Taxi to the dark side

  

Mother Jones

On Wednesday, taxi drivers, local elected officials, and their allies gathered outside New York City Hall to announce the beginning of a hunger strike. They are protesting a plan announced last month by the de Blasio administration to help taxi drivers reduce their debt burdens—a plan that the New York Taxi Workers Alliance, the 21,000-member group leading the hunger strike, considers insultingly inadequate.

As a Pulitzer Prize–winning New York Times investigation established in 2019, lenders, medallion brokers, and city officials spent years taking advantage of a scheme to inflate the prices of the taxi medallions that let New York City drivers operate cabs. The victims were the mostly immigrant cab drivers now left with hundreds of thousands of dollars of debt. There have been three suicides by owner-drivers in recent years.

I spoke with two of the roughly dozen hunger strikers a few minutes after they stopped eating. Zohran Mamdani, who came to New York from Kampala, Uganda, at age seven, wore two pins on his lapel: the red rose of socialism and another reserved for members of the New York state assembly. He has represented a northwest Queens district since January. 

At 63, Richard Chow is more than 30 years Mamdani’s senior. After moving to New York in 1987, he bought his taxi medallion for $410,000 in 2006. He still owes almost all of that money because of interest payments and the need to take out further loans to buy new cabs. His brother, Kenny, bought his medallion for more than $750,000 in 2011. Crippled by debt, he died by suicide in 2018.

On Wednesday, taxi drivers, local elected officials, and their allies gathered outside New York City Hall to announce the beginning of a hunger strike. They are protesting a plan announced last month by the de Blasio administration to help taxi drivers reduce their debt burdens—a plan that the New York Taxi Workers Alliance, the 21,000-member group leading the hunger strike, considers insultingly inadequate.

As a Pulitzer Prize–winning New York Times investigation established in 2019, lenders, medallion brokers, and city officials spent years taking advantage of a scheme to inflate the prices of the taxi medallions that let New York City drivers operate cabs. The victims were the mostly immigrant cab drivers now left with hundreds of thousands of dollars of debt. There have been three suicides by owner-drivers in recent years.

I spoke with two of the roughly dozen hunger strikers a few minutes after they stopped eating. Zohran Mamdani, who came to New York from Kampala, Uganda, at age seven, wore two pins on his lapel: the red rose of socialism and another reserved for members of the New York state assembly. He has represented a northwest Queens district since January.

At 63, Richard Chow is more than 30 years Mamdani’s senior. After moving to New York in 1987, he bought his taxi medallion for $410,000 in 2006. He still owes almost all of that money because of interest payments and the need to take out further loans to buy new cabs. His brother, Kenny, bought his medallion for more than $750,000 in 2011. Crippled by debt, he died by suicide in 2018. 

 

About how much is the medallion you paid $410,000 for worth today

 

 Richard Chow: Now medallions are only $75,000. We’ve been underwater for so many years. The city created this crisis

 

What are the de Blasio administration and the Taxi & Limousine Commission (TLC) proposing to do about it? 

 

Assemblymember Zohran Mamdani: They have a $65 million plan. It’s one that would provide, for drivers that are eligible, around $20,000. The issue with this plan is that it allows for monthly payments of up to $2,000 a month. It allows for the principal to be up to $330,000. It allows for the conditions of the very crisis it’s supposed to be resolving.

 

 People who haven’t followed this closely might think Uber and Lyft are 100 percent responsible for this problem. That’s not the full story. What happened? 

Mamdani: I used to be one of those people. I used to think that it was Uber and Lyft that drove yellow taxis into the ground, and that they were the true villains. Let’s be clear, they are villains in this story, but they are not the only ones.

In 2001, [then–Mayor Mike] Bloomberg gets into office and has a $3.8 billion shortfall. He identifies taxi medallions as a way to make revenue for the city. The city then makes $855 million off medallion sales, additionally implementing a 5 percent transfer. Then the city sets the opening bid at every auction. The city is artificially inflating the value of these medallions. The city has an internal review that says the cost of the medallion is outstripping the actual value because for decades the medallions cost around $200,000. No change in the market and now it’s four to five times the worth? It’s completely nonsensical. 

“The city created a bubble, then Uber and Lyft came in. We couldn’t survive. That’s why my brother committed suicide.”

As all of this is happening, they also let Lyft and Uber come in with no regulations. The worth of these medallions is predicated on the fact that there is a closed market. Uber and Lyft are only allowed to be villains because the city let them. It’s the culpability of the city again and again and again.