The city’s Taxi and Limousine Commission voted at a Wednesday virtual meeting to approve Mayor Bill de Blasio’s $65 million grant program assisting cab drivers drowning in debt.
“This is an enormous step forward for all of us and I’m grateful that we have arrived at this juncture,” said TLC chairperson Aloysee Heredia Jarmoszuk at the agency’s monthly board of commissioners hearing Oct. 6.
The panel overseeing the city’s for-hire vehicle industry voted 5-1 to adopt rules and eligibility requirements for the so-called Taxi Medallion Owner Relief Program, or MRP, which has started sending out grants to financially-struggling owners of taxi medallions — the permit required to drive a yellow cab in the Five Boroughs.
A creditor-driven bubble inflated the price of medallions to more than $1 million until their value crashed in late 2014, and the city failed to provide checks and balanced and profited handsomely from the artificially high sales.
The price flux trapped thousands of owners with hundreds of thousands of dollars in loans, with some resorting to suicide due to deep debts.
The MRP now offers $20,000 grants to individuals who own up to five medallions to help restructure their loans and lower monthly payments, along with $9,000 in monthly debt payment assistance.
As of Oct. 2, the city had secured 57 deals for drivers, yielding $10.4 million in debt forgiveness through the program, and more than 1,000 people are in the pipeline who have applied for the funds, which started rolling on Sept. 13, according to Heredia Jarmoszuk.
Out of that number, 11 people were able to settle their debts so far, and 37 have been able to lower their monthly payments to less than $1,600, with another eight people negotiating the payments down to under $615, she said.
“This data not only demonstrates an enormous leap forward in providing actual help to medallion owners in need, but it is proof that the MRP, which is underway, is working and will provide substantial relief for medallion owners that choose to participate,” so Heredia Jarmoszuk.
Debts ranged from $22,000 to $744,000, according to the commissioner, the majority of which, or 38 people, had debts upwards of $209,000.
The Commissioner said last month the average debt across the industry is around $300,000, but a previous survey by the TLC put that number at $499,000 with a median monthly payment of $2,600.
The new grant program has long been criticized by drivers and advocates for not going far enough, chiefly the New York Taxi Workers Alliance, a union representing some 21,000 for-hire vehicle operators in the city, which urged the Commission to vote down the proposal during a hearing on Sept. 27.
The NYTWA put forth a more aggressive plan to address the debt crisis in 2020 which would have made the city act as a guarantor, or “government backstop” to secure lower principals and monthly payments.
That would have allowed the indebted drivers to restructure their principals at no more than $145,000 with a maximum $800 in monthly payments, but Heredia Jarmoszuk has said the backstop was not feasible for the city, fearing it could saddle the city with a lot of money if drivers defaulted.
The sole No vote on Wednesday said he found the NYTWA’s plan “very compelling,” and couldn’t give his blessing to the agency’s scheme after hearing from so many distressed drivers last month.
“Every driver I’ve heard from, certainly every driver who testified at our hearing, told us that the MRP was inadequate, not sufficient to solve their problems and asked us to oppose the plan, so that weighs very heavily on my thinking,” said Steve Kest.
Another commissioner who voted Yes said that while she agreed it was not enough, it would help get funds out immediately.
“Is it enough? No it is not enough,” said Lauvienska Polanco. “I voted yes because I feel there’s immediate relief, immediate relief is necessary. The uncertainty in waiting for something better will add more despair to the medallion owner who is in desperate need today.”
NYTWA president Bhairavi Desai slammed the TLC’s moves, saying it would still leave many drivers without the means to settle their debts.
“The TLC has been doing everything in its power to undermine us and deny us this survival because they don’t want to take responsibility for a crisis they created,” Desai told amNewYork Metro. “In the midst of all of this there’s going to be families in financial ruin.”
On Wednesday, NYTWA’s plan gained the support from almost the entire New York Congressional delegation, which penned a letter Wednesday to Mayor Bill de Blasio urging him to enact the union’s alternative.
A mayoral spokesman referred to the city’s new program adding that City Hall plans to “build on” on it.
“The city’s Medallion Relief Program is already underway, and it’s working,” said Mitch Schwartz in a statement. “Fifty-seven owner/drivers have received a combined $10.4 million in debt forgiveness already, and hundreds more deals are in the pipeline. It’s a smart, compassionate approach, and we look forward to building on that exciting progress.”
