New York City has a $65 million Medallion Relief Plan (MRP) that provides a $20,000 down payment to help restructure taxi-medallion-related loans on top of $9,000 in monthly debt-payment assistance.
But, according to taxi drivers, it is not enough to help them deal with the perfect storm of events that led to a crash in the value of their official medallions with the emergence of rival services Uber and Lyft.
In 2011 the cost to buy one of the medallions, a transferable permit allowing a taxi driver to operate, reached $1 million. Between 2014 and 2015 that value had plummeted to about $650,000, leaving many drivers paying off their medallions deep in debt.
Today those medallions are valued at about $100,000.
It was 2019 when Augustine Tang, a native New Yorker, was on the road for more than 10 hours, driving the yellow cab he inherited from his father.
But the business was deteriorating and Tang could barely make $100 a day, a significant drop from what had been $200-$300 for an eight-hour shift.
There were times where he would go two hours before getting his next passenger. Somewhere between spending long hours at an airport in the hope of a customer, to waiting on the bustling streets but with no passenger in sight, Tang realized he had hit rock bottom.
“I couldn’t even fathom how am I going to even be able to pay for my mortgage, as well as … my rent and bare necessities,” he said.
After his father died in 2015, not only did Tang legally inherit the taxi medallion he owned, but also the $530,000 debt that came with it.
Like several other taxi drivers, he was drowning in debt.
The CCP (Chinese Communist Party) virus pandemic only worsened the already feeble business of the taxi industry of New York.
Deciding they had not received sufficient aid from the city, Tang and other taxi drivers moved to take matters into their own hands.
On the nippy evening of Sept. 22, Tang–along with New York Taxi Workers Alliance (NYTWA), a 25,000-member union of NYC professional drivers, members of Democratic Socialists of America, city council members, and a platoon of Yellow Taxi drivers–gathered for the sixth day outside city hall in Manhattan in an ongoing 24/7 protest against the Taxi and Limousine Commission’s (TLC) relief plan.
Implemented earlier this year, the program’s agenda was to aid medallion owners hardest hit by the pandemic.
The city agreed to pay $20,000, in the form of grants, to medallion financiers, with the caveat they agreed to forgive a certain percentage of the owner’s loan. Furthermore, drivers could qualify for an additional $9,000 based on hardships. An estimated 2,000 drivers would be eligible for that assistance.
“They deserve all the support we can give them as ridership recovers,” Mayor Bill de Blasio said in a press release at the time.
“I can tell that this program is not going to work,” Randal Wilhite–an attorney with the Owner-Driver Resource Center at the New York Legal Assistance Group, a non-profit that provides free legal services combatting racial, economic and social injustice–said at the protest.
“The medallion owners owe, on average, $500,000 or more on their medallions. The medallions themselves are worth about $100,000. This is why it is so important that the city provide relief to right this wrong,” said Wilhite.
As a counterproposal, the taxi workers alliance put forth the Medallion Debt Forgiveness Campaign that would restructure medallion debt at $145,000 and refinance it for $800 per month; or to make cash settlements for no more than $145,000.
“The backstop would give lenders security that their loan is guaranteed, while providing borrowers protection against home foreclosures and liens on personal assets in the event of a foreclosure,” the proposal read.
On Sept. 27, the city and the taxi and limousine authority held a virtual public hearing where several taxi drivers and council members backed the association’s proposal.
“The TLC’s plan to provide $65 million toward a debt-relief program really concerns me,” testified New York state Sen. Jessica Ramos (D-N.Y.) of District 13, which includes Jackson Heights, East Elmhurst, Elmhurst, Corona and parts of Astoria.
“The way the money is being leveraged to restructure drivers’ debts helps the banks, not the drivers. With different tactics and better wherewithal, I believe the city could produce lower loan balances, lower monthly payments and cap interest payments,” she said.
The commission declined the counterproposal by taxi workers. “Any other plan would take two years and more funding. And we don’t have any more funding,” said its commissioner and Chair, Aloysee Heredia Jarmoszuk.
A few hours later the City Comptroller, Scott Stringer, tweeted: “As chief financial officer for the City of New York, I vetted NYTWA’s medallion debt relief proposal and deemed it effective, reasonable, and fiscally sound. We have a moral obligation to bring justice to the thousands of taxi medallion owners and drivers.”
On Oct. 2, De Blasio announced 57 loan-structuring deals have been approved and $10.4 million in debt cancellation has been delivered to distressed medallion owners. Going ahead with the original relief plan, De Blasio said it could bring $500 million of debt forgiveness to thousands of medallion owners.
“The MRP is having a stabilizing effect on the market and preserving an institution that has given as much to our city as the women and men who are its backbone,” he said.
The COVID-19 pandemic has exacerbated the situations for many drivers, crushed under unsurmountable debts. This has negatively impacted the for-hire industry, according to the report by the commission.
“COVID-19 has had an unprecedented impact on New York’s economy, including for-hire drivers and businesses licensed by the TLC, which are dependent on the business, tourism and everyday commuting to provide trips,” said the report.
It added drivers’ gross weekly income was $813 in June, 2020. This was a 37 percent decline compared with June, 2019, when drivers’ gross income was $1,292. Furthermore, the daily ridership numbers were down by 90 percent in June, compared with February, 2020.
Unsatisfied by the TLC’s response, the drivers will continue their 24/7 protest and plan to go on a hunger strike, according to Bhairavi Desai, the executive director of the NYTWA.
“We’re not leaving from these streets unless justice is served,” Desai said at the protest.