After protesters embarked on a 15-day hunger strike, New York City announced a city-funded deficiency program to lower monthly payments for taxi drivers who have accrued severe medallion debt.
The city created the medallion system to regulate the number of taxi cabs on the streets. However, unregulated companies like Uber and Lyft have saturated the market, depleting the worth of a medallion. Before these companies took over New York City streets, a medallion was estimated to be worth about $1 million. Now, medallions are worth around $160,000.
Under the new agreement, the largest medallion lender, Marblegate Asset Management, will restructure outstanding loans to $200,000, constituted as a $170,000 guaranteed loan, plus a city grant of $30,000. Debt service payments will be capped at $1,122 per month for eligible medallion owners.
Rep. Alexandria Ocasio-Cortez has been an ardent supporter of a relief program for drivers. Ocasio-Cortez previously spoke to other congressional members about the issue and submitted documents to the congressional record outlining one driver, Muhammed Hoque, who received a $1 million loan when he only made around $23,000 a year.
TW: suicide
Over two years ago, we raised the issue of New York taxi drivers becoming victim to predatory lending schemes. They’re drowning in debt. And, heartbreakingly, some have ended their lives.@NYTWA has been on a hunger strike for over a week. They need a bail out NOW. pic.twitter.com/vTmEBzxGnf
— Rep. Alexandria Ocasio-Cortez (@RepAOC) October 27, 2021
“We’re supposed to act as though this is his fault?” Ocasio-Cortez said in the congressional hearing. “This is criminal behavior, and it has not just happened to Hoque. It has happened to immigrant taxi drivers all over the city of New York.”
The debt that taxi drivers have been saddled with has left them with nothing, with some even taking their own lives.
“These suicides are not just an indirect side effect. They are a direct consequence of the neglect of a vulnerable community in New York City,” Ocasio-Cortez said. “This is not about just predatory collection practices. This is manufactured financial indentured servitude.”
The New York Taxi Workers Alliance (NYTWA) protested outside city hall for weeks to achieve this debt restructuring, and were joined by multiple elected officials, including Astoria Assemblyman Zohran Mamdani.
On Wednesday, Oct. 20, Mamdani and 12 taxi drivers started a hunger strike to demand immediate attention to the “life and death” issue.
“It often takes tactics such as these in order to generate any attention from the political class across our city and state,” Mamdani said. “There is nothing I am unwilling to do if those impacted say that this can be the difference-maker. Over the last few years, nine drivers have taken their lives because of the devastation of the debt crisis. I’ve spoken to many drivers who have contemplated suicide because they are in debt, and they simply do not see a way out.”
Mayor Bill de Blasio previously proposed $65 million in grants that would restructure loan principles and set lower monthly payments to about $1,500 or less per month. However, NYTWA did feel that plan went far enough.
“This plan that the city has put forward is a recipe for starvation and, for many, death,” Mamdani said at the time. “It’s very sad that we have to bring those consequences front and center, but that’s what this moment requires.”
In the past five weeks, de Blasio’s $65 million MRP has helped 173 drivers achieve $21.4 million in debt forgiveness, according to his administration.
“Taxi workers have worked tirelessly to make New York City the most vibrant city in the world, and we refuse to leave them behind,” de Blasio said. “I’m proud to have worked with Senator Chuck Schumer, NYTWA and Marblegate to reach an equitable, sustainable solution that builds on the success we’ve achieved in reducing debt burdens for the hard-working drivers who keep our city moving.”
Schumer helped broker a deal between NYTWA and Marblegate to agree on a relief program for drivers.
“The medallion debt crisis has gone on for years, taking lives and livelihoods,” Schumer said. “I commend de Blasio for his leadership, the NYTWA for their steadfast advocacy and Marblegate for their good-faith effort to forge a workable solution. Together, we will bring this ongoing situation to a just resolution for the thousands of cabbies who work every day to serve this City.”
Bhairavi Desai, executive director of NYTWA, a union of 25,000 taxi and app-based driver members, said it has been a long and painful journey, but they came out victorious.
“Drivers will no longer be at risk of losing their homes and no longer be held captive to a debt beyond their lifetime,” Desai said. “We are grateful to de Blasio for standing with the drivers and putting the might and the faith of the city to fix this crisis.”
Mamdani said the relief agreement will bring much-needed change to the lives of taxi drivers across the city.
“Over these past few months — through a hunger strike, an arrest and having spent night and day in front of City Hall — I have gotten to know many of these drivers and the reasons for their fight,” Mamdani said. “It is through solidarity with each other that we finally got drivers what they deserve.”
