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NYC Cabbies Facing Financial Ruin Force City to Consider a Rescue

By zzyzzx following x   2019 Jun 26, 7:42am 563 views   28 comments   watch   nsfw   quote     share    


https://finance.yahoo.com/news/nyc-cabbies-facing-financial-ruin-185841317.html


New York City Council members are considering laws that would bail out hundreds of taxi drivers facing financial ruin as competition from Uber-like vehicles choke city streets and erode their income.

Dozens of Yellow Cab owner-operators marched on City Hall Monday, when some offered tearful testimony describing how their belief in the American Dream was shattered by predatory lenders and city policies encouraging an inflated market for licensing medallions that burst with the unregulated growth of the electronic-hail industry.

“I think about taking my life -- I really do -- and the only thing that stops me is my kids,” Mouhamadou Aliyu, a West African father of four who’s been in New York since 1993, said in testimony to the council. He bought a medallion for $700,000 in 2004 that’s now worth $100,000, he said.

Aliyu said he’s still $54,000 in debt, and his shrinking income isn’t enough to repay his medallion loan, the lease on his cab and the mortgage on his Bronx house. “If I lose my house I’m killing myself, period. Because my house is for my kids, my future, please help me.”

At least nine drivers have killed themselves since late 2017, including one who took a shotgun to his head near City Hall last year, according to Bhairavi Desai, a political organizer who leads the Taxi Worker Alliance. She told council members to cap medallion loan payments at $900 a month, down from the current average of $2,800. She called for a city task force to determine how much a taxi medallion license is worth and to press lenders to forgive any loans above that amount. The average medallion-owning cabbie loses an average of about $28,000 a year, she said.

Council Transportation Committee Chairman Ydanis Rodriguez offered sympathy but didn’t endorse their demands. He invited the drivers to testify, he said, to focus attention on the medallions’ value and the “blind eye” taken by city regulators that may have allowed cabbies to fall prey to predatory lending and other corrupt practices.

“These are small business owners, many of them immigrants who invested hundreds of thousands of dollars into a medallion in hopes of achieving their piece of the American Dream,” Rodriguez said. “We must also find a way to hold the people responsible for this financial crisis accountable. This crisis was no accident, and we must make sure the taxi medallion owners receive justice.”

Rodriguez and Councilman Ritchie Torres, who heads its Oversight Committee, took aim at Bill Heinzen, acting chairman of the city’s Taxi and Limousine Commission, for what they termed the regulatory agency’s failure to protect drivers.

Although Heinzen touted the agency for capping the number of app-based for-hire vehicles at 80,000 last year, Torres focused on the agency’s promotion of medallion auctions in 2014. At that time, the advent of Uber hadn’t yet brought on the collapse of the market and the city advertised the $650,000 licenses to potential owners as an investment that was “better than the stock market,” guaranteeing a “worry-free retirement.”

Torres produced a city memorandum from 2011 warning TLC officials that medallion prices were at risk of collapse. City officials either ignored the advice or weren’t aware of it at the time, Heinzen said.

Also under questioning by Torres, Heinzen said the city had no record of how many drivers had filed for bankruptcy or were at risk of financial collapse.

“I don’t know the exact number,” Heinzen said. “I’m sure it’s painfully high.”
1   CovfefeButDeadly   ignore (5)   2019 Jun 26, 7:54am   ↑ like (3)   ↓ dislike (0)   quote   flag        

Get another job?

Move somewhere cheaper to live?
2   P N Dr Lo R   ignore (0)   2019 Jun 26, 8:15am   ↑ like (1)   ↓ dislike (0)   quote   flag        

zzyzzx says
He bought a medallion for $700,000 in 2004 that’s now worth $100,000
Talk about a scam...
3   willywonka   ignore (3)   2019 Jun 26, 9:31am   ↑ like (4)   ↓ dislike (0)   quote   flag        

If these weren't immigrants or non-white men, no one would give a shit.
4   OccasionalCortex   ignore (3)   2019 Jun 26, 11:41am   ↑ like (3)   ↓ dislike (0)   quote   flag        

P N Dr Lo R says
Talk about a scam...


