NYC continues to seek alternative ways to prevent yellow cab drivers from continuing to ‘bump’ into bankruptcy
The almost “death sentence” yellow cab industry, one of the most powerful emblems of New York City, is closing this week a chapter that will allow hundreds of medallion owners, (as the permits to operate are known) receive a “lifeline”. This step is taken after years in which the overwhelming interests of the loans, to acquire these licenses, led some to ruin. And, in the worst of extremes, to suicide.
Until this Friday, September 30these small businessmen have a chance to close the restructuring of the medallion loans, with the empresas FieldPoint, Marblegate y Da Palma, the three main lenders of funds for these permits.
“We want to make sure that all eligible drivers get this debt relief that it will save and change their lives. Our members went on a 15-day hunger strike to press and make this historic victory possible,” he said. Bhairavi Desaidirector of the New York Taxi Workers Alliance (NYTWA).
Nearly 1,000 drivers have already received a total of $200 million in debt forgiveness.
They will pay much less
The program agreed to with the City, through the Taxi and Limousine Commission (TLC), restructures the taxi medallion loans so that they are secured in case of default. Now most have $170,000 maximum principal balance and a maximum interest rate of 7.3%.
The current average debt that drowned the owners of the emblematic yellow taxi drivers is $550,000 with average monthly payments of $3,000. Under the final schedule, that loan time was substantially reduced to $170,000, payable to $1,234 per month.
The final plan reflects an interest increase agreed in November 2021 from 5% to 7.3% as rates have risen due to inflation, but they now have a longer term from 20 years to 25 years to help offset some of that cost.
“This changes the future of this business. It is a testament to the tireless organizing of NYTWA’s 25,000 member drivers through 46 days of 24/7 protests, arrests and a 15-day hunger strike. When we fight, we win,” said Assemblyman Zohran Mamdani.
On the “way” other reliefs
Other proposals are on the way to improve the income of these taxi drivers, the TLC has just presented a new proposal that could be approved in October, which would approve an increase in the cost of traveling in a yellow taxi in the Big Apple, in approximately one 2. 3%. This would mean the first increase in taximeter markers in a decade.
Specifically, the base fare and surcharges for any trip would increase from $3.30 a $4.50. Driver pay would also increase by 29% and flat-fare rides from John F. Kennedy Airport to Manhattan would go from $52 to $65.
The predictable response from thousands of regular users of taxi services is that ride-hailing apps like Uber and Lyftwill continue to be more and more the cheapest option for those who need to move outside of the Subway spectrum.
“Obviously crime forces you to avoid trains when you leave work late. But this inflation affects us all. And a dollar or two saved on a trip is something. And the yellow ones are obviously more expensive”comment Mildred Mata, a hard-working Mexican from a restaurant in midtown Manhattan.
The devastation of this sector began to be recorded long before the pandemic, an economic tragedy that was reflected in a chain of suicides by operators of these transport services. Only in a few months of 2018, six taxi drivers took their lives. Two of them Dominicans.
For taxi drivers like the Dominican, Jesús Marquez, 65 years olds, who subleases a medallion, this agreement managed to give an “oxygen” of survival to an industry that it was about to disappear completely, at the additional cost of thousands of families ruined and on the streets.
“New York City is not the same. Where are the thousands of tourists who arrived earlier through the airport? Where are the executives who came to the city? Competition is now stronger with app taxi drivers. Let’s see if we can recover”, considers the islander, with 20 years in the sector.
Other steering wheel professionals such as Colombian Camilo Achiverri, 53 years oldare less optimistic: “With this inflation my brother, every day you have to work more hours to do the same. There is a reality, people prefer new platforms. Go to the airports,” she indicated.
These individual debt reliefs of thousands of dollars were agreed on November 3 and the compass for debt renegotiations was opened on September 19.
4 keys to the medallion crisis
- Since 2011, revenue from yellow cabs has fallen by more than 50%.
- At its peak in 2014, yellow cab medallions sold for $1 million.
- Since the proliferation of Uber, Lyft and other ride-sharing apps starting in 2011, the medallion’s value has plummeted to $80,000.
- Taxi drivers had to scramble to pay off hundreds of thousands of dollars in debts racked up by medallions that became virtually worthless overnight.
- 3,000 license holders to operate yellow cabs in NYC are qualified under the Assistance Program to receive significant relief from their debts.