By Ilana Siyance
New York City has unveiled its first concrete plan to aid drivers, who have been ailing amid the COVID-19 pandemic, and before that through predatory loans.
As reported by the NY Times, on Tuesday Mayor Bill de Blasio announced a plan to spend $65 million, from the stimulus funds it is slated to receive from the federal government, to help restructure outstanding loans owned by the drivers. Many drivers have fallen deep in debt from loans that they took out to pay for medallions, or city permits which give them permission to own their own cabs. The city made a lot of money on the medallions, at the expense of the taxi drivers, many of whom became victims to abusive lenders, and exaggerated interest rates.
Their businesses were then battered by competition from ride-hailing companies such as Uber and Lyft. The pandemic was the cherry on top, devastating demand and leaving many of the small cab owners close to bankruptcy. As of January 2021, revenue for the taxi industry was still 80 percent lower than January last year.
City Hall’s plan, named the Taxi Medallion Owner-Driver Relief Fund, will provide up to $29,000 in no-interest loans to each of roughly 3,000 drivers who purchased a medallion for their own cab. “This new plan will be a difference-maker for many, many drivers,” Mr. de Blasio said at a news conference.
The proposal would not be a full bailout— it would still leave drivers in debt, with large monthly payments. On average, most of the drivers owe roughly $500,000 in loans. Still, the deal would help them negotiate with their lenders, and to lower the debt in exchange for a down payment towards the loans. “This proposal recognizes that taxis are a critical part of New York City’s infrastructure, and provides owner-drivers meaningful relief that will help them restructure their loans — lowering their monthly payments and bolstering their economic prospects, while stabilizing the industry,” said a spokesman for the largest holder of medallion loans, Marblegate Asset Management.
The plan also has its fair share of critics, however, who say it does not go far enough. “The mayor’s proposal is a disgrace and fails to deliver the significant relief drivers deserve,” said City Comptroller Scott Stringer, who had recommended a more generous proposal which could forgive more debt using less city money. “There is no excuse not to address the crisis with a real solution. We have the means — we just need the will to meaningfully act.”