After a two-week long hunger strike, taxi drivers got a better debt relief deal from New York City. The city said that Marblegate, the largest medallion lender, will restructure outstanding loans to $200,000, capping debt payments at $1,122 a month, a significant improvement over an existing debt relief plan—plus the city will guarantee all taxi drivers' debt.
The deal was announced by Mayor Bill de Blasio, NYC Taxi and Limousine Commissioner Aloysee Heredia Jarmoszuk, and Senate Majority Leader Charles Schumer. Drivers and their union, the New York Taxi Workers Alliance, had criticized an earlier iteration of the program which led to some drivers paying $2,000 a month and did not include the city as a guarantor of drivers' debt.
The Taxi and Limousine Commission told Gothamist that, as of Wednesday, 173 driver-owners—individual drivers who own no more than five medallions—have been approved to get their loan restructured at a lower rate or settled the loan altogether.
The city wouldn’t provide a specific breakdown of every loan for Gothamist to see what the exact changes were, citing confidentiality, but, said all together, these drivers owed $52.3 million and as a result of negotiations between the city’s lawyers with the New York Legal Assistance Group, and 12 different lenders, $21.4 million of that debt was cancelled.
The city added that 24 of those drivers had all of their debt forgiven altogether, but it didn’t say what the starting balance was for those accounts. For the other drivers that have participated in the city’s program, they saw their debt go down between 20% to 71%, and their monthly payments are now below $1,600, with most drivers paying between $1,000-$1,600 a month.
More than 1,124 drivers have already had initial interviews with the city and its lawyers to participate in the program.
For driver Mouhamadou Ailyu, who still owes $650,000 dollars on his medallion loan, this is a relief.
"It’s a new beginning, I’m free. It means everything to me, I got my lift back," he said.
“After a long and painful journey, we made it home to victory,” said Bhairavi Desai, Executive Director of New York Taxi Workers Alliance. "Today marks a new dawn, a new beginning for a workforce that has struggled through so much crisis and loss. Today, we can say owner-drivers have won real debt relief and can begin to get their lives back. Drivers will no longer be at risk of losing their homes, and no longer be held captive to a debt beyond their lifetime."
The cost of yellow cab medallion, the permit to operate a taxi in New York City, had soared to $1.2 million in 2014, with figures like the late "Taxi King" Gene Friedman driving up their prices—but the entry of Uber, Lyft, and other app-based for-hire vehicles has driven medallions to about $100,000. In 2018, eight taxi drivers took their lives, under crippling taxi medallion debt.
Driver Rajeev Kaushik bought his medallion for $500,000 and tried to restructure his loan multiple times. He defaulted on the remaining $330,000 loan last year. He said last week, before this deal was announced, "They don't want to come to any kind of deal, so I have no option."
The $200,000 restructured loan breaks down to $170,000 in a guaranteed loan and a $30,000 grant from the city, with the loan at a 5% interest rate and a 20-year term, according to a press release, which also said, "The City will provide funding for a guarantee on the principal and interest for these loans and will work with all other medallion lenders to achieve the same terms."
The NYTWA also said that drivers who might not be able to pay their loans could be forced to give up their medallions, but "will be protected from foreclosure on their homes or garnishment of their bank accounts."
The city's original debt relief plan was estimated at $65 million; this expanded version may be an incremental $2-3 million per year, or around $100 million total, according to Assembly Member Zohran Mamdani's office.
Mamdani, who joined the taxi drivers on the hunger strike, hailed the new relief deal. "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. They fight to put food on their family’s table, to keep their homes, to send their kids to college, to fight for those we lost to suicide, and to live a future free of the devastation of the debt crisis. To many, it felt like there was no way out," he said in a statement. "It is through solidarity with each other, that we finally got drivers what they deserve."