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60+ Elected Officials Call on Mayor to Save Taxi Drivers' Lives by Adding a City-Backed Guarantee to the Medallion Owner Debt Relief Program
October 13, 2021
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______________
October 13, 2021
Mayor Bill de Blasio
City Hall
New York, NY 10007
Dear Mayor de Blasio,
In solidarity with the New York Taxi Workers Alliance and its 25,000 members, we call on New York City to add a city-backed guarantee to the Medallion Owner Debt Relief program.
The need for debt relief has been clear for years: yellow cab medallion owner-drivers are steeped in debt and poverty, exploited by predatory lending that the City allowed. As a city, we have 1 both a moral obligation to solve this crisis and the resources to do so. Our failure to act will be a moral stain with grave consequences.
It is not hyperbole to say providing this debt relief is a matter of life and death. In the past few years, at least nine drivers have died by suicide. Of those drivers, a disproportionate 2 number—three of the nine—were owner-drivers, despite the fact that they make up only two percent of the workforce. The stress of the debt is unbearable on owner-drivers and their families. They did not put themselves in this predicament; the City marketed medallions as a path to stability and the middle class. Drivers did all that was asked of them but, in return, they were taken advantage of: officials knowingly inflated the value of medallions, and the City made $855 million in medallion sales—all on the backs of a workforce that is primarily immigrants of color. This, coupled with the unregulated influx of Lyft and Uber wiping out 36% of their 3 revenue, has left thousands of owner-drivers with an average debt of $550,000.4
On March 9, 2021, the City and the TLC announced a debt relief program: a proposal that offers owner-drivers up to $20,000 to use in negotiations with their lenders to restructure their debt. But based on the recently published TLC rules for the Medallion Owner Debt Relief program, thousands of owner-drivers who have an average debt of $550,000 may at most have their debts reduced to a staggering $330,000. This would leave drivers with an astronomical monthly 5 mortgage of $2,000. Owner-drivers will be consigned to earning poverty wages, stuck in life-long debt. This is unacceptable.
The city must supplement the current proposal by adding a city-backed guarantee. The New York Taxi Workers Alliance has developed a proposal that would require lenders to restructure to a set amount and terms designed to provide drivers with a manageable, maximum monthly payment of no more than $800 a month. In exchange, the city would guarantee the restructured loan. In the 6 event of a foreclosure, a lender would be obligated to make a good faith effort to resell the medallion for the highest market value. The city would only be liable for the guaranteed loan if there was a balance left on the loan following a sale.
In the highest-cost scenario—in which 4,000 loans are guaranteed at $145,000, with a static resale value of $75,000 for medallions—this plan is projected to cost an average $3 million a year, for a total cost of $93 million over thirty years. NYTWA’s plan has been vetted by numerous experts; in addition to being found fiscally sound, it provides meaningful debt relief to owner-drivers while simultaneously ensuring that, if they do default, owner-drivers are no longer at risk of losing their home or having their wages garnished.
Yellow cab drivers have generated $1.2 billion of funds for the MTA throughout the years, and the $855 million the City raised through medallion sales have paid for vital services for all New Yorkers. We have all benefited from the hard work and sweat of owner-drivers.
Now, it is time to repay our debt to the drivers who keep our city running. The City has the resources to solve this crisis; we must heed our moral duty and do so. Adding a city guarantee to the proposed program will protect owner-drivers against risk and will incentivize lenders to reduce the debt to a sustainable and manageable amount. Let us ensure that an essential and iconic New York industry not only survives, but provides a life of dignity and respect to the workers who make it possible.
Sincerely,
Zohran Mamdani
Assembly Member
Jessica Ramos
State Senator
Felicia Singh Shahana Hanif
Councilmember-Elect Councilmember-Elect
Shekar Krishnan
City Councilmember-Elect
Brain Barnwell
Assembly Member
Charles Barron
Assembly Member
Charles Braunstein
Assembly Member
Kenny Burgos
Assembly Member
Robert Carroll
Assembly Member
Michael Cusick
Assembly Member
Catalina Cruz
Assembly Member
Carmen De La Rosa
Assembly Member
Jeffrey Dinowitz
Assembly Member
Simcha Eichenstein
Assembly Member
Harvey Epstein
Assembly Member
Charles Fall
Assembly Member
Phara Souffrant Forrest
Assembly Member
Mathylde Frontus
Assembly Member
Emily Gallagher
Assembly Member
Deborah Glick
Assembly Member
Jessica González-Rojas
Assembly Member
Andrew Hevesi
Assembly Member
Ron Kim
Assembly Member
Marcela Mitaynes
Assembly Member
Yuh-Line Niou
Assembly Member
Daniel O’Donnell
Assembly Member
Chantel Jackson
Assembly Member
Nick Perry
Assembly Member
Jenifer Rajkumar
Assembly Member
Karines Reyes
Assembly Member
Robert Rodriguez
Assembly Member
Daniel Rosenthal
Assembly Member
Linda Rosenthal
Assembly Member
Nily Rozic
Assembly Member
Rebecca Seawright
Assembly Member
Amanda Septimo
Assembly Member
Jo Anne Simon
Assembly Member
Clyde Vanel
Assembly Member
Latrice Walker
Assembly Member
David Weprin
Assembly Member
Alessandra Biaggi
State Senator
Jabari Brisport
State Senator
Leroy Comrie
State Senator
Michael Gianaris
State Senator
Andrew Gounardes
State Senator
Brad Hoylman
State Senator
Robert Jackson
State Senator
Brian Kavanagh
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Timothy Kennedy
State Senator
John Liu
State Senator
Roxanne Persaud
State Senator
Gustavo Rivera
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Julia Salazar
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José Serrano
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Brad Lander
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Carlina Rivera
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Jimmy Van Bramer
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Alexa Aviles
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City Councilmember-Elect
Tiffany Cabán
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Chi Ossé
City Councilmember-Elect
Lincoln Restler
City Councilmember-Elect
Lynn Schulman
City Councilmember-Elect
Sandra Ung
City Councilmember-Elect
Julie Won
City Councilmember-Elect
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