By: Hadassa Kalatizadeh
Mayor Bill de Blasio has made it clear that he will not fund a bailout for struggling yellow cab medallion owners, though he would support getting Federal funding for a bailout. The e-hail business, namely Uber and Lyft, has undeniably dealt a substantial blow to taxi drivers, who paid a hefty investment to obtain a loan for the medallions they purchased to gain the right to drive a taxi. Thousands of these drivers are now deep in debt, unable to make ends meet and stuck with no passengers. Even after years of work, they still owe more on their medallion than they are currently worth.
As reported by NY1, on Monday the city released a report revealing the findings of a 45-day investigation into brokers who negotiate sales and purchases of medallions, underlining concerns regarding confusing paperwork. For the report, the city surveyed medallion owners about their monthly payments, which ranged from about $2,400 to over $3,800, and which few drivers were about to keep up with. The average outstanding loan on a medallion is roughly $500,000 to $600,000 as per the Gothamist.
“What we found was a lack of clarity, a lack of written agreements about what exactly the broker’s role was, what the loan terms might be and certainly people did not seem to understand that maybe they’re entering into a loan where the monthly payments are significantly higher than they can afford,” said acting Taxi & Limousine Commissioner Bill Heinzen. The New York Taxi Workers Alliance, a group representing the drivers, maintains that they could best attain relief by a city bailout, with lenders bearing the cost. “What we need right now is more than a report on what city rules have been violated. We need an immediate end to the financial devastation that drivers are facing,” said the alliance’s director, Bhairavi Desai.
Mayor de Blasio has said a city bailout is out of the question. “We do not have the capacity as a city to provide that,” de Blasio said. “I wish we did, but we don’t, that’s just the truth.” The city claims a bailout would cost $13 billion, while the Taxi Workers Alliance says it would be just a fraction of that amount, costing between $1.8 billion and $2.7 billion. “We do not control the lenders and that’s the heart of the problem – that’s State and federal regulation, and I think that’s where some of the biggest problems emerged and it was something we didn’t see nor could we reach,” de Blasio said at an unrelated news conference on Monday, putting the burden on the federal government or the state.
“The City made considerable profit off the medallion bubble and now we owe a moral debt to the thousands of New Yorkers whose lives have been ruined by this scandal,” said Council Member Mark Levine, who supports a bailout. “It is not enough to investigate what went wrong; we need to take dramatic steps to relieve owner-drivers from the burden of crushing loans.”
Without a bailout, taxi officials are pushing for new rules, as well as counseling to give future medallion buyers a clearer picture of the business. Last month, the city announced that it would waive $10 million in fees for taxi medallion owners, and offer financial and mental health counseling for the debt-ridden drivers. Also, one medallion broker has been arrested for exploiting taxi drivers, and harassment.
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