Taxi Drivers Plead With NYC To Offer Better Debt Relief Deal

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The Taxi and Limousine Commission defended its new debt relief program for drivers Friday, claiming it’s already wiped millions in debt off the books. But at a City Council hearing, drivers said the terms lenders are offering still leave them working for less than minimum wage.

The city’s Taxi Medallion Relief Program is set up to help drivers restructure their loans to more favorable terms. The city will provide $20,000 to lenders to reduce the amount drivers owe, and then provide another $9,000 to drivers whose monthly payments come out to more than $1,500.

Over the past decade, the taxi industry has weathered the entrance of app-based for-hire vehicle companies like Uber and Lyft. These new “e-hail” drivers flooded the streets, and the value of a yellow taxi medallion plummeted  from more than $1.2 million at its peak in 2014 to about $100,000 today. 

Eight taxi drivers took their own lives in 2018, many citing heavy debt burdens as the reason. 

There are 13,587 medallions in total, which allows yellow cabs to pick up street hails. The city estimates about half are owned by fleets with multiple medallions, and the loan program only allows owners of five or fewer medallions to apply.  While it can’t estimate the total debt load facing drivers, the city believes there are loans out there going for as much $1 million. 

The TLC also thinks the $65 million allocated for the program is sufficient for every driver that needs help.

But yellow cab drivers have been protesting outside City Hall for several weeks now, demanding the city offer a better deal. The program, which is expected to help 2,250 drivers with loans, went into effect last month and received final approval from the City Council this week.

Bhairavi Desai, President of the New York Taxi Workers Alliance, speaking at a demonstration outside of City Hall, September 2021

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The Chair of the Transportation committee, Ydanis Rodriguez noted the TLC had “failed to engage the council,” before moving forward with the plan. Although he didn’t suggest halting it either.

The TLC said Friday that it already assessed 1,000 applicants for the program and helped 90 drivers lower their loans, wiping out $14 million in total debt.

“Alleviating this debt is crucial to improving the health and longevity of that iconic yellow taxi industry,” Aloysee Heredia Jarmoszuk, Commissioner of the Taxi and Limousine Commission, said Friday. 

But a forceful resistance led by a group representing thousands of taxi drivers, the New York Taxi Workers Alliance, is urging the city to offer drivers a better deal. The group claims even a restructured loan can leave drivers with monthly mortgage payments of up to $2,000, which leaves them earning less than minimum wage. They are urging the city to limit monthly payments to $800 a month. 

“It’s a bridge to bankruptcy,” Bhairavi Desai, President of the New York Taxi Workers Alliance (NYTWA), said Friday. “The city with a $96 billion annual budget, was given $6 billion in COVID aid…the city’s got the money, all we’re talking about is getting the drivers more leverage at the table.”

Her group wants the city to be the guarantor for all medallion related loans, which she said will help lenders offer even lower rates. 

And her view has been gathering steam and supporters in the federal government.

New York’s congressional delegation, including Senator Schumer and Representative Alexandria Ocasio-Cortez have weighed in, siding with the NYTWA. In a letter to Mayor de Blasio they wrote his program “fails to achieve” the goal of reducing debt for drivers. And while the problem didn’t begin during his administration, “the city has a moral obligation to right this injustice.” 

The city said Friday it wouldn’t be fiscally responsible to taxpayers if it served as a backstop for all medallion loans.

The private equity firm Marblegate, which bought up hundreds of underwater medallion loans, didn’t confirm whether it was working with the city on its new program, but a spokesperson for the company said as of last March it had forgiven $140 million in debt on 800 medallions. 

While rides plummeted during the worst of the pandemic in 2020, the TLC notes things are picking up for yellow cabs. Drivers are seeing 30 to 40 trips per shift, up from about 11 per shift 18 months ago. 

“We are in a much better place for our owners to make not just a livable wage, but to be on the path to save money and not be burdened by unmanageable debt,” Commissioner Heredia Jarmoszuk said.

But multiple drivers gave tearful testimony suggesting this was not the case.

Chime Gyatso bought a medallion in 2009. He said everything was fine until 2014, when the ride hailing apps like Uber and Lyft saturated the taxi market and the city failed for years to put a cap on new vehicles until 2018. He begged the TLC to offer a better deal for drivers like him.

“The TLC threw us in the Hudson River,” he said. “Please, you have to save us from the Hudson River. Nine drivers have already committed suicide, now I think this is my turn.”



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