The scam was rigging the entire system to create artificial scarcities that raised medallion prices to the $700,000 level in the first place.
5   WookieMan   ignore (3)   2019 Jun 26, 12:08pm   ↑ like (2)   ↓ dislike (0)   quote   flag        

OccasionalCortex says
P N Dr Lo R says
Talk about a scam...


The scam was rigging the entire system to create artificial scarcities that raised medallion prices to the $700,000 level in the first place.


Bitcoin?......
6   RC2006   ignore (1)   2019 Jun 26, 12:13pm   ↑ like (2)   ↓ dislike (0)   quote   flag        

Tough shit they fucked up and need to move on, it was a bad investment.
7   HeadSet   ignore (1)   2019 Jun 26, 12:15pm   ↑ like (3)   ↓ dislike (0)   quote   flag        

The scam is requiring a medallion to be a cab driver, then letting Uber/Lyft in a s cab companies with no requirements to own medallions first.

Since NY required these medallions for all cabbies, then let in new taxi companies Uber/Lyft come in without purchasing medallions, they should have put a per ride fee on Uber/Lyft rides to go toward buying out the medallions at the market price of the day Uber/Lyft was let in.
8   HeadSet   ignore (1)   2019 Jun 26, 12:19pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

RC2006 says
Tough shit they fucked up and need to move on, it was a bad investment.


No, the rules were changed. A driver who invested in a $500,000 medallion a couple of years before Uber came along had no choice if he wanted to drive. That cabbie also faced regular inspections and a limit on fares. Now bring in a new cab service that needs no medallion, can charge whatever they like, and then ignores ADA requirements.
9   Iranian_Oil_Burse   ignore (5)   2019 Jun 26, 5:31pm   ↑ like (2)   ↓ dislike (0)   quote   flag        

HeadSet says
No, the rules were changed. A driver who invested in a $500,000 medallion a couple of years before Uber came along had no choice if he wanted to drive. That cabbie also faced regular inspections and a limit on fares. Now bring in a new cab service that needs no medallion, can charge whatever they like, and then ignores ADA requirements.


Does this mean that somebody who has lost money on Sears stock should be compensated because "rules has changed" when AMZN came along?
10   Rin   ignore (3)   2019 Jun 26, 5:51pm   ↑ like (4)   ↓ dislike (0)   quote   flag        

Hugolas_Madurez says
HeadSet says
No, the rules were changed. A driver who invested in a $500,000 medallion a couple of years before Uber came along had no choice if he wanted to drive. That cabbie also faced regular inspections and a limit on fares. Now bring in a new cab service that needs no medallion, can charge whatever they like, and then ignores ADA requirements.


Does this mean that somebody who has lost money on Sears stock should be compensated because "rules has changed" when AMZN came along?



No, because no one needs to buy $500K worth of Sears, Kmart, or any other company's stock to start a store front.

For a cabbie, no one can drive a cab (even if the cab is your day-to-day car but re-painted) in NYC, Boston, and a host of other cities without first, buying into the city ordinance which requires a medallion.

Uber/Lyft have broken the rules because none of them are actually ride sharing programs. This is not an association of co-workers or buddies, giving each other rides. These are unlicensed livery services.
11   Iranian_Oil_Burse   ignore (5)   2019 Jun 26, 5:56pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Rin says
Does this mean that somebody who has lost money on Sears stock should be compensated because "rules has changed" when AMZN came along?



No, because no one needs to buy $500K worth of Sears, Kmart, or any other company's stock to start a store front.

For a cabbie, no one can drive a cab (even if the cab is your day-to-day car but re-painted) in NYC, Boston, and a host of other cities without first, buying into the city ordinance which requires a medallion



You don't need to own the medallion to drive a cab in NYC - most cabbies work for somebody who owns one. Remember Michael Cohen? He owns (owned) shitload of these but never drove a fucking cab.
12   Rin   ignore (3)   2019 Jun 26, 6:01pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Hugolas_Madurez says
You don't need to own the medallion to drive a cab in NYC - most cabbies work for somebody who owns one.


Well yes, I actually know one of those fellas, who owns a fleet, and thanks to the fact that he'd started back in the 70s, he's retired now. As for the rest, sure, you can rent a cab, like a car, and that's how I'd do it.

