At the taxi drivers’ protest vigil on Broadway by City Hall Park on Oct. 20, cases of coconut water replaced trays of rice and vegetables generously spiced with chili peppers.
Eight owner-drivers launched a hunger strike, demanding that Mayor Bill de Blasio add loan guarantees to the city’s revised budget, due Oct. 31, to reduce the crushing debt they carry.
“The city is still not responding to our call for real debt relief,” New York Taxi Workers Alliance head Bhairavi Desai told The Indypendent. The union said the mayor’s inaction is consigning drivers “to a lifetime of poverty and death in a debt trap.”
Drivers chanted “We want justice/ Talk to the union,” interrupted by bullhorned warnings that anyone triple-parked south of Chambers Street should move their cab if they didn’t want it towed.
Individual drivers own roughly 40% to 45% of the city’s 13,587 yellow medallion cabs, the only ones allowed to pick up street hails in central Manhattan south of Harlem. For decades, owning a medallion was a ticket to a career for cabbies, now almost all immigrants. It enabled them to work for themselves instead of leasing from a fleet and was an asset for their retirement.
But owner-drivers have been the ones hardest hit by crises afflicting the industry over the past seven years. Drivers’ incomes, stagnant for years, plummeted after the city allowed Uber and Lyft to flood the streets with their cars. Between late 2017 and early 2019, nine financially strapped cabbies, from yellow-cab owner-operators to Uber/Lyft, livery-car service and black-cab drivers, committed suicide.
Last year, the COVID-19 pandemic and lockdown almost completely eliminated their street-hail business. “Half the cabs are sitting in storage,” Desai told the rally’s attendees.
A third element compounds the crisis: The value of medallions inflated more than fivefold from 2001 to 2014, to more than $1 million, and then the arrival of app-based cabs popped the bubble. Owner-drivers couldn’t bring in enough money to make their loan payments, and their medallions had depreciated so much that if they sold them, they’d still be personally liable for hundreds of thousands in debt.
The mayor “must fix the crisis,” says Richard Chow, one of the hunger strikers. He spent $410,000 for his medallion in 2006 and now has monthly loan payments of $2,766. The lender has offered to reduce his debt to $275,000, with $1,600 payments.
Chow, a sixtyish immigrant from China, seems to have a permanently saddened face. His younger and deeper-in-debt brother was one of the nine suicides.
“Even $1,600, I can’t afford it,” he says. “There’s not enough business out there.”
RIVAL RELIEF PLANS
NYTWA and the city Taxi and Limousine Commission have competing debt-relief plans.
The TLC estimates that 2,500 to 3,000 of the about 6,000 individual owners are in debt, in amounts ranging from less than $25,000 to $550,000. It says it can’t be more specific because loan documents are private, except for the 1,800 medallions the city auctioned off when it expanded the number of yellow cabs between 1996 and 2014. (The Bloomberg administration was happy to collect an estimated $850 million in revenue from the bubble; the last auction, in February 2014, was advertised with leaflets boasting “It’s Better Than the Stock Market.”)
New York Taxi Workers Alliance estimates that at least 4,000 owners are in debt trouble, even though only around 3,000 drive their cabs themselves. Many, says Desai, are retired, still owe money and lease the cabs to other drivers through brokers — a business that collapsed during the pandemic.
A 2019 survey of 450 drivers by the TLC found their average debt to be $499,000.
The TLC’s Medallion Relief Program, unveiled in late August, would provide $65 million in grants to distressed owners. It would give them $20,000 for down payments to lenders who restructure loan principals and set lower monthly payments plus up to $9,000 to help with monthly payments during the first year.
As of Oct. 16, the mayor’s office said, the program had helped 102 yellow medallion taxi owners, reducing their average debt of about $325,000 by almost half. The city-supported renegotiations with lenders eliminated the remaining debt owed by 21 of them, generally relatively small amounts, according to the Taxi and Limousine Commission. More than 1,000 other owners are in the pipeline, after completing appointments with the TLC’s Owner/Driver Resource Center.
The TLC came up with the idea of grants for down payments last year, when, in its efforts to help drivers survive the loss of work during the pandemic, it found that having a down payment was the best leverage they had to get lenders to renegotiate, but drivers still usually needed to borrow the money from family or friends.
The commission says it has been able to reduce some drivers’ payments to less than $1,500 a month.
That level is still “not sustainable,” Desai says. NYTWA’s proposal would give individual drivers grants of $30,000 that they would use for down payments if lenders reduced their total debt to $175,000. The city would then guarantee the other $145,000, and payments would be set at $800 a month — low enough, Desai says, for drivers to make at least minimum wage.
Lenders would still make a profit, she contends, because most “bought their loans on the secondary market for as little as $115,000.”
If the driver failed to make payments on the loan, lenders could repossess medallions, and the city’s guarantee would cover the difference between the amount owed and the medallion’s market value. Assuming a 5% default rate, that would cost the city $93 million over 30 years — less, Desai says, than the annual revenue from the $2.50 congestion-pricing surcharge added to fares in central Manhattan south of 96th St. in 2019.
“I’ve run the numbers. This makes sense,” city Comptroller Scott Stringer says. “This proposal will save an industry, save lives. We’ve got to go all in.”
“We must see the city’s initiative as only a beginning, and we must continue to push for additional support for the struggling individual medallion owners,” city council Committee on Transportation Chair Ydanis Rodriguez (D-Manhattan) said in a statement, urging people to “listen to the Taxi Workers Alliance advocates’ concerns” and follow the recommendations the council’s Taxi Medallion Task Force made in 2020.
The hunger strike will rotate participants, so no one starves themselves into anorexic damage. Other participants will include New York State Assemblymember Zohran Mamdani (D-Queens) and City Councilmemberelect Shahana Hanif (D-Brooklyn), who led the crowd in a call-and-response chant in Bengali.
Debt relief, Mamdani said, will make the difference between “merely postponing devastation and suicide and stopping it.”
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