Debt Crisis for NYC Taxi Drivers Just Eased

Relief deal will see medallion debt reduced to $170K per driver: 'NYT'
By Arden Dier,  Newser Staff
Posted Nov 4, 2021 9:30 AM CDT
After 14-Day Hunger Strike, NYC Taxi Drivers Score a Win
A line of yellow cabs in New York City.   (Getty Images/Medioimages/Photodisc)

A 14-day hunger strike may have helped rescue New York City's yellow taxi drivers from crushing debt. City officials announced Wednesday that a deal was reached with the largest holder of taxi loans in the city to reduce the amount owing for each owner of a medallion, a city permit allowing a yellow cab to operate, to no more than $170,000, down from an average of $500,000, and reduce monthly payments to no more than $1,122, the New York Times reports. The city will make up for this by providing a $30,000 cash payment for each driver and by guaranteeing every loan, meaning it will repay the balance in case of default.

Outgoing Mayor Bill de Blasio had in March announced a relief plan, said to cost $65 million, that gave medallion owners up to $29,000 each in grants. But drivers, who have long complained about unaffordable loans and artificially inflated medallion prices—which spiked to $1.2 million before a market collapse in 2014; they’re now worth about $100,000, per the New York Daily News—said that didn't go far enough. Some blamed the city, which had promoted the medallions as an investment "better than the stock market." About a dozen drivers launched the hunger strike on Oct. 20 as the Taxi Workers Alliance, representing 20,000 drivers, camped out at City Hall.

De Blasio and Sen. Chuck Schumer secured the new deal, expected to cost $100 million or more, with Marblegate Asset Management, which holds about 40% of loans taken out to buy medallions. But the city says it "will work with all other medallion lenders to achieve the same terms." The Taxi and Limousine Commission tells Gothamist that negotiations with 12 different lenders meant 173 driver-owners saw their combined debt reduced from $52.3 million to $30.9 million. The Taxi Workers Alliance is hailing "a new beginning." "It means everything to me," adds driver Mouhamadou Ailyuwho, who owes $650,000 on his medallion loan, per Gothamist. "I'm free." (More New York City stories.)

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