And as for the others ... well, bankruptcy is an option. As for a bailout, that requires one to be a large bank, like Citigroup, not a small fish in society.
13   Iranian_Oil_Burse   ignore (5)   2019 Jun 26, 6:17pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Rin says
As for a bailout, that requires one to be a large bank, like Citigroup, not a small fish in society.


When something structural is failing you have no choice but fix it. When a cab driver decides that he's now an investor there is no societal need to keep perpertuating his illusion when it bites him in the ass. Life is unfair you say? Yes, it fucking is.
14   Quigley   ignore (0)   2019 Jun 26, 6:22pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

the city is at fault for creating this system. Then the immigrants who bought the medallions. Then the banks who lent them money to do so.
15   Rin   ignore (3)   2019 Jun 26, 6:24pm   ↑ like (2)   ↓ dislike (0)   quote   flag        

Hugolas_Madurez says
perpertuating his illusion when it bites him in the ass. Life is unfair you say? Yes, it fucking is.


Why do you think that I don't have wife/kids? Because I know that they have the ability to live a rentier lifestyle, based on my work, so I choose to be alone and bang hoes, keeping all of my monies for myself.

The problem here is that earlier, the city ordinances were complied with, before Uber/Lyft decided to violate them w/o any countermeasures by the city which created those rules to begin with. Sure, a long time ago, anyone could have driven ppl around but soon, he'd be fined or jailed by his city, for driving an unlicensed taxi. So why does a big company get to lie, saying that it's a ride sharing/friendship thing, when it's clearly an unlicensed taxi?
16   Iranian_Oil_Burse   ignore (5)   2019 Jun 26, 6:24pm   ↑ like (3)   ↓ dislike (0)   quote   flag        

Quigley says
Then the banks who lent them money to do so.


If the medallion itself is a collateral let the bank have it back.
17   Rin   ignore (3)   2019 Jun 26, 6:28pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

And no, the federal govt does not assign vendor licenses to sell online and thus, the AMZN analogy doesn't fly.
18   Iranian_Oil_Burse   ignore (5)   2019 Jun 26, 6:47pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Rin says
And no, the federal govt does not assign vendor licenses to sell online and thus, the AMZN analogy doesn't fly.


It totally does fly, because you don't need a license to drive a cab in NYC - you can be employed by someone who invested in the medallion . Just like you don't have to own a bookstore to work behind a counter in one. Is it expensive to start a bookstore? You betcha. Probably on par with buying a medallion back in a day. What we have here is investors clamoring to be bailed out while pretending they are the "poor cabbies fucked over by the mean city".
19   Rin   ignore (3)   2019 Jun 26, 6:56pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Hugolas_Madurez says
because you don't need a license to drive a cab in NYC - you can be employed by someone who invested in the medallion


Why does one need a medallion? If one owns a car, that's a tool which can be used for business, either for giving ppl rides or delivering something. The whole medallion thing is a city wide monopoly which was only broken by Uber/Lyft illegally, who BTW, didn't invest in any transportation equipment, just Craigslist 2.0.

So what today's owners, a.k.a Uber drivers, are doing is using their asset (daily transportation car) to make money which cabbies couldn't do only a decade ago.

Hugolas_Madurez says
Is it expensive to start a bookstore?


No, I knew one who started a mail order book business back in the late 70s, when all of that stuff was done by catalog and yes, she used her entire house as a storage place. She didn't need to start a bookstore. So her house sufficed as both, a place to live in and a business warehouse.
20   RandalRay   ignore (0)   2019 Jun 26, 7:02pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

Why don’t we open up any city government position to the gig economy. Uber and Lyft have taken over because government officials were “bribed” I mean got contributions to their campaigns from Uber and Lyft. Let government workers get a taste of what it’s like to complete in free enterprise.
21   Iranian_Oil_Burse   ignore (5)   2019 Jun 26, 7:48pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Rin says
Hugolas_Madurez says
Is it expensive to start a bookstore?


No, I knew one who started a mail order book business back in the late 70s, when all of that stuff was done by catalog and yes, she used her entire house as a storage place. She didn't need to start a bookstore. So her house sufficed as both, a place to live in and a business warehouse.


