Under the new program, loans for 3,000 drivers who owe an average of $550,000 will be restructured to a maximum of $200,000.
New York City cab drivers who owe hundreds of thousands of dollars on loans they took out to operate yellow cabs will get significant relief from a new debt relief program.
Under the program, announced Tuesday by city officials, the New York Taxi Workers Alliance (NYTWA) and taxi medallion lender Marblegate Asset Management, loans for 3,000 drivers who owe an average of $550,000 will be restructured to a maximum of $200,000 .
Of that, $30,000 will be covered by a grant and the balance will be backed by a city-backed guarantee, officials said.
The city-backed guarantee means drivers don’t risk losing their homes if they default, said Bhairavi Desai, chief executive of NYTWA, a drivers’ union. “It’s life-saving and historic,” she said.
Many cab drivers who borrowed to buy the medallions needed to operate a yellow cab fell into deep debt when the value of a medallion dropped from more than $1 million in 2014 to $200,000 a few years later sank. Taxi industry officials blamed predatory lending practices in the United States — as well as ride-hailing services like Uber — for the crisis.
City officials, Taxiallianz and Marblegate reached a tentative debt relief agreement in November 2021 and have been working out the details over the past few months. Under the plan announced on Tuesday, medallion holders will be able to apply for a refinance on their loans starting September 19.
Taxi drivers attend a New York Taxi Workers Alliance debt relief rally in the Brooklyn borough of New York, USA [File: Ismail Ferdous/Bloomberg]
Andrew Milgram, managing partner and chief investment officer of Marblegate Asset Management, said drivers shouldn’t wait to apply.
“In a rapidly changing economy, it is important that drivers act in September to realize meaningful debt relief and a sizeable reduction in their monthly loan payments,” Milgram said in a statement.
New York City Mayor Eric Adams, a Democrat, praised the deal, brokered by members of his administration including the NYC Taxi and Limousine Commission.
“Our cab medallion owners and drivers have always kept New York City moving, and it’s finally time we paid for it with some real debt relief for needy owners,” Adams said. “We’re probably putting tens of thousands of dollars back in the pockets of these self-drivers and showing them what real relief looks like.”
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