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A task force studying New York City's struggling taxi industry called Friday for “mission-driven” investors to help bail out drivers who incurred massive debt once the value of the medallion that allows a person to operate a yellow cab plummeted in the age of Uber and Lyft.
The report also recommends upgrading taxi technology to make it easier to summon a yellow cab by smartphone so that traditional taxis can compete with app-based services.
The 76-page report details how the value of a taxi medallion topped $1 million in 2013 but sank to less than $200,000, leaving many medallion owners hundreds of thousands of dollars in debt and facing foreclosure or bankruptcy.
“Uber, Lyft and other app-based companies were able to come into the market entirely unregulated,” City Councilman Stephen Levin, co-chairman of the task force that produced the report, said at a City Hall news conference. “We saw over 100,000 licenses in the streets within just a few years. What did that do to the million-dollar medallions that the city sold?
When the collateral for a million-dollar loan is suddenly worth $200,000," Levin said, “The lender seeks more collateral. You put up your home, you put up all of your assets, you put up your family’s assets, just to be able to hold on to the investment you saved for your entire adult life.”
City officials adopted a moratorium on new licenses for for-hire vehicles in 2018 and extended it last year, but they have not yet taken action to provide relief to the medallion owners who are buried in debt.
The task force is recommending that the city recruit “mission-driven” investors who would buy the loans, forgive the bulk of the money and restructure the payments.
Bhairavi Desai, the founder of the New York Taxi Workers Alliance and a member of the task force that produced the report, said there are about 3,000 drivers who need debt relief because they owe more on their loans than the medallions are worth. She said the average debt is about $600,000, and she suggested that all but $150,000 of that should be forgiven. “We invested in this city,” Desai said. “We're asking you to invest in our families.”
Levin said debt collectors are already buying up medallion loans at discounted prices but are not providing any relief to the owner-drivers.
Task force members said the size of any debt-relief fund is not known.
Drivers attending the news conference said the rescue plan would be the answer to their prayers.
“If it goes through we’re going to have our life back,” said taxi driver Mouhamadou Aliyu, 47, who said he owes $635,000 on a medallion that's worth a fraction of that.