New York City Cabbies Rescued From Debt Crisis In New Dawn For Iconic Taxis

New York City taxi drivers, crushed by debt after years of exploitative loan practices, will be rescued under a new deal announced by state officials on Wednesday, a major win for drivers amid a days-long hunger strike demanding help.

Mayor Bill de Blasio and Sen. Chuck Schumer (D-N.Y.) announced the deal, saying they had reached an agreement between the Taxi Workers Alliance and the city’s largest holder of taxi medallion loans, Marblegate Asset Management. All taxis in New York are required to have a tin medallion bolted to the hoods that authorize them to pick up fares.

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Prices for the medallions, which are limited in number, began to soar about 20 years ago, peaking above $1 million by 2014. Many cabbies took on massive debt to pay for them, even if they couldn’t afford it. The medallion market collapsed later that year, and many drivers went bankrupt. Some died by suicide, prompting investigations into market practices, but not before drivers were saddled with unaffordable repayments.

The deal, which The New York Times noted could see the city spend more than $100 million overall, will reduce the amount each driver owes to $170,000 from an average of about $500,000. Maximum monthly repayments will be $1,122 for each medallion, and the city will guarantee the loans if a driver defaults. All drivers in the city are eligible for the program.

BREAKING NEWS:
2 words:
WE WON!!!!

+3:
THANK YOU NYC!!!!

We have won a city-backed guarantee! Loans will be restructured to max $170K! No more debt beyond our lifetime. No more risk of losing homes.

DRIVER POWER! UNION POWER! #EndCabbieDebt

â€" NY Taxi Workers (@NYTWA) November 3, 2021

Driver advocacy groups praised the move as an effort to protect the cabdrivers who help keep New York’s arteries running around the clock.

“Today marks a new dawn, a new beginning for a workforce that has struggled through so much crisis and loss,” Bhairavi Desai, the executive director of the New York Taxi Workers Alliance, said in a statement. “Today, we can say owner-drivers have won real debt relief and can begin to get their lives back. Drivers will no longer be at risk of losing their homes, and no longer be held captive to a debt beyond their lifetime.”

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Officials had announced another plan in March to spend $65 million to help bail out cabbies, but the program was lambasted as being far too small.

The New York Times published a lengthy series on the plight faced by taxi drivers in 2019, which showcased years of exploitative lending practices that saw some drivers take out the loans amid promises the debt was a good investment.

I was thrilled to talk with the hunger strikers and this incredible movement of New Yorkers after my office, @NYTWA, and @NYCMayor reached a deal to ensure debt relief for our taxi workers.

You made this happen! pic.twitter.com/LdBecFnzOl

â€" Chuck Schumer (@SenSchumer) November 3, 2021

Drivers began their hunger strike more than two weeks ago, camping outside City Hall and demanding more support. Schumer, whose father-in-law was a cabdriver in New York City, said he was “proud” to be part of the deal that would end undue levels of debt.

“The medallion debt crisis has gone on for years, taking lives and livelihoods,” Schumer said in a statement Wednesday. “Together, we will bring this ongoing situation to a just resolution for the thousands of cabbies who work every day to serve this City.”

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The full cost of the program has not yet been determined.

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