NEW YORK, N.Y.—With plummeting medallion values threatening hundreds of yellow-cab owners with bankruptcy, City
Councilmember Ydanis Rodriguez is introducing a bill that would let owners operate two taxis off one medallion.
“Should we save this industry?” he asked at a press conference and rally outside City Hall Oct. 17. About 100 people, mostly owner-drivers, attended.
The city has capped the number of yellow-cab medallions since the 1930s—it’s now about 13,600—in order to limit competition so dozens of taxis aren’t cruising around empty, their drivers burning gas while not making any money. The emergence of Uber and other app-based taxi services decimated that model, adding more than 60,000 for-hire vehicles to the city’s streets. The city Taxi and Limousine Commission projects that the number of “black cabs” will increase by 35,000 in the next year, Rodriguez said.
That has decimated the value of medallions. Prices, which inflated to $1.3 million in 2014, have fallen as low as $150,000, says Nino Hervias of the Taxi Medallion Owner Driver Association. The result is that more than 1,000 owners are now in foreclosure, and he expects that more than 2,000 will be by next summer. “There’s no lending, because financial institutions see so much uncertainty,” he says.
According to city Taxi and Limousine Commission records posted online, 19 of the 35 medallions sold from July through September were foreclosures.
Bagicha Singh bought a medallion for $650,000 seven years ago and is working to pay off a $580,000 mortgage. The League of Mutual Taxi Owners recently raised his interest rate from 3.5% to 5.5%, he says, so it now costs him $6,000 a month in payments, insurance, gas, and maintenance to keep his cab on the road. “It’s very hard for me,” he says. He has to work 12 to 13 hours a day, seven days a week, “to keep surviving. If I don’t, everything will break down.”
He wonders how he’ll be able to take time off for surgery he needs.
Medallion owners say the app-based business model is unfair, because it lets companies make money from taxis without having
to make any investment or pay fees such as the 50-cent public-transportation surcharge. “It is not a fair fight,” Gloria Guerra, who co-owns a cab with her ailing husband, told the crowd.
The rise of black cabs in the 1980s and 1990s didn’t threaten yellow cabs, said Rodriguez, because they were limited to corporate accounts and didn’t cruise for fares. But Uber and other app-based services, because they offer hailing by smartphone, are “picking up people like yellow cabs.”
Adding more yellow cabs isn’t an ideal solution, says Kanchan Das of the Metropolitan Taxi Board of Trade’s Driver Resource Center, because it would mean more cabs competing for fares. But it would give drivers more flexibility in choosing their hours, owners more income, and the city more revenue, he adds.
This bill is only a first step to start a conversation, Rodriguez said. If it’s not enacted, he added, then it’s time to talk about putting a cap on the number of black cabs. All sectors of the industry should “play by the same rules,” he said, and if yellow-cab owners aren’t allowed to add more vehicles, “no one should be able to.”