Relief is coming next month for thousands of New York yellow taxi medallion owners who are drowning in debt — but not as much as city officials previously promised.
Starting Sept. 19, roughly 4,000 medallion owners whose loans are held by the private equity firm Marblegate can apply for their debt to be reduced to $200,000.
Under a deal struck last November between Marblegate, medallion owners and officials under former Mayor Bill de Blasio, the city will make $30,000 down payments on the new loans, leaving medallion owners with $170,000 to pay off themselves.
The final details of the deal were negotiated by city officials under Mayor Adams — and the terms aren’t as sweet as those brokered by his predecessor.
Cabbies who take the deal will pay 7.3% in annual interest instead of 5%, which means their monthly payments cap out at $1,234 instead of $1,122. City officials said the higher rate was the result of inflation.
“Of course it’s disappointing that with inflation the interest rates have gone up,” said Bhairavi Desai, head of the Taxi Workers Alliance. “But the big picture here is that this is life-changing.”
The deal also increases the time cabbies have to repay the new loans from 20 years to 25 years. If a medallion owner who takes the deal defaults, the city has agreed to cover the unpaid debt.
Medallions give yellow taxis the exclusive right to pick up street hails across the city. They were valued at more than $1 million as recently as 2014, around the time companies like Uber and Lyft began to deploy tens of thousands of cars and drivers in the city.
A 2020 City Council report found medallion prices were artificially inflated by predatory lenders as well as TLC officials. The medallion market plummeted when Uber and Lyft brought new competition to town, the report said.
The median sale price of a yellow taxi medallion last month was $140,000.
The plummeting values left thousands of people who owned one of the city’s 13,500 yellow taxi medallions drowning in debt they were unable to pay off. At least eight taxi drivers committed suicide in 2018.
“Our taxi drivers are the lifeblood that keep New York City’s heart pumping,” the mayor said in a statement. “They were promised a path to a better life with these taxi medallions but quickly found themselves going down a pit of financial despair.”
The deal comes as the yellow taxi industry has rebounded more slowly from the pandemic than Uber or Lyft.
City data show 7,156 yellow taxis operated in New York last month — down 37% from July 2019, when there were 11,366 yellow taxis on the streets. Last month, yellow taxis made 102,052 trips, down 50% from July 2019, when yellow taxis made 202,443 trips.
Uber and Lyft, meanwhile, deployed 71,036 e-hail cars in New York City last month, down 16% from July 2019, when the companies had 84,609 cars. Those vehicles made 563,347 trips, down 14% from the 654,230 trips they reported in July 2019.