The growing popularity of on-demand taxi services like Uber and Lyft is revolutionizing the way people get around in many cities. Early data is starting to show that in the long term, they could lead to a fundamental change in the whole industry. The first steps of this transformation are already being felt on the streets of New York.

Most major cities in the US have some limit on the number of taxis on the road, and this often comes in the form of medallions to certify vehicles. These are bought by companies that then lease the right to use a particular cab to drivers. However, this artificial cap also creates a major market for medallions. For example, the value of one of New York City's 13,437 medallions reached over $1 million last year, according to The New York Times.

But the new disruption in the market from services like Uber and Lyft is eroding medallion prices fast. In New York at least, drivers for such ridesharing services still need to be licensed by the Taxi and Limousine Commission and carry commercial insurance, but they aren't required to have a medallion. According to an investigation by The New York Times, medallion prices in the Big Apple averaged $872,000 in October, down 17 percent from their peak.

These on-demand taxis are also grabbing customers by offering cheaper prices than their traditional counterparts. Over the summer, Uber even temporarily cut fares by about 20 percent in New York to gain more riders. The NYT reports that some routes in Chicago are about half the price when using an app-based service over a regular taxi.

Traditional cabbies are trying to fight back against the new technology, though. There's a growing movement to create a national union among drivers to protect their interests. In Europe, operators protested earlier this year, and some countries have worked to ban the services.

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