Is the Government's Response to the Taxi Medallion Bubble Bursting Sufficient?
Is the Government's Response to the Taxi Medallion Bubble Bursting Sufficient?
In many films and foreign depictions of New York City, the yellow taxi cabs have always been an iconic representation of the city. Due to this, anyone not from the city usually has a misconception about the true density of operating yellow cabs. However, most city residents know that these same yellow cabs are usually limited to the more extravagant parts of New York. The first and only time I ever set foot in a cab was when I moved here from the Philippines. I had seen many movies and pictures with these yellow cars and as a result, I was excited to see the very same yellow car pick up my family and me from the airport. Since then, public transportation has dominated my options for travel. After all these years of not taking another cab, I found out that one of my close friend’s father was a taxi driver and even more, he owned a taxi medallion. It was only later during this research that I found out that the taxi medallion was actually a license for taxi drivers to operate independently.
As a few ride-hailing apps were popularized, I began to wonder how the taxi industry fared with the competition. After looking into it, I found out about the medallion bubble and how it burst. With this research, I would like to find out how these medallion owners are dealing with the shift in financial situation. I am also especially interested in the government’s response to this incident since the taxi industry is a very important part of the image of New York City. I need to find out how this event occurred since the taxi medallion license is a government-issued item. By the end of this assignment, I hope to have a better understanding of this current event.
“First Taxi Medallion Owners Receive $700,000 in Debt Relief, as $500 Million in Total Relief Expected.” The official website of the City of New York. NYC gov, September 18, 2021. https://www1.nyc.gov/office-of-the-mayor/news/629-21/first-taxi-medallion-owners-receive-700-000-debt-relief-500-million-total-relief
This government article gathers direct quotes from various persons of interest to give context to the recently employed Medallion Relief Program (MRP). For example, they directly reference quotes from the TLC Chairwoman, “Today, the Medallion Relief Program is delivering real debt forgiveness to economically distressed medallion owners.” It exhibits the perspectives of those who worked to address the issue of overbearing medallion loans as well as explains the relief the program provides.
The article is concise; it is unlike the other sources which are drawn out with anecdotal information. It is from a government website that attests to the information it provides, amongst which are the positive connotation of Mayor Deblasio and the TLC Chairwoman associate with the Medallion Relief Program. Their support is not unfounded as MRP does provide relief where there was none before. The article explains that the program will help medallion owners restructure their loans to reduce their monthly payments. This source expresses a solution has been made to the issue at hand. However, based on other articles on the same topic, this program is insufficient to amount to the quality of relief it hopes to achieve. The article is not opinionated but the quotes are taken from biased parties who want to portray this action as performing better than it does. The article merely shows how NYC has addressed the issue and nothing more.
Rosenthal, Brian M. “As Thousands of Taxi Drivers Were Trapped in Loans, Top Officials Counted the Money.” The New York Times. The New York Times, May 19, 2019. https://www.nytimes.com/2019/05/19/nyregion/taxi-medallions.html
The article addresses the malpractice of those who loaned immigrants the money to afford a taxi medallion. The nature of the loans made it inevitable that the medallion owners would end up in a mound of debt. It also expresses the connection between the government's indifference and the current crisis. The author states in the article, “Publicly, government officials have blamed the crisis on competition from ride-hailing firms such as Uber and Lyft. In interviews with The Times, they blamed each other.” The author uses these statements to paint the image of corruption in the government. He goes on to elaborate on those interviews and how the blame is bounced around and never really owned up to despite the overwhelming evidence that the entire system itself is flawed.
This article wasn't published as recently as other sources, however, the author did receive a Pulitzer Prize for the series that this article was a part of alongside his numerous other accolades and affiliation with the New York Times. The author uses quotes from both sides, the medallion owners and the loaners, though the loaners have a more informative connotation whereas the quotes from the medallion owners seem to be included with emotional appeal in mind. The article provides context to the nature of the debt that the medallion owners are in. The loaners preyed on the medallion owners by making unreasonable loans aiming for maximum profit when making these deals with the cases being merely observed by government officials. The medallion owners' ability to pay off these loans depended on the medallion's value and the government drove up the prices until the true value of a medallion could no longer be covered.
“Why Taxi Drivers Are Protesting The City's Medallion Relief Program.” Broadcast. The Brian Lehrer Show. WNYC, October 12, 2021.
This podcast exposes the predatory intent of the loans on immigrants to the listeners. The guest speaker, Birhavi Desai, mentions the positive light that medallions were bathed in. They also explained the skewed nature of having to buy a medallion as opposed to the competition that may do the same as someone who bought a medallion with freedom. The author discusses, “There were only X number of medallions, and that was a fixed number, and therefore, there was scarcity and that made the value so high…when the Taxi & Limousine Commission would set the opening bid and would advertise the value…” This explains why the value of the medallion was so high but the commission exaggerated this value in the price they set for it. Most people had to take out loans in order to afford it and despite the high price many still thought it would be worth it in return. However, it was no longer the case as the price ramped up whereas the value did not match.
Brian Lehrer is the host of the podcast and has been in the industry for over 30 years. In this particular episode, he covered issues regarding taxi medallion loans. His guest speaker and expert on the subject is Bhairavi Desai, president of the New York Taxi Workers Alliance. In 1998, she advocated for better working conditions for Taxi drivers and achieved such. As of recent, she has been an advocate for loan relief of the medallion owners. Bhairavi Desai explains how there were advertisements for the medallion. These advertisements were especially appealing to immigrants since it was advertised as one of the safest investments and the easiest way to a middle-class life. In the show's segment where they take questions from the listeners, Bhairavi explains how the current loan relief policy would not be enough to save the medallion owners from lifetime debt.
I started with a government article and it told me about a relief program that was already in effect. However, as I continued my research, it became apparent that this relief program was not sufficient for many of the people that it was supposed to help.
According to the New York Times article, many drivers have already filed for bankruptcy and many more are following suit. This is an indication that the program is not working as it should. Furthermore, the government is a large part in the occurrence of this incident. It has a responsibility in order to help the people that were negatively affected by its decisions. The podcast, it explains how many of these people were immigrants and the majority of them were swindled into taking these large loans in order to afford the “life-changing medallion” or so it was advertised.
The majority of these cabs are part of the same company, though some drivers bought their medallion to keep the profit for themselves. When these medallions were sold at exorbitant prices, their profits were sizable. They were able to maintain the loans they took out to buy these medallions despite the high prices they bought the medallions at. During this time when the medallion owners were making significant profits, the government drove medallion prices up. Although this benefited the government, these raised prices were an inaccurate representation of their true value. due to more recent developments in other modes of transportation, their income had significantly decreased. In addition, the value of the medallion had also greatly decreased so as a result, these medallion owners currently have no way to pay off the loans that they originally took to buy those medallions.
Although I believe that this information should be available to anyone who was interested like I was, it is especially important for those who took these loans to understand the exact background to their current plight. Some like me may still attribute the decline in value to merely the rise in popularity of ride-hailing apps. While that is definitely a factor, there is more to the build of the situation. It is imperative that these people know that they are putting their trust in the same government that crippled them.