Finding a cab in New York City at rush hour should get easier soon. In only the second time since NYC cab licenses were first handed out in 1937, the Big Apple has decided to issue 900 new medallions in the next three years. The first round of auctions started last week. But expect to pay more for your cab ride, too -- the city also approved a fare increase of 26%, the first in eight years.

By increasing fares at the same time as selling medallions, the city has assured that it protects the value of the licenses. Like a dividend-yielding stock, a medallion generates income to the owner, which is reflected in the fares collected (if the owner drives the cab himself), or in the lease of the cab (if the owner hires someone else to drive the cab). When fares go up, the value of the medallion increases. This is partially offset by the increase in supply of medallions.

But the net effect on the value of medallions seems to have been positive. The average winning bid in last week's auction was just shy of $300,000 for a medallion. That is up from $10 in the original sale in 1937 and up 50% from $199,875 in the last auction in 1997. Historically, NYC taxi medallions have been great investments.

For individual investors who missed out on the opportunity to buy their own NYC taxicab medallion last week, the best way to participate in this market is through the shares of Medallion Financial (NASDAQ:TAXI). The company's primary business is making loans to individuals and companies to buy taxi medallions, though, it also sells advertising space on top of NY taxis.

From a high of $31 in April 1998, the stock fell to $3 in July 2002, but has since rebounded to around $8 today. At that price, it is still trading below book value of assets -- a rare find in today's stock market. That compares favorably to other commercial and consumer finance companies, including CIT Group (NYSE:CIT) at 1.3 times book value, AmeriCredit (NYSE:ACF), at 1.25 times book value, and Internet-based E-LOAN (NASDAQ:EELN) at 1.7 times book value, as well as traditional financial services companies such as Citigroup (NYSE:C) and American Express (NYSE:AXP), which trade at 2.6 and 3.9 times book value, respectively.

While perhaps not a license to act like a NYC cabbie and yell "Move it, pal!" (or worse) to the slow drivers on your morning commute, investing in shares of Medallion Financial may provide solid returns and an opportunity to participate in the market of a unique financial asset.

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Fool contributor Salim Haji lives in Denver, Colo., and he much prefers riding on his mountain bike than riding in the back of an NYC taxicab. He does not own shares in any of the companies mentioned.