Yellow taxi drivers are drowning in medallion debt

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Basmalla Attia, Advertising Director

Yellow taxi drivers in New York are struggling to pay off their medallions, which are permits that allow drivers to pick up passengers from the streets, and as a result, they are urging the city to help with debt payments. The city must listen to drivers and find a plan to address both the challenging circumstances and huge high debts before taxis become extinct.

The New York Taxi Workers Alliance (NYTWA) has stated the average debt owed on medallions by drivers is $600,000, according to The Guardian.

An investigation by The New York Times found that the price of medallions rose from $200,000 to $1 million. This created a huge problem for drivers because they are forced to pay higher debt payments.

Bhairavi Desai, the executive director and founding member of NYTWA, said that “between 2011 and 2019, drivers, adjusted for inflation, saw a decrease of 44% of their earnings,” according to Democracy Now.

Taxi drivers are also responsible for charges like gas, insurance, surcharges and repair fees, in addition to maintaining the cost of living for their families. On top of all that, they are asked to pay a large amount of money to pay off their debt.

Dorothy LeConte, 64, owes a medallion debt of $558,000 with a monthly payment of $2,000. “Sometimes, I think about suicide,” LeConte said to In These Times.

This issue dates back to post-9/11 when former New York City Mayor Mike Bloomberg’s administration created inflation in the medallion system and placed a limit on the amount that could be sold, in order to make it scarce and valuable and raise revenue for the city, as reported by The Guardian.

Medallions limit congestion and allow few people to be licensed yellow taxi drivers. As a result, many saw medallions as the path to financial stability.

Moreover, other major circumstances leave drivers struggling to pay off their collective debt.

The introduction of unregulated companies like Uber and Lyft while taxi drivers remain regulated by the city caused taxi drivers to make less profit. page1image31854720 page1image31860480

The COVID-19 pandemic exacerbated the crisis as it caused the market to plummet and led to health risks for drivers, according to Gothamist.

While the city must forgive the taxi drivers’ debt, doing so may set an unsustainable precedent, therefore a tailored payment plan is the best course of action.

The Taxi Medallion Relief program is the city’s current attempt to help restructure medallion loans to reduce debt, but that is not enough.

The NYTWA’s proposed reconstruction plan totals up to $90 million over 30 years, rather than the original one for $65 million. This comes with “a city-backed guarantee to reduce all outstanding medallion debt to a maximum of $145,000, payable at $800 a month,”, according to The Guardian.

An effort must be made to listen to the demands of taxi drivers when they protest outside City Hall. Even if the city is unable to forgive their debt, it should at least provide a plan to alleviate the hardships they are facing.

Ownership of the medallion and freedom from debt should serve as a taxi drivers’ retirement reward. These workers have spent a lifetime trying to pay off debts and the medallion is all they have.

The least the city can do to show its appreciation for the drivers’ hard work is to help them in their hour of need.