The Taxi and Limousine Commission defended its new debt relief program for drivers on Friday, claiming it has already wiped millions of debt off the books. But at a city council hearing, drivers said terms offered by lenders still made them work for less than minimum wage.
The city’s Taxi Medal Relief Program is set up to help drivers restructure their loans on more favorable terms. The city will provide $20,000 to lenders to reduce the amount owed to drivers, and then provide another $9,000 to drivers whose monthly payments are more than $1,500.
Over the past decade, the taxi industry has outpaced the entry of app-based car companies for hire such as Uber and Lyft. New “e-hail” drivers have swept the streets, and the yellow cab medal’s value has fallen from more than $1.2 million at its peak in 2014 to about $100,000 today.
Eight taxi drivers committed suicide in 2018, many citing heavy debt burdens as the reason.
There are 13,587 medals in total, allowing yellow taxis to pick up streetwood. The city estimates that about half is owned by fleets with multiple medals, and the loan program only allows holders of five or fewer medals to apply. While it can’t estimate the total debt burden the drivers face, the city believes there are up to $1 million in loans.
TLC also believes the $65 million earmarked for the program is enough for every driver who needs help.
But yellow taxi drivers have been demonstrating outside City Hall for several weeks now, demanding the city offer a better deal. The programme, which is expected to help 2,250 drivers with loans, went into effect last month and received final approval from the city council this week.
The chair of the transportation committee, Yidanes Rodriguez, noted that TLC “failed to engage the council” before moving forward with the plan. Although he didn’t suggest stopping it either.
TLC said Friday it has already evaluated 1,000 applicants for the program and helped 90 drivers reduce their loans, eliminating $14 million in total debt.
“Reducing this debt is critical to improving the health and viability of the iconic yellow taxi industry,” Aloysee Heredia Jarmoszuk, commissioner of the Taxi and Limousine Commission, said Friday.
But strong resistance, led by a group representing thousands of taxi drivers, the New York Taxi Workers Alliance, is urging the city to offer drivers a better deal. The group claims that even a restructured loan can leave drivers with monthly mortgage payments of up to $2,000, leaving them earning less than minimum wage. They are urging the city to limit the monthly payments to $800 a month.
“It’s a bridge to bankruptcy,” Bhairavi Desai, president of the New York Taxi Workers Alliance (NYTWA), said Friday. “The city with an annual budget of $96 billion, was given $6 billion in COVID aid…the city got the money, all we’re talking about is increasing drivers’ influence at the table.”
Her group wants the debtor to be the guarantor of all medal-related loans, which she said will help lenders offer lower rates.
Her opinion was gaining traction and supporters in the federal government.
A congressional delegation in New York, including Senator Schumer and Representative Alexandria Ocasio-Cortez, took part in siding with the NYTWA. In a letter to Mayor de Blasio they wrote that his program “failed to achieve” the goal of reducing drivers’ debts. While the problem did not begin during his administration’s tenure, “the city has a moral obligation to correct this injustice.”
The city said Friday that it would not be financially responsible to taxpayers if it served as a pillar of all medal loans.
Private equity firm Marblegate, which has purchased hundreds of underwater medal loans, has not confirmed whether it is working with the city on its new program, but a company spokesperson said that as of last March, it has waived $140 million in debt on 800 medals.
While trips plummeted during the worst of the pandemic in 2020, TLC reports that things are picking up for yellow taxis. Drivers see 30 to 40 trips per shift, up from about 11 per shift 18 months ago.
“We are in a much better place for pontoon owners not just to earn a decent living wage, but to be on the path to saving money and not taking on the burden of incomprehensible debt,” said Commissioner Heredia Jarmuschuk.
But several drivers gave tearful testimonies to the effect that this was not the case.
Chime Gyatso bought a medal in 2009. All was well until 2014, when the Uber and Lyft app saturated the taxi market and the city failed for years to put an end to new vehicles until 2018. He begged TLC to offer a better deal for drivers like him. .
“TLC threw us into the Hudson River,” he said. “Please, you have to save us from the Hudson River. Nine drivers have already committed suicide, and now I think it’s my turn.”