âI was living the American dream. Now I’m in an American nightmare, âlamented Richard Chow on his 8th day of hunger strike and his 39th day at a camp run by drivers outside City Hall. He has been driving a yellow cab since 2015, and he bought a medallion, the physical license needed to operate a cab, the following year. His brother Kenny followed in his footsteps by acquiring a loan to purchase a $ 700,000 locket. Overwhelmed by this debt, Kenny committed suicide in 2018. His body was found in the East River, right next to the official residence of the mayor of New York.
Singing “No more suicides!” No more bankruptcies! The New York Taxi Workers Alliance (NYTWA), a union of more than 25,000 taxi and app drivers, is on its 39th day of camping outside Manhattan City Hall. The union demands that Mayor Bill de Blasio implement his proposal to tackle the debt crisis crushing thousands of workers who are licensed to drive New York’s iconic yellow cabs. The practice of selling medallions began in the 1930s, with the aim of controlling the number of yellow taxis on city streets.
Driver-owners, 95% of whom are immigrants, each have an average loan balance of $ 550,000. More than 900 have filed for bankruptcy since the medallion price, skewed by predatory lending and speculation, hit an all-time high of $ 1 million in 2014 before collapsing. Since then, 9 drivers have committed suicide.
Hunger striker and owner of the Debt Medallion Richard Chow. Photo: Monica Cruz.
âI am fighting for my brother, for justice,â Richard Chow told me on the eighth day of his hunger strike. âWe cannot afford to repay our loan. We need to end this crisis as soon as possible because all drivers are sick and tired and so hungry. [This fight] is painful. But we are not leaving. We are going to win this, âhe said.
NYTWA Executive Director Bhairavi Desai is also taking part in the hunger strike. She explained that âthe city had a direct role in this debt crisis. And he has to answer for that. She noted, âThe city made $ 855 million from sales of inflated medallions. The banks made their money. The city can fix it. He has to sort it out.
A crisis made by the rich
In a scenario similar to that of the 2008 real estate crash, lenders and taxi fleet owners fabricated an artificial bubble. Between 2004 and 2013, the value of the locket increased from $ 360,000 to nearly $ 1 million. Once considered one of the best investments in the United States, banks and private lenders have given risky medallion loans to drivers who did not understand the terms. The NY Times found that some banks and lenders intentionally overpaid for medallions in order to inflate prices, causing the bubble to explode again. And just like in 2008, government officials not only ignored the warning signs of a looming crisis, they fanned the flames.
The city’s Taxi and Limousine Commission, responsible for licensing and regulating medallion taxis, established opening bids at the medallion auctions, sent direct mailings, and announced to potential borrowers that the medallions were one the safest investments. Instead of regulating the prices of the medallions, it helped to artificially inflate the costs.
In 2014, the city allowed an influx of rideshare companies like Uber and Lyft without any regulations. This had a huge impact on yellow taxi drivers, who saw their income plummet. Before the app redemption, the daily ridership of yellow taxis was nearly 500,000 trips in 2012. Compare that to 2019, when drivers could only log around 230,000 trips per day. Ridership of the famous yellow cabs continued to decline, reaching historically low numbers during the pandemic.
Augustine Tang, a medallion driver on his sixth day of the hunger strike, told his own story of how he joined the ranks of the estimated 4,000 drivers with a medallion debt: âMy father passed away in 2015 and I chose to inherit the locket because of how proud he was, owning a piece of New York. I didn’t know anything about the taxi industry and had to make the decision to take back the medallion with the debt and also take care of my grandmother. What I didn’t know was how much expense is required to own a piece of New York City. Of course, they, the city, you nickel and you support.
He said: âI am fighting for these 6,000 locket owners whose lives have been virtually ruined, these elderly drivers, senior drivers who have lost their retirement, on the verge of losing their homes and the locket related jobs.
The mayor of Blasio stalls on the handing over of a lifebuoy to drivers
Last year, NYTWA proposed a plan to reduce and restructure the medallion debt so that workers can pay it off while still having enough money to live on. The city (or a federal or state entity) would act as a safety net for the restructured loans at $ 125,000. Workers would pay an average monthly mortgage of $ 750 per month.
Bhairavi Desai explained the plan, âWe developed a risk model, which estimates that even if this locket were to be resold for no more than $ 75,000, the only cost the city would bear would be the remaining $ 25,000 on that balance. We looked at the worst case scenario of a 5% default rate, which was at its peak when loans were over $ 600,000, $ 700,000. On average, we sought out 4,000 loans and a low principal of $ 145,000. The cost of the city’s return guarantee under these conditions would only be $ 93 million over 30 years. “
Overall, the plan would cost the city no more than 0.09% of its annual budget of $ 99 billion.
The NYTWA plan has received support from senior municipal government officials including Comptroller Scott Stringer and even nationally elected lawmakers like Senator Chuck Schumer. In total, more than 70 city and state representatives and 12 members of the city’s congressional delegation support the plan. Putting their words into practice, a group of city and state lawmakers were recently arrested in a civil disobedience action in solidarity with owner-drivers.
New York Attorney General Tish James said of the plan: âNew York taxi medallion owners have been economically devastated in recent years, and the New York Taxi Workers Alliance relief program offers a responsible way to help these small businesses and industry recover.
Despite the overwhelming support, Mayor de Blasio has yet to address the NYTWA plan.
Solidarity and struggle generate hope
Mouhamadou Aliyu, a father of four who bought a medallion at an auction in 2004, stressed, âI don’t want my children to experience poverty. I came from CÃ´te d’Ivoire in 1994 to pursue a better life. And this industry is like 95% immigrants, but driving a yellow cab, we always think it’s a safer way for us to get out of povertyâ¦ I’ve never heard of fairness. I have never heard of refinancing. So this system allowed people to take advantage of me.
He went on to describe the conditions that the driver-owners had to face: âThe pain, the suffering, the struggle, it’s unbearable. It’s too much on the human being. You don’t want to take 20, 30, 40 years of your life to believe in something, especially from the town hall, like a license that gives you exclusive rights, that is, they guarantee you to work , to earn a living to improve your family. And then all of a sudden to be crushed, [and all of that] you be taken away.
Despite the struggle, he has hope. “Overall I feel good, I have hope that something good is going to happen.”
Medallion owner Augustine Tang, exhausted from more than a week’s hunger strike, but still determined, said, âWe’re going to stay here as long as it takes. Energy is high. Although our bodies and minds are tired, we are filled with the outpouring of love and support that we receive from the public. “
Monique Cruz is a reporter for the American media Breakthrough News.M