Taxi owners are struggling to pay the mortgage on their medallions, a new lawsuit is claiming.
The value of the once-vaunted NYC taxi medallion, which are the traditional yellow cabs regulated by the Taxi and Limousine Commission (TLC), historically the only taxi permitted to pick up passengers in response to a street hail, has fallen 40 percent. Their value has plummeted from $1.05 million in 2014 to $800,000 this past January.
Behind the lawsuit is Melrose Credit Union, a major medallion-financing agent, who reported delinquencies across its medallion-loan portfolio totaling approximately $168 million, with struggling taxi owners unable to pay. They claim taxi medallions will soon become worthless if the city doesn’t do something about the receiving end of the lawsuit: Uber.
The majority of Uber’s services, save one (uberT), are not allowed to make street hails. But taxi drivers are still suffering. It has been long-maintained by medallion drivers and their supports that the Uber model is effectively an electronic, modern-day street hail. And with each Uber hailed from a New Yorkers’ smartphone, it’s taking money right from yellow cab drivers pockets.
In March, taxi king Gene Freidman, controller of 900 yellow-cab licenses, was sued by Citibank to foreclose on 90 medallions to recoup $31 million in overdue debt. Freidman was able to hatch an 11th-hour deal with Citibank to prevent the seizure of his medallions.
Even working twelve hour days, seven days a week wasn’t enough to grant cabby Jaswinder Singh’s a similar fate. He was struggling to make his medallion mortgage payments, despite never taking a day off due to his not being able to find second-shift drivers, and his car was consequently seized by the bank in April.
“Unless the TLC immediately begins enforcing medallion owners’ exclusive right to hails” and complex “companies like Uber to stop illegally accepting E-hails, the value of the taxicab medallions will continue to drop until it becomes worthless,” said Melrose supervisor Lawrence Fisher in an affidavit.