For many in the past, taxi cab medallions served as a promise for a secure, comfortable retirement that would aid taxi drivers and their families in making a decent income. With the changes brought by recent years, things have taken a turn for the worse as the worth of taxi cab medallions plummets.
The worth of taxi cab medallions has recently fallen to $100,000 from a high value of $1,000,000, inducing a life sentence of debt to medallion-owning taxi drivers.
The Downfall of Taxi Cab Medallions
For centuries, taxi cab drivers took on the role of being a convenient mode of transportation. With most of them either immigrants or people of color, the presence of taxi cab drivers in New York remains abundant to cater to the transportation demands of various people.
The job of taxi cab driving serves as a resolution for many immigrants to solve their financial problems. Through taxi driving, many people continue to earn a stable income, providing them with the ability to sustain their families. But as time passes, this proves to be more and more untrue as an increasing number of taxi cab drivers fall into debt due to investing in a taxi cab medallion.
The taxi medallion is a necessary physical certificate that allows one to operate a taxi cab. Previously seen as an investment that provides the means to obtain a secured retirement, it’s now the reason for the drowning debt of thousands of taxi drivers due to the continuous downfall of its worth. With debt amounting to hundreds of thousands of dollars, taxi cab drivers continue to suffer as hopes for solving their financial crises decrease.
During the late 1930s, taxi medallions were of high value due to the imposed medallion system of New York City, making medallions rare in stock. From its 1 million dollar value in 2014, its price has now fallen to only $100,000.
One reason for the medallion’s drop in worth is the overwhelming need for ride-share services like Lyft, Uber, and Via. Unlike these services, taxi drivers need to observe strict regulations and rules. (Source: The Guardian)
The Overwhelming Debt of Taxi Cab Drivers
Marblegate Asset Management gave 2,000 medallion-owners monthly loan payment holidays since the middle of March. Marblegate chief investment officer Andrew Milgram states that 70 million dollars out of 215 million dollars worth of debt have been excused, with half of the loans restructured due to the impact of the COVID-19 to New York City. Milgram further explains that monthly loan payments of medallion-owners have decreased from $2,800 to $1,500. (Source: Market Watch)
We are constantly working to restructure loans because we believe it is the best approach to stabilize the industry, bolster drivers’ long-term economic prospects, and return value to our investors.Andrew Milgram
Many taxi cab drivers continue to suffer heaps of debt due to the persuasion that surrounded them to buy a taxi medallion in the past in hopes of securing their families’ future. And although calls for the restructuring of loans have been answered, many continue to struggle as demands for taxi rides remain low and drivers remained chained to their debt due to pricey unwarranted payments.
The conditions now do not warrant such large payments. We have been pushed into that situation by people in power so we want them to correct the situation. It would mean getting my life back, this wasn’t our fault.Erhan Tuncel, Taxi Driver
(Source: The Guardian)