Posted on May 20, 2019
Early Arrival: Taxi Medallion Market was Artificially Inflated Before it Burst
The New York taxi medallion industry was inflated by a group of industry leaders, until it burst, leaving scores of drivers financially destitute. https://t.co/npedvHa9z0
— Documented (@Documentedny) May 20, 2019
Once a steady source of income and stable investment, taxi medallions have plunged in value over the past several years, leading to a spate of driver suicides. While Uber and Lyft’s New York City surge seemed to be the main cause, The New York Times found that a handful of industry leaders artificially inflated the price of taxi medallions and created a bubble that is finally bursting.
From 2002 to 2014, the price of the medallion rose from around $200,000 to over $1 million. Drivers’ income has barely budged in that time. Yet per the Times report, industry leaders still continued to push thousands of drivers toward reckless loans, netting hundreds of millions of dollars before the medallion market collapsed.
The Times investigation found many examples of drivers trapped in these exploitative loans. A Pakistani immigrant ended up with a $780,000 medallion loan when he thought he was just buying a car. A Bangladeshi immigrant said he was told to lie about his income on the application. These practices are not necessarily illegal, but experts say they are on par with, if not worse than, what happened in the 2008 housing market.
Immigrant advocates rallied last week to push New York City to earmark more money for programs that serve the city’s immigrant community ahead of the city’s $92 billion budget allocation for the fiscal year 2020. Steve Choi, director of the New York Immigration Coalition, called for the mayor to expand language program access, improve adult literacy programs, ensure access to legal counsel and healthcare and help conduct an accurate 2020 Census.