New York taxi drivers, crushed by debt after years of exploiting lending practices, will be rescued under a new deal announced by the state on Wednesday, a big win for drivers amid several days of hunger strike demanding help.
Mayor Bill de Blasio and Senator Chuck Schumer (DN.Y.) announced the deal, saying they had reached an agreement between the Taxi Workers Alliance and the city’s largest taxi medallion loan holder, Marblegate Asset Management. All taxis in New York must have tin medallions bolted to their caps to allow them to collect passes.
Medallion prices, which are limited in number, began to rise about 20 years ago and surpassed $ 1 million by 2014. Many taxi drivers have taken on huge debts to pay for them, even if they couldn’t afford it. Later that year, the medallion market crashed and many drivers went bankrupt. Some of them committed suicide, prompting investigations into market practices, but not before the drivers were saddled with exorbitant payments.
The deal, which The New York Times notes, could result in the city spending more than $ 100 million in total, will bring each driver’s debt to $ 170,000 from about $ 500,000 on average. The maximum monthly payments will be $ 1,122 for each medallion, and the city will guarantee a loan if the driver fails to meet his obligations. All city drivers can participate in the program.
Driver advocacy groups saw the move as an attempt to protect taxi drivers who help keep New York City’s arteries up and running around the clock.
“Today marks a new dawn, a new beginning for a workforce that has endured so many crises and losses,” Bhairavi Desai, executive director of the New York Taxi Workers Alliance, said in a statement. “Today we can say that the drivers-owners have achieved a real cancellation of debts and can begin to return to their lives. Drivers will no longer be at risk of losing their homes and will no longer be held in debt over and above their lives. ”
In March, officials announced another plan to spend $ 65 million on aid to cabbies, but the program was criticized as too small.
The New York Times published a long series of articles on the plight faced by taxi drivers in 2019, highlighting the years of exploitation of credit methods, with some drivers taking out loans amid promises that debt was a good investment.
The drivers started a hunger strike more than two weeks ago, camped outside the city hall and demanding additional support. Schumer, whose father-in-law drove a taxi in New York, said he was “proud” to be part of a deal that would end excessive debt levels.
“The medallion debt crisis has lasted for years, taking away lives and livelihoods,” Schumer said in a statement Wednesday. “Together, we will bring this current situation to a fair resolution for the thousands of taxi drivers who work every day to serve this city.”
The full cost of the program has not yet been determined.