Letitia James taxi workers

HUNGRY FOR JUSTICE: State Attorney General Letitia James addressed taxi drivers who were in the midst of a two-week hunger strike outside City Hall shortly before it was announced that under a deal brokered by U.S. Senate Majority Leader Chuck Schumer, with some assistance from her and Congresswoman Alexandria Ocasio-Cortez, meaningful debt relief was being provided to those who owed as much as $600,000 on medallions whose value had plummeted, so that they would now have to pay off a maximum of $170,000 on their loans.

The New York Taxi Workers Alliance Nov. 3 finally obtained major debt relief for its members who were victimized by predatory lenders and an artificially high price for the city-issued taxi medallions set during Mayor Michael Bloomberg's administration.

Under a deal brokered by U.S. Sen. Chuck Schumer, with the support of Rep. Alexandria Ocasio-Cortez and State Attorney General Letitia James, the medallion loans will be capped at $200,000 and further reduced to $170,000, thanks to a city-funded subsidy.

6,000 to Benefit

The debt-relief agreement covers close to 6,000 drivers, many of whom are immigrants, and will be "backstopped" with a city guarantee.

Historically, the city sold the taxi medallions to drivers, giving them an exclusive franchise to pick up fares on city streets. But for nearly a decade, as ride-sharing apps like Lyft and Uber proliferated, the value of the medallions plummeted, forcing many drivers into bankruptcy and foreclosure.


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Nine drivers committed suicide, including Doug Schifter, a livery cab driver who shot himself outside a City Hall  gate in February 2018 after posting on Facebook that the increased competition for fares had forced him to work 120 hours a week in what he called "a new slavery."

The union, which represents 21,000 cab, black-car, Uber and Lyft drivers, estimates the average medallion-related debt is $600,000, which is often linked to the drivers' home mortgage.

Initial Relief Inadequate

The protests intensified when the de Blasio administration launched a less-generous relief program that the union rejected as inadequate, pointing out that the city had pocketed close to $1 billion in revenue from the inflated prices for medallions.

The victory was the culmination of a grass-roots campaign that included cab caravans, weeks of a 24-7 presence outside the gates of City Hall, and a 14-day hunger strike that ended when the deal was finalized.

"This says that the union movement can build and win with popular support--you don't see that very often," said Bhairavi Desai, executive director of the Taxi Workers Alliance, during an interview after the announcement of the debt-relief program.

"We had just ordinary people go to bat for us, where this really felt like not just a driver victory but a bigger working-class victory, because it had so much popular support," Ms. Desai said. "It also says you don't have to accept compromises and you can be militant in your actions and steadfast in your principles."

'Loans Now Affordable'

During the announcement, Mr. de Blasio said his earlier program had "already helped over 200 drivers" to "achieve $23 million in debt forgiveness. And that spirit of being willing to think together about how to do better, how to go farther, that's what got us here," he said. "These drivers deserve our respect, our appreciation as all New Yorkers."

Mr. Schumer joined Mr. de Blasio's daily zoom press conference from Washington, saying, "Eventually, we brought in Marblegate, the lenders, and we've come up with a solution...the taxi drivers are going to have to pay a lot of money each month, but it'll be at least money they can afford."

He said previous lenders "took very great advantage of our taxi drivers. They had loans they couldn't pay, their homes were being foreclosed, they couldn't feed their families."

The Senate Majority leader described how during a recent "ride along" arranged by the union, he "had a very emotional moment" when he met one of the hunger strikers.

'Brother Killed Himself'

"We did a drive with a man named Mr. Chow, and he told me his brother had just killed himself because he couldn't pay the mortgage, his family was being kicked out of the house, and they were humiliated," Mr. Schumer said. "It was so moving to me, knowing how taxi drivers struggled."

A February 2019 story by the New York Times that documented how "a handful of taxi industry leaders artificially inflated medallion prices and made hundreds of millions of dollars by channeling immigrant buyers into reckless loans."

As the drivers sunk deeper and deeper into debt, the Bloomberg and de Blasio administrations brought in $855 million in revenue by auctioning off additional medallions and collecting taxes on the private transfers of them, the Times reported.

As a consequence, the story said, medallion prices spiked to $1 million in 2014, up from $200,000 in 2002, as local credit unions "adopted tactics similar to those in the housing crash, issuing loans with exploitative terms to low-income drivers who could not afford them."

For years, the city's once highly regulated cab industry kept the number of cabs between 12,000 to 14,000. By 2013 close to 50,000 cars were for hire. Over several years that number climbed to 100,000.

Politically Wired Firms

Throughout the period, high-level City Hall employees left to work for Uber or Lyft. Jason Post, Mayor Bloomberg's First Deputy Press Secretary, became Uber's director of policy and communications, and Stu Loeser, his Press Secretary, became a spokesman for Uber.

In 2014, David Yasky, a former Taxi and Limousine Commissioner appointed by Mr. Bloomberg, became a consultant for Lyft, while Ashwini Chhabra, a TLC deputy commissioner, joined Uber.

Close to 1,000 medallion owners went bankrupt, while others struggled to stay current on loan installments that far outstripped their income from driving.

The collapse in the medallion mortgage market undermined two New York credit unions, the Melrose Credit Union and the LOMTQ Credit Union, requiring the National Credit Union Administration to step in and take them over and sell off the portfolios of non-performing loans.

In September, former Melrose Credit Union CEO Alan Kaufman was sentenced to three years and eight months in Federal prison and ordered to pay $2 million in restitution to the NCUA.


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(2) comments

Benzo

meanwhile American Express taking me to court for 500$ [happybirthday]

User883848

At the same time financial institutions must mot be predatory in lending the loan applicant must know and realize he/she cant take a loan that realistically is over drawn. The medallion price drop was a result of market conditions at work . If the City made money at the time of sales there was a demand for the medallions or they wouldnt have been purchased. It looks like a bailout of nearly the majority of the full purchase.

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