Taxi Medallion Crisis Drives Council Candidates on Road Toward a Rescue
Some seeking office have been shaped by family suffering in the yellow-cab medallion financial collapse — or their own experiences driving cabs. They say only a bold bailout will avoid calamity.
This piece was published in partnership between THE CITY and The Fuller Project.
A new generation of South Asian City Council candidates is reviving momentum to support cab drivers in crisis, after a year of little action to pull them out of staggering debt.
The candidate lineup includes a taxi driver and an organizer running in Brooklyn and two daughters of drivers in Queens.
Bhairavi Desai, executive director of the 21,000-driver New York Taxi Workers Alliance, said the Council hopefuls represent a “fighting chance” for cab drivers.
“They’ve seen their parents struggle or they themselves struggle and they’ve seen the necessity for working-class voices,” Desai said.
Prior to the pandemic, the taxi industry was already in freefall. The resale price of city-issued taxi medallion permits zoomed to over $1 million, only to plummet as Uber and other ride-hailing services zipped in.
Risky lending saddled drivers with huge debts eclipsing the medallion’s worth, and cab drivers — mostly immigrants — found themselves caught between debt bills and dwindling business, a crisis highlighted in a Pulitzer-winning New York Times series. At least nine drivers have committed suicide.
A Daughter’s Fight
Felicia Singh, 32, knows the pain of crushing debt well.
Her 66-year-old father, Dalip, bought his medallion for $250,000 in 1987, before she was born, and debt has dogged him since. After suffering a stroke, he borrowed $750,000 against the medallion’s value in 2014, signing away his right to fight back in court if he couldn’t keep up with the payments.
Dalip Singh defaulted on that loan in 2016 but, his daughter says, kept his medallion. Then came Uber and Lyft, whose app-based rides rocketed past the number of yellow taxi trips by the following year.
He filed for bankruptcy. His medallion was seized. A bankruptcy court put a “For Sale” sign outside their Ozone Park home, with the family told they had to procure $100,000 in three months to save the house.
With community financial support, her parents have warded off the foreclosure for now, said Singh.
“But it’s a really, deeply, deeply sad place to be,” she said. “And there were 950 plus medallion owners who filed for bankruptcy before them, before the pandemic.”
Now she’s running for City Council, in the Democratic primary to replace term-limited Eric Ulrich (R-Queens). Singh has watched as Mayor Bill de Blasio and the Council have talked about aiding taxi drivers and taken modest measures but stopping short of repairing the economic calamity befalling medallion owners and their families.
In March, de Blasio announced a $65 million debt relief fund, and the city Taxi & Limousine Commission steers drivers in financial trouble to a resource center for counseling. The Council has capped the number of cars authorized to use ride-hailing apps.
But Singh and other candidates say the crisis has only deepened during the pandemic and demand immediate action to reduce medallion owners’ debt and restructure loans. With the turnover of City Council and a new mayor on tap, there’s an opportunity for change, Desai said.
“When you have a leftist who already has their own reasons to champion you, then hopefully, you know, it’s a real shift in the ground,” she added.
City Hall Role
New York taxi drivers are a largely immigrant workforce. According to the Taxi and Limousine Commission’s 2020 Fact Book, 40% of yellow cab drivers in the city are from Bangladesh, Pakistan or India. Cab drivers’ average age: 50.
Not every driver owns one of the more than 13,000 medallions, but those who do often carry staggering debt – more than $500,000 on average, according to the Taxi Workers Alliance.
Mamnun Haq, 58, became a taxi driver in 1993, soon after moving to the United States. Sixteen years ago he was stabbed by a passenger with a hunting knife. It marked a galvanizing moment for the movement to organize taxi workers, who are more likely to be murdered than die in a car crash.
Now the Kensington resident and co-founder of the Taxi Workers Alliance is running for Council, for the seat currently held by term-limited Councilmember Brad Lander (D-Brooklyn), who is running for comptroller.
Haq noted that City Hall sold the medallions in the first place and then ignored taxi workers’ repeated calls to limit the number of ride-sharing vehicles on the streets. He said the city should now sharply cap principal and mortgage payments.
That’s the essence of a proposal from the Taxi Workers Alliance: a debt restructuring plan under which a government entity would serve as a backstop as medallions get repossessed and sold at auction — stepping in to buy back medallions and resell them, with loans limited to $125,000 and a maximum payment of $750 a month.
Counting the substantial up-front cost of paying lenders the balance of debt owed as well as future income from the resale of thousands of medallions, the alliance contends the scheme would require a public-sector commitment totaling $75 million after 20 years.
In contrast, de Blasio’s more modest program provides interest-free loans of up to $20,000, plus $1,500 in monthly payment subsidies for up to six months, that owners can use to entice lenders to reduce and restructure their debt.
While the headline figures of the two competing plans are only $10 million apart, taxi worker advocates say the biggest difference is in how the money is used. They say the NYTWA plan would use the money to pay off the debt, reclaim the medallions, and let taxi workers have a fresh start, while the mayor’s primarily uses the money to continue interest payments to lenders, extending the debt crisis instead of resolving it.
Haq contends the mayor’s plan continues to treat the city’s immigrant taxi workforce as expendable, providing inadequate relief after decades of looking the other way as “predatory lenders” made fortunes off a medallion bubble he says industry players inflated aggressively.
“Medallions don’t grow on trees like market vegetables,” Haq said. “The garage owners and brokers became the main owners of medallions. They may have lost their medallion business, but they didn’t actually lose anything — they just gained, gained, and gained. They took that money.”
