work in the United States and meet all other TLC requirements. You do not need to be a New York resident, though you will need a valid address where the TLC can reach you.
What happens if I fail the TLC written exam?
You can retake the exam, but there is typically a waiting period between attempts—usually at least a few weeks. The TLC will tell you the specific timeline when you receive your test results. You can study using TLC-approved study materials and retake the training course if you want additional preparation.
Can I sell my medallion after I get it?
Yes. Once you own a medallion, you can sell it to another person who meets TLC requirements. The buyer will need to go through the same background check, training, and exam process before they can take over the medallion. The sale price is negotiated between you and the buyer.
How long does the whole process take from start to finish?
If you win a lottery, the process typically takes several months from process to receiving your TLC license. If you buy on the secondary market, it depends on how quickly you can arrange financing and complete the training and exam. Most drivers report the entire process takes three to six months once they own or are awarded a medallion.
What if I have a criminal record?
Certain criminal convictions disqualify you from holding a medallion. The TLC maintains a specific list of crimes that are permanent bars. If you have a conviction, you can contact the TLC to ask whether it affects your may be able to access, but you should not assume you are disqualified without checking the official list.