New York taxi drivers win debt crisis after 15-day hunger strike
The New York Taxi Workers Alliance declared victory in its fight against the city government that made millions of dollars by artificially inflating the price of taxi medallions, then left taxi drivers suffocating in debt as these prices were plummeting in the era of Uber.
Here is the NYTWA chief breaking the news Wednesday afternoon, saying that in those words, thousands of families “can get their lives back on track.”
For those of you unfamiliar with the taxi debt crisis, here is a quick recap from March of this year, when taxi drivers were protesting across town, closing bridges and highways:
Here in New York City, you don’t just paint your car yellow and start picking up people on the streets. You need a special taxi medallion to make your car a taxi and pick up hail, and the city limits the number of medallions. As you can imagine, with limited supply and high demand, the value of a locket could increase. As Uber and Lyft completely reshaped the taxi landscape here in the city, that value has plummeted and yellow cab drivers are now underwater, struggling to repay loans on lockets now worth a fraction of what ‘they were at the start.
Over the past two decades, the city has not only seen these prices skyrocket, but encouraged it. To give a few figures on this subject, the prices of medallions climbed 455% from 2001 to 2014 (the last city auction for medallions), inasmuch as New York Times signaled, to fall back quickly. This means that the medallions “went from $ 200,000 in 2002 to over $ 1 million in 2014, then crashed to less than $ 200,000 soon after,” as City and State NY put it on.
The city initially proposed letting drivers borrow even more money to pay off loans on their artificially inflated taxi medallions. Now, the city will offer taxi drivers $ 30,000 upfront, as the city states in a press release:
Mayor de Blasio, New York City Taxi and Limousine Commission (TLC) Commissioner and Chairman Aloysee Heredia Jarmoszuk, and Senator Charles Schumer today announced an agreement between the city, the New York Taxi Workers Alliance (NYTWA) and Marblegate Asset Management (Marblegate), the world’s largest medallion lender, to complete the Medallion relief program (MRP) with City Funded Deficit Guarantee to achieve greater principal reduction and lower monthly payments.
Under the agreement, Marblegate will restructure the outstanding loans to a principal balance of $ 200,000, which will consist of a secured loan of $ 170,000, plus a City grant of $ 30,000. The terms of the new loan will include an interest rate of 5% and a 20-year fully amortizable term. This restructuring will cap debt service payments at $ 1,122 per month for eligible medallion owners.
Much of that debt was blocked by Connecticut hedge fund Marblegate, so it’s fun to read its statement in the New York press release, stating that this is somewhat of a victory for the taxis themselves:
“Today’s deal is a victory for taxis, which are a vital part of New York City’s infrastructure,” said Andrew Milgram, Managing Partner and Chief Investment Officer of Marblegate Asset Management. “This is also a testament to Ms. Desai and the many taxi drivers who have been stubborn advocates and who, along with Blasio’s administration and Senator Schumer, have granted significant debt relief and a dramatic reduction in monthly payments. driver loans. “
This deal isn’t a full debt relief, but it does mean taxi drivers struggling with debt won’t be afraid of losing their homes. This was the case with the family of the city council who hope Felicia Singh, defeated in yesterday’s election in Queens.
The bitterness of the NYTWA struggle is just a reminder of the strength of its opposition and the sweetness of its victory for the unions.