The City Council has attempted to tackle the crisis but so far shied away from sweeping action to help medallion owners in deep debt.
The Council in 2018 convened a task force, which released a report in January 2020 recommending measures to aid drivers and keep the profession viable. A key proposal called for the city, with nonprofit and private partners, to buy medallions back from drivers, forgive some of the debt, and then resell the medallions later on when the price stabilized.
“The yellow taxi is an iconic New York City institution that has served as a ladder to the middle class for countless New Yorkers and a reliable mode of transportation for decades,” the report reads. “The need for action is urgent.”
There has been little movement over the last year.
Councilmember Stephen Levin (D-Brooklyn), one of the task force’s co-chairs, said that the pandemic dampened momentum for a public-private partnership to take on medallion debt.
“COVID really upended that process because we couldn’t very well go to any banks and say, you know, are you willing to invest?” Levin said, noting that business for taxi drivers dropped even more precipitously during the pandemic.
The task force estimated more than $1 billion in combined medallion debt across the industry.
Meanwhile, the mayor’s loan restructuring program is currently refining operational details pre-launch, according to the mayor’s office.
Mitch Schwartz, a spokesman for de Blasio, said that the administration believes every driver-owner should take advantage of the initiative, which he described as the “most effective way to connect owner-drivers to the relief they deserve.”
Over the last few months, the New York Taxi Workers Alliance has regularly protested the mayor’s plan, which Desai described as a cash bailout for lenders that does not adequately address the scale of the debt drivers hold.
On May 20 at noon, a dozen drivers parked their yellow cabs outside of City Hall and assembled on the sidewalk next to a large red sign painted with the letters “SOS.” The drivers, who were mostly older men of color, chanted for hours that the “Mayor lies” and that “Drivers die.”
No South Asians
Jaslin Kaur, who’s 25 and lives in Glen Oaks, Queens, is running for City Council, to fill the seat vacated by term-limited Barry Grodenchik. She is also the daughter of a taxi driver, Partap Singh, 62, who has worked in the industry for three decades.
Seven years ago, the medallion market crash meant Kaur’s family was no longer able to pay for college. They relied on food stamps. Kaur, then enrolled at New York University, was forced to drop out.
In order to complete her degree, she took out a loan. She then went to Nassau Community College and ultimately finished her Bachelor’s degree in gender studies at CUNY Hunter College in 2019.
She’s still paying off the loan and struggles with cascading bills.
She said that if she’s elected, she will work with the Taxi Workers Alliance to establish debt relief and retirement funds for drivers — and go further.
“I would not only move the NYTWA financial plan forward, but provide the material resources drivers need,” said Kaur, 25, of Glen Oaks. “That includes mental health services in multiple languages and food assistance, especially for our aging workforce.”
However well-meaning, the current Council isn’t equipped to address the crisis, Felicia Singh suggested.
“We don’t have any South Asian representation in the City Council at all. Zero,” said Singh. “So our stories and our narratives and our ways of life are missing from how we build legislation and that’s really sad.”
Unless debt is restructured in a significant way, Singh said she believes her father is “going to be working forever just like a lot of senior taxi drivers.”
“My dad will say, ‘I didn’t eat today because all I made was $20,’” Singh said. “The medallion was supposed to be a pension, a retirement fund.”
Anwarul Azim, a 51-year-old resident of Bensonhurst, bought his medallion in 1994, and borrowed more against it as the interest payments grew, hoping his income would eventually catch up. It didn’t.
“I’m in trouble, and so is everyone else, more or less,” Azim said.
Ride-share apps and COVID-19 wrecked those hopes for Azim and thousands of other taxi drivers: The Taxi and Limousine Commission says 11,418 yellow cabs were active in February 2020 before the city shut down due to the pandemic; by June only 2,965 remained on the road.
Azim hasn’t been able to make any loan payments since the pandemic began. He’s at an impasse with Marblegate, a private equity firm that holds rights to collect much of the debt in the industry. He says they are asking for a $300,000 lump sum to pay off the loan at once, or monthly payments of $1,600 to be refinanced after five years.
“I’m saying this is impossible. I can’t agree to this,” he said. “It means they want to keep me tied to the loans forever.”
Marblegate says it has forgiven $140 million in debt on approximately 800 medallions, and is continuing to do so through refinancing and restructuring.
The de Blasio proposal has been a massive disappointment for him. “What he did is all for the banks, it’s 100% for the banks,” Azim said.
For many drivers, this election is becoming a referendum on whether the city is working for its marginalized communities.
In several immigrant neighborhoods, people of color are campaigning on platforms focused on the needs of minorities, looking to address issues they say have been neglected for too long by white representatives who don’t feel the need for change acutely enough.
Shahana Hanif, 30, worked as a staffer for Lander. Now she’s running against Haq and five other candidates for Lander’s Council seat, drawing from her experiences of community mutual aid.
Her mother used to host a makeshift space in their home for neighborhood women to seek refuge from abusive partners because of the city’s failure to provide services for those women. She said the mayor’s current plan for taxi workers highlights the disconnect for her: “It’s rooted in more loans.”
“The taxi medallion crisis is something the city manufactured,” Hanif said. “And no one has stepped up to apologize or to undo this.”
That several Council candidates have backed the Taxi Workers Alliance proposal gives Azim some hope that his circumstances might improve. He doesn’t believe retirement is a possibility otherwise. Declaring bankruptcy is more likely.
“I’m worried, living in uncertainty,” he said. “My debt will never be paid off. I don’t know how I’ll survive, but I’ll have to figure it out. I’ll have to figure out a way to survive.”