NEW YORK CITY–Was NCUA’s controversial decision to sell off its portfolio of some 3,500 taxi medallion loans the right move after all?
As CUToday.info reported, in February the agency sold the portfolio of loans it had acquired as the result of the conservatorship of failed taxi-medallion CUs in New York for approximately $350 million to Connecticut-based Marblegate Asset Management.
At the time of the sale taxi medallions were selling for approximately one-fifth of their all-time high and the National Credit Union Share Insurance Fund had already taken an approximately $750-million loss as a result of the conservatorships.
The sale led to NCUA board members going to some length to explain the reasoning behind the sale, as many had been calling on the agency to hold off until some sort of public/private partnership might be developed to help struggling taxi medallion owners.
At the time, the three NCUA board members said they have extracted a pledge from Marblegate Asset Management to work with borrowers.
Now, Marblegate likely has no choice.
Long Waits at Airports
New York City cab drivers are reporting that due to the stay-at-home order in the city as the result of the coronavirus pandemic, there is little business to be found, with some taxis sitting for six hours or more at Kennedy Airport just to find one passenger.
Many other cab drivers have stayed home out of fear of being infected with the virus themselves.
“All this at a time when many of New York City’s taxi owners are already in financial ruin after taking out reckless loans to buy medallions — city-issued permits required to own a yellow cab — at artificially inflated prices, with the reassurance of the city’s taxi commission of their high value,” noted the New York Times.
Taxi owners and drivers who were barely holding on told the Times their livelihood had evaporated as the city all but shut down to try to slow the spread of the coronavirus.
Though citywide taxi ridership numbers for March are not yet available, some taxi companies, cab owners and drivers said their rides had plunged by two-thirds or more, according to the Times report.
What the Data Show
The city’s largest taxi group, the Metropolitan Taxicab Board of Trade, which represents the owners of 5,500 yellow cabs, said rides had dropped nearly 91% to a total of 20,596 trips over this past Friday, Saturday and Sunday. That is compared with 217,540 total trips for the same three days three weeks ago.
The New York Taxi Workers Alliance, which represents about 21,000 taxi and ride-app drivers, told the Times a detailed survey of seven members who are taxi drivers found they earned an average of $368 — not including expenses, gas or taxes — from March 15 to March 21, a 71% drop from $1,260 two weeks earlier.
Representatives of the Alliance were on hand at two NCUA board meetings ahead of and on the day of the sale of the portfolio calling for some sort of workout plan for its members.
Bhairavi Desai, the alliance’s executive director, told the Times the group has received calls from dozens of taxi drivers who can no longer afford to pay for necessities like groceries and medicine.
Immediate Help Sought
According to separate reports, taxi drivers and rideshare drivers in other major cities are also reporting significant reductions in ridership.
In New York, taxi drivers are seeking immediate help in the form of interest-free city loans and partial forgiveness of medallion loans, as well as suspension of efforts to collect overdue payments.
New York City has about 200,000 for-hire drivers licensed by the Taxi and Limousine Commission.