NEW YORK CITY–A City Council task force addressing the taxi-medallion loan crisis plans to recommend creating an app to make yellow cabs more competitive with Uber and Lyft, call for the introduction of flexible pricing, and for the rescue of medallion owners who can't meet their loan payments.
The recommendations will be part of a report that is expected to be released on Friday, according to Crain’s New York Business.
The plan comes at the same time representatives of New York’s taxi medallion owners have been pressing NCUA for relief on medallion loans, including attending the agency’s most recent board meeting. NCUA has announced plans to sell the huge portfolio of medallion loans it now owns after placing a half-dozen medallion-lending credit unions into conservatorship.
The plan for the New York rescue would rely on capital from "mission-driven" investors, City Councilman Stephen Levin, who chairs a working group focused on debt relief, told Crain’s New York Business. He stressed that the task force would not be pushing for a bailout using public money.
"There may be a role for the city to help, but we're not saying the city should basically cover the loss," Levin told the publication.
‘Multiple Scenarios’ Proposed
Instead, he said the group was considering "multiple" scenarios for helping drivers with underwater loans, but that the main one involved a public-private partnership in which an investor bought up marked-down debt and then forgave the difference between the purchase price and the loan's face value, according to Crain’s New York.
"If [loans] are going to be sold for 20 cents on the dollar, then why can't we have mission-driven capital take on that reduced debt and the rest is forgiven?" Crain’s New York quoted Levins as asking.
As CUToday.info reported earlier, the task force was created in the wake of a New York Times investigation last year that documented the ways lenders, regulators and city officials had pumped up the price of medallions to unsustainable levels in the years before Uber and Lyft entered the market and helped bring about a price collapse.
Fears Are Sparked
News NCUA is looking to sell the portfolio of more than 3,500 medallion loans, including some from Chicago, has “sparked fears that the NCUA would make a deal with an investor before a rescue plan could be put together,” Crain’s New York Business reported.
According to Crain’s, “the task force will also recommend ways to improve the business climate for owner-drivers and level the playing field with app-based services. They include increased enforcement of illegal street hails, flexible pricing for taxi fares and the creation of a ‘universal’ taxi app, according to industry insiders who have been briefed on the report.”