NEW YORK–Taxi-medallion owners driving cabs in this city continue to protest terms of their loans and call for financial relief, even as the city and the company that bought a huge portfolio of medallion loans from NCUA have indicated little relief will be forthcoming.
The coronavirus pandemic and work-from-home orders have crushed demand for cabs in New York, with the city’s Taxi and Limousine Commission reporting Yellow Cabs handled 92% fewer rides in June 2020 vs. June 2019. The lack of demand is on top of the dire situation already created by competition from Uber and Lyft, which has driven down the values of taxi medallions into the low six figures from their peak in the seven figures. That has left many medallion owners deeply in debt and upside down in the loans.
For example, Mouhamadou Aliyu, 48, bought a yellow taxi medallion at a 2004 city auction for $331,00 and now owes $632,000 after refinancing, according to the New York Post, which noted Aliyu was already struggling with his $2,452 monthly payments before the pandemic.
‘It’s Empty, It’s Nothing’
“This city has never been like this. It’s empty. It’s nothing,” Aliyu told the Post. “There are no airports. There is no Times Square. People are not going back to work. There are no museums. We depend on tourism, and there is no tourism right now.”
Aliyu said his loan is held by Aspire Federal Credit Union, which offered to reduce his payments to $250 per week until the end of February, but he’s unable to even pay that.
“They call me every day to try to collect,” he told the publication. “I tell them I am not working. I have no money. What am I supposed to do?”
Bhairavi Desai, president of the New York Taxi Workers Alliance, has for months asked the mayor to help struggling cabbies to refinance their medallion loans by guaranteeing up to $125,000 if a medallion owner defaults or is foreclosed upon, according to the Post. Desai said medallion loans must be refinanced so drivers pay no more than $750 per month, and claimed the plan would cost the city no more than $75 million over 20 years.
Lenders have been foreclosing on the medallions at a record rate since the start of 2019, according to the Post, and while the Taxi and Limousine Commission halted all medallion foreclosures in April and May during the pandemic, records show 68 were foreclosed on from June through August, the Post reported.
“What we’re asking the city of New York to do is act as a backstop,” Desai told the Post. “It incentivizes the lenders to come to the table and work out these debts. It allows our people to survive.”
‘How Can I Afford All That?’
Approximately 4,000 Medallion loans are owned by Marblegate Asset Management in Greenwich, Conn., which bought the loans from NCUA after the agency conserved a half-dozen New York City CUs that had specialized in medallion loans. Earlier this year Marblegate did offer a payment holiday, as CUToday.info reported here, but many drivers say their holiday has come to an end.
“I didn’t drive from March to the end of July, and they told me last month I could have no more payment holidays,” Vinod Malhotra, 55, who owes $435,000 on his medallion and has monthly payments of $2,630, told The New York Post. “Now I work five or six days a week, and make at most $150 per day but that is before gas and other expenses. I have a home mortgage to pay. I have two kids in college. How can I afford all that?”
Malhotra said the only way he’ll be able to survive in the years to come is if the city pushes through a debt refinancing program like the one pitched by the Taxi Workers Alliance, according to the Post. But a spokesperson for New York Mayor Bill De Blasio said that’s unlikely to happen, and pointed to comments the mayor made last month claiming the city would not be able to put up the cash without help from the federal government.