Senate Majority Leader Chuck Schumer took a ride recently with a New York cabbie and New York State Assemblymember Zohran K. Mamdani to bring attention to the cab drivers' fight for debt relief. It's all part of the fallout from the collapse of New York City's taxi medallion system, due to the rise of Uber and Lyft, and also to the pandemic, which severely depressed the demand for cabs. It's a huge debt crisis, which we'll explain further in a moment, but for starters, here's the video, courtesy of the New York Taxi Workers Alliance, the nonprofit union for city cab drivers.

Now, as The Intercept's Ryan Grim noted on Twitter, Mamdani, the state Assembly member Schumer's riding around with there, won the endorsement of the Democratic Socialists of America when he ran, so we can only assume that Chuck Schumer is now on board with Fully Automated Luxury Gay Space Communism of some sort. We wholly approve of this development.

So let's back up a little here: What is all this about, and is assigning me a story about New York City cabbies just another of Yr Editrix's fiendish plots to make me look like a rube from Boise goddamned Idaho who doesn't know a damn thing about the hustle and bustle of la-di-da NYC, with its fancy pigeons and rent control and subway pizza rats? Probably! She likes to see me struggle like Victoria Jackson on SNL trying to report on the Contras and the Sandinistas from Managua, Nicaragua.

Happily, there's an internet, so I can look stuff up, like this story from Jalopnik's Raphael Orlove, who explains in brief how the mess developed, who got screwed, and how New York's government appears to be fucking up the relief plan.

Here in New York, you don't just paint your car yellow and start picking people up off the street. You need a special taxi medallion for your car to be a taxi and pick up hails, and the city limits the number of medallions out there. As you can imagine, with limited supply and strong demand, the value of a medallion could rise. As Uber and Lyft have completely reshaped the taxi landscape here in the city, that value plummeted, and yellow cab drivers are now underwater, struggling to pay off loans on medallions now worth a fraction of what they started as.

For instance, as City & State New York says, the "value of a medallion went from $200,000 in 2002 to over $1 million in 2014, then crashed to less than $200,000 soon after." As it turns out, it wasn't just the arrival of Uber and Lyft that were at fault, but also a fair bit of financial fuckery by bad actors gaming the system, if you can believe that:

For years, taxi industry leaders and lending institutions engaged in deceptive or risky lending practices, artificially driving up the value of the medallions and pushing independent owner-drivers into bad loans.

The New York Times won a Pulitzer for its 2019 investigation into the schemes, too, revealing the ugly details of how immigrant drivers got steered into loans they couldn't afford and were then driven to financial ruin. (Does that narrative sound at all familiar to just about anyone who remembers the home mortgage financial crisis?) At the time of the story, more than 950 owners had filed for bankruptcy, and several had killed themselves.

And if financial scheming involving taxi medallions sounds familiar, that's related to some of the frauding Michael Cohen was charged with, too, although that tends to be overlooked because it had nothing to do with Donald Trump.

Worse, as the Times noted in a story this spring about the city's bailout plan,

During the bubble, government officials worsened the problems by exempting the industry from regulations. The city also chose to fill budget gaps by selling medallions and running ads promoting the permits as "better than the stock market."

The city profited from selling all those medallions, while many drivers were ruined. Hell of a way to run an industry! So when the city got a great big chunk of money from the American Rescue Plan, Mayor Bill de Blasio announced a bailout plan: $65 million to help drivers. But there's a bigass problem. as Orlove explains, with terse headings, even:

What's The City's Plan?

Let drivers borrow $20,000 to pay their medallion debt, and they can borrow another $9,000 for other monthly payments.

What Does This Accomplish?

With some drivers hundreds of thousands of dollars in debt, it doesn't accomplish a lot! All it does, basically, is funnel a bunch of money to big lenders without helping drivers.

The problem is that the $20K loans — even with zero interest — aren't likely to help drivers much, since it'll be up to the drivers to renegotiate their own debts, without any requirement that the lenders accept a deal that would be favorable to the drivers. As New York Taxi Workers Alliance Executive Director Bhairavi Desai explained to The Business of Business, drivers want the city to provide more direct relief instead:

Our proposal has been that the city set up a backstop—if the hedge fund or bank reduced the debt to $125,000, the City of New York would guarantee it, 100% of delinquency. The medallion owners are protected and the banks and hedge fund would be guaranteed $125,000, even if the debt is $300,000 for example. [...]

Even in the [worst] case scenario, our plan would end up costing the city $75 million over 20 years. Our plan is more fiscally sound and would be life-saving. Their plan costs more and does absolutely nothing, offers no relief.

Cab drivers have been protesting the city's inadequate debt relief plan at New York's City Hall this week, and that's why Chuck Schumer is riding around in a cab with a Democratic Socialist, you see. We're starting to like this leftier debt-relievey Schumer, yes we are! It seems like his imaginary couple friends, the Baileys, might have some kids with college debt now, and might even be moonlighting from their insurance jobs with an overpriced, underwater medallion on their cab.

And I'm fairly sure I got through the story without embarrassing myself like some sort of Idaho flyover rube. Now if you'll excuse me, I need to catch the BART to La Guardia.

[Jalopnik / NYT / City & State New York / NYT / City & State New York]

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