Drivers demanding a more aggressive debt relief plan on Oct. 25 (Assembly Member Zohran Mamdani)
Nov. 4, 2021 By Allie Griffin
The city, taxi drivers and a medallion loan provider have reached an agreement on a new debt relief plan, ending cabbies’ 15-day hunger strike and providing them relief from crushing debt.
The new plan vastly expands the city’s previous debt plan announced in March, which taxi medallion owners had said provided little relief.
Drivers — supported by their union, the New York Taxi Workers Alliance — have camped outside City Hall each day for more than a month to protest the previous plan. About a dozen drivers along with Astoria Assembly Member Zohran Mamdani started a hunger strike on Oct. 20 that continued until their demands were met.
On Wednesday, the city — at the urging of U.S. Sen. Chuck Schumer — put forward a plan that met medallion owners’ wishes.
“Taxi workers have worked tirelessly to make New York City the most vibrant city in the world, and we refuse to leave them behind,” Mayor Bill de Blasio said in a statement.
De Blasio, Schumer — whose father-in-law was once a yellow cab driver —, the New York Taxi Workers Alliance and Marblegate Asset Management, the largest medallion lender, agreed to a plan.
Marbelgate agreed to reduce the debt owed by each medallion owner to $170,000 — a significant reduction from a driver’s average debt of $550,000. It also agreed to lower drivers’ monthly payments to $1,122 or less.
The city, for its part, will give the lender $30,000 for each driver and guarantee every loan — agreeing to repay it if a driver defaults.
The city’s original $65 million debt relief program didn’t include a city-backed guarantee, which was a major point of contention. The drivers fought for the city’s guarantee so they would be protected against home foreclosures and liens if they defaulted.
The city is working to reach the same terms with all other medallion lenders.
Many of the taxi drivers saddled with debt are immigrants who bought taxi medallions — which allow drivers to operate their own cab rather than be part of a taxi fleet — when they were seen as smart investments and a mechanism to achieve the “American dream.”
However, taxi industry leaders and lenders artificially drove up the price of taxi medallions year after year until the medallions fetched more than $1 million in 2013. Buyers had to take out loans from questionable lenders — who pocketed hundreds of millions of dollars, according to a New York Times investigation — to afford the exorbitant prices.
When unregulated apps like Uber and Lyft came into the city, taxi drivers saw business drop and the value of a medallion plummet. The current value is priced at just over $100,000, according to the Times.
Since the medallion market crashed, nine drivers — plagued by crushing debt — have died by suicide.
The new debt relief plan announced Wednesday will save lives, the New York Taxi Workers Alliance said.
“This is a life-saving initiative,” Executive Director of the New York Taxi Workers Alliance Bhairavi Desai said. “This journey started for us with so much pain and so much grief but we are overjoyed right now. We feel triumphant.”
She added that the new plan marks a new beginning for taxi drivers.
“We can say owner-drivers have won real debt relief and can begin to get their lives back,” Desai said. “Drivers will no longer be at risk of losing their homes, and no longer be held captive to a debt beyond their lifetime.”
1/ Good morning to the tenacious members of @NYTWA, to an inspiring union leader @bhairavi_desai, and the most principled elected @ZohranKMamdani.
We won a city backed guarantee and restructured debt. And we won new beginnings for thousands of taxi drivers – right before Diwali. pic.twitter.com/WNLguuTWaI
— Jaslin Kaur (@jaslinforqueens) November 4, 2021
She delivered the news directly to drivers protesting outside City Hall Wednesday.
Mamdani, who was out there with them, rejoiced. In a statement, he said the agreement will change the lives of taxi drivers across the city.
“Over these past few months — through a hunger strike, an arrest, and having spent night and day in front of City Hall — I have gotten to know many of these drivers and the reasons for their fight,” he said. “They fight to put food on their family’s table, to keep their homes, to send their kids to college, to fight for those we lost to suicide, and to live a future free of the devastation of the debt crisis.”
When it looked like there was no hope, the New York Taxi Workers Alliance, Schumer and de Blasio made real debt relief happen, he added.
“It is through solidarity with each other, that we finally got drivers what they deserve,” Mamdani said.
We won.
On our 15th day of hunger strike, we got word that @NYTWA has reached an agreement with the City.
This amazing news means our drivers can live a future free of the devastation of the debt crisis.
— Zohran Kwame Mamdani (@ZohranKMamdani) November 3, 2021
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2 Comments
WOW. I wish I could be bailed out for my own bad financial decisions.
Maybe forgive the loans of people who are paying 25% interest on their credit card debt next? Or maybe forgive the loans of people who bought a big Mercedes when they could really only afford a Corolla?
This is the brilliance of the Democrats:
When unregulated apps like Uber and Lyft came into the city, taxi drivers saw business drop and the value of a medallion plummet. The current value is priced at just over $100,000, according to the Times.
So the Democrats ignored the flood of ride sharing apps, killed the yellow taxi industry in the process. Now these loans are guaranteed in turn by taxpayers who had nothing to do with these transactions.
Even better—due to the unregulated flood of ride sharing cars, the proliferation of bike lanes, street closures, and pedestrian promenades cars are now stuck in more traffic!
So now the Democrats, in coordination with the most corrupt organization the MTA, must have congestion pricing!!!-another regressive tax on motorists.
Keep voting progressive Democrat and soon they will be taxing you for each breath you take! The Blue wave is working-it is drowning citizens in debt and forcing the middle class to leave!!! Brilliant