That's not a bookstore. A bookstore (which would be an equivalent of a taxicab in a vein of our imperfect analogy) is a physical location which you can enter from the street, browse the selection and buy a book right then and there. It a ride hailing world the mail order book business is not an equivalent of a taxicab (which you hail on the street and ride it right then and there to whenever you tell it to go) but an equivalent of a "gipsy cabs/minicabs" (which people used pre-book in advance by phone).

Taxicab medallions served the same purpose as a ban on selling goods on the streets w/o license: mostly to raise the entry bar and prevent chaos. (If you happened to visit any ex-Soviet country in the 90s you would understand what I mean). As a side effect it did raise the pricing floor, from which the holders of the medallions/licenses benefited.

Before Internet you couldn't hail a "minicab" on the street because they had to run unmarked (to avoid being punished) and couldn't park in designated zones near hotels, rail stations, airports and such. Now you don't have to see it and the drive doesn't have to see you in order to connect. As soon as the need for taxis to be visible has gone away the city has lost the ability to enforce the licensing requirement. It's not their fault, it's just "Internet has changed everything".
22   Rin   ignore (3)   2019 Jun 26, 8:43pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

Hugolas_Madurez says
Before Internet you couldn't hail a "minicab" on the street because they had to run unmarked (to avoid being punished) and couldn't park in designated zones near hotels, rail stations, airports and such. Now you don't have to see it and the drive doesn't have to see you in order to connect. As soon as the need for taxis to be visible has gone away the city has lost the ability to enforce the licensing requirement. It's not their fault, it's just "Internet has changed everything".


Ok, that's a fair enough argument.
23   Ceffer   ignore (2)   2019 Jun 26, 11:44pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

Gee, the city has to bail out the victims of the city's fee, extortion and regulation racket? Isn't that lemon socialism?
24   APOCALYPSEFUCKisShostikovitch   ignore (40)   2019 Jun 27, 7:55am   ↑ like (3)   ↓ dislike (0)   quote   flag        

Uber won!

Taxi drivers starve and kids die.

Uber fucks more and kids live.

Why does NYC hate success?
25   HeadSet   ignore (1)   2019 Jun 27, 11:12am   ↑ like (0)   ↓ dislike (0)   quote   flag        

you don't need a license to drive a cab in NYC - you can be employed by someone who invested in the medallion

That does NOT make the medallion free, the cabbie in that case has to pay a hefty fee to the owner of the medallion.
26   HeadSet   ignore (1)   2019 Jun 27, 11:17am   ↑ like (0)   ↓ dislike (0)   quote   flag        

As soon as the need for taxis to be visible has gone away the city has lost the ability to enforce the licensing requirement. It's not their fault, it's just "Internet has changed everything".

Wrong again. NYC prohibited yellow taxis for being dispatched by phone orders. Phone orders have been around since the early 1900s. It is not the "internet" that changed things, as taxis can have apps as well. It is UBER/Lyft allowed to come in as taxis without needing medallions, inspections, full time commercial insurance, or ADA requirements.
27   Rin   ignore (3)   2019 Jun 27, 11:23am   ↑ like (1)   ↓ dislike (0)   quote   flag        

HeadSet says
full time commercial insurance


Yes, don't drivers need to buy some gap insurance to cover the difference between what Uber has and their own personal auto policy?
28   HeadSet   ignore (1)   2019 Jun 27, 1:42pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

Rin says
HeadSet says
full time commercial insurance


Yes, don't drivers need to buy some gap insurance to cover the difference between what Uber has and their own personal auto policy?


Uber/Lyft initially wanted drivers to use only their personal policies, and any Uber driver that bought commercial insurance would be taken off the system. Lyft initially told there drivers not to inform their insurance companies they were driving for Lyft. After some backlash, Uber/Lyft were forced to provide limited coverage, and insurance companies like USAA and State Farm now offer TNC (Transportation Network Company) gap coverage in some states. This gap coverage costs about 1.5 times as much as a personal policy. Even so, states like VA, that have these policies available, specifically refuse to require an UBER/Lyft driver to tell their insurance company they are driving TNC. If you get hit by a TNC driver using only a personal policy, good luck. The personal policy will be denied and cancelled, and the TNC insurance will argue about whether the driver was actively TNC or personal. Taxis has full time commercial policies.

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