New York City Mayor Eric Adams has unveiled a new relief package aimed at easing the burden of debt for taxi owners attributed to medallions.
A taxi medallion – a physical license or license plate that allows drivers to drive a taxi – has long been touted across the country as a smart investment for taxi drivers, but the price of a medallion has jumped in New York, reaching over $1 million in 2014.
Medallion’s value plummeted by $1.2 million in 2014 with the rise of Lyft Inc. and Uber Technologies Inc., leaving thousands of yellow cab owners deeply in debt.
“For many it was the savings of a lifetime, the retirement of a lifetime, but after Uber and Lyft were allowed in without regulation and they flooded the streets with vehicles, the value really went down. dropped from $1 million to less than $200,000,” Bhairavi Desai, executive director of the New York Taxi Workers Alliance, said. CBS2 New York.
The Medallion Relief Program is the final product of the agreement. The agreement was reached between the city government, NYTWA, the New York City Taxi and Limousine Commission and Marblegate Asset Management – the largest lender of taxi medallions – and provides loan forgiveness to more than 3,000 owners of medallions.
“Our cab medallion owners and drivers have always moved New York City, and it’s finally time to pay with real debt relief for owners in need,” Adams said, according to a Press release. Taxi drivers owed a medium $600,000 debt owed to medallions in 2021.
The debt relief program will allow medallion owners to renegotiate loan agreements, restructure outstanding loans to $200,000 and reduce monthly payments.
An additional $30,000 in grants will be applied to deposits.
“We wish it had gone a lot faster,” Desai said. gothamist. “One of the consequences of this delay is that the interest rate, which we had agreed at 5% in November, will now go up to 7.3% taking inflation into account…but overall, It’s a huge win for us.”
The new loan will bear an interest rate of 7.3% for a term of 25 years. Monthly payments will be capped at $1,234.
Taxi drivers welcomed the historic deal after years of devastation, suicides, protests and hunger strikes.
Richard Chow, who worked as a taxi driver for 17 years, had a debt of $400,000. Her brother, who had a debt of $580,000, committed suicide.
“If my brother were alive today, I think he would be the happiest person,” Chow said. CBS2
New York. “Now a little too late, you know? I lost my brother. I hope he rests in peace.”
The loan reconstruction process will begin immediately and closing of reconstructed loans will begin on September 19.