• Tue. Nov 29th, 2022

Taxi drivers get millions in debt relief, but more is needed

ByElla E. Kidwell

Oct 4, 2022

Struggling taxi drivers got $225 million in debt relief over the past two weeks, but thousands more loans still need to be refinanced after a taxi driver debt crisis, officials said on Friday. officials and lawyers as the deadline for the aid program was extended.

Over 1,000 loans were refinanced in the first two weeks of the program. It was announced last month after drivers asked for help for years to deal with a crippling economic crisis surrounding the city’s famous yellow cabs.

“Every time we raised our hand to hail a cab on a sidewalk, they responded. Now is the time for us to stand with them, and we did,” Mayor Eric said. Adams at a press conference where dozens of drivers lined up. the steps of the town hall.

Still, the main lender participating in the scheme, Marblegate Asset Management, says it has yet to hear from borrowers of around 2,000 eligible loans. About 850 loans handled by other lenders have not been processed, according to Bhairavi Desai of the Taxi Workers Alliance, a union of drivers.

Officials urged drivers with Marblegate loans to inquire before the program’s deadline – now extended by a week, to October 7 – and encouraged other lenders to participate.

For decades, a taxi medallion – a license to operate a taxi – was seen as an accessible asset that allowed a driver to earn a living that could then be sold to fund their retirement. Sen. Charles Schumer’s father-in-law bought a medallion for $3,000 in the 1940s or early 1950s as a “ladder into the middle class,” the Senate Majority Leader said during the Friday’s press conference.

But in recent decades, many drivers have borrowed heavily as medallion prices rose, topping $1 million in 2014. Then they plunged to $200,000 a few years later as Uber and others ride-sharing services have taken a bite out of the yellow taxi sector.

Taxi industry representatives said predatory lenders lured largely immigrant drivers into loans they couldn’t afford and didn’t understand, either to buy medallions or to exploit their capital for a house, a new taxi, a child’s education or other expenses. The lenders have denied wrongdoing. (Marblegate only started lending medallions in 2018, said managing partner Andrew Milgram.)

After buying a locket in 1996, Angel Miqui owed $403,000 at the start of this month and was struggling to make a monthly payment of $2,726 on top of his family’s housing and other expenses, he said. declared. After refinancing under the new program, he now owes $170,000 and pays $1,234 a month.

The agreement gave him hope that he could gradually get out of debt and eventually, perhaps, reduce the 15-hour working day.

“I don’t feel the hook here,” Miqui said, pointing to her throat, “like I used to.”

Under the program, loans are restructured to a maximum of $170,000 each, after a city grant of $30,000. Drivers will pay no more than $1,234 per month on the 25-year fixed-income loans, and their balances are backed by a city guarantee in the event of default.

It looks like a lifeline for Dorothy Leconte, but her lender is not part of the program, she said.

Leconte, who bought his medallion in 1989, said he negotiated some time ago to reduce his monthly payments from $2,600 to $1,750. But the interest rate is not fixed and she expects it to skyrocket next year.

Without a deal like the city’s program, it believes it will have to exit the taxi business in 2024.

“I couldn’t do it,” she said.