A deal with New York City’s largest taxi loan holder will save thousands of taxi drivers facing financial ruin after being forced into crushing debt due to operating practices.
Why is this important: New York officials came to the deal after a two-week hunger strike by members of the city’s largest taxi drivers union, which called on the city to expand a debt relief program to the drivers.
How we got here: To drive a taxi in town, drivers must purchase a medallion. But about 20 years ago, some industry leaders began artificially inflating the price of lockets, which the city regulates, a 2019 New York Times investigation found.
- This meant that drivers who wanted to own their cabs had to take out larger and larger loans over the years – reaching $ 1 million at one point – “while lenders pocketed a hundred[s] millions of dollars, “according to the Times.
- After the market collapse in 2014, thousands of drivers faced crushing debt and the loss of their livelihoods. The crisis has led several drivers to commit suicide.
Driving the news: Marblegate, the city’s largest taxi loan holder, has agreed to reduce the amount each driver owes, from an average of about $ 500,000 per driver to $ 170,000, according to the Times. The lender will also reduce the payments to a maximum of $ 1,122 per month.
- As part of the deal, the city will pay Marblegate $ 30,000 for each driver and take responsibility for repaying the loan if a driver defaults.
- Mayor Bill de Blasio’s office said it would work with other lenders to secure the same terms, “which would actually amount to the bailout drivers have been asking for since the debt crisis took center stage in 2018. “, notes the Times.
- âTaxi workers have worked tirelessly to make New York City the most vibrant city in the world, and we refuse to leave them behind,â de Blasio said in a statement.
To note: The New York Taxi Workers Alliance (NYTWA), which has 25,000 members, staged the hunger strike is mostly made up of people of color and immigrants.
What they say : âToday marks a new dawn, a new beginning for a workforce that has gone through so many crises and losses,â NYTWA Executive Director Bhairavi Desai said in a statement.
- âToday we can say that owner-drivers have achieved real debt relief and can begin to get their lives back. Drivers will no longer risk losing their homes and will no longer be trapped in debt beyond it. of their lives, âadded Desai, who also thanked Senator Chuck Schumer (D) for facilitating the deal.
- “The city we love supported us and so we can say today that we have won!”
- “It is heartbreaking that it took so much effort” for the city to recognize the needs of workers, but it is also “so powerful and inspiring to see … the willingness of these drivers to stand up for each other and to put their bodies on the line for each other, âNew York Assembly member Yuh-Line Niou (R), who took part in the 15-day hunger strike, told Axios.
- The deal shows that “we can really prevent and stop and also help” when predatory lending is at stake. “We still have to continue this fight at the state level,” she added.
If you or someone you know is planning to kill yourself, contact the National Suicide Prevention Lifeline at 1-800-273-8255 (En EspaÃ±ol: 1-888-628-9454; Deaf and Hard of Hearing: 1-800-799-4889) or the Crisis Text Line by texting HOME at 741741.