Off the road in Long Island City.
Photo: Lev Radin / Pacific Press / Shutterstock
What if the Statue of Liberty disappeared overnight? Or, suddenly, there were no more bodegas, bagels, pizzerias? A New York icon, as deeply rooted in city life as any of them, has all but disappeared before our eyes this year. The taxi was taken away. Two-thirds of our yellow hail taxis are gone.
Before the pandemic, some 10,500 yellow taxis – about 80% of the total number of taxi medallions issued by the city – were on the streets every day. During the lockdown peak, in April 2020, that number was 982. “Our business fell by about 90% in the space of three weeks,” says Spyros Messados of Queens Medallion Leasing. “The drivers were afraid to move, and nobody was moving around the city anyway, so it was not economically feasible.” Even though the city has started to return to something approximately normal, the number of taxis has failed. At the end of last summer, it climbed back to about 3,500 a day, where it remains.
And taxi fleet owners and driver representatives say the numbers are not improving. “Most fleets use between 20% and 30% of their fleet, at a price below cost,” says Steve Gounaris, owner of Boulevard Management, a fleet of 180 cabins. “In this industry, you have to have a decent amount of cars to be profitable. How are you going to make a payment for a car, a medallion payment, insurance, compensation for workers, labor – when you offer them for less than what it costs you? “
These costs are considerable. Although there were very few rates last year, locket owners continued to pay a slew of fees (per vehicle, per year: $ 9,600 in auto insurance, $ 2,500 in accident insurance). work, $ 400 in commercial vehicle tax) to keep their car registered as Taxis. To avoid these charges, the owners put their medallions “in storage,” which means they removed their car’s license plates and returned the medallion to TLC indefinitely. “Once the city was closed, everyone dropped the vehicles. We were forced to return the medals and plaques because the insurance companies did not agree to give us a reduction, ”explains Savas Tsitiridis, the owner of United Taxi Management, a fleet of 253 cars (before the pandemic , he had 315). “If you wanted to stop the insurance costs, which are very expensive, you had to drop everything.” Thousands of taxis are therefore parked and without a tray behind fences in Long Island City, their yellow paint baking in the sun.
They can stay there indefinitely because, like businesses in almost every industry, many taxi fleets have simply gone out of business in the past year. (About three-quarters of the city’s taxis are operated by fleets; the rest are privately owned.) “A number of fleets that I know of have given up completely,” Tsitiridis says. “I was told there were over 20 fleets that weren’t renewed – maybe well over a thousand cars.” Gounaris has heard the same thing, although he’s not sure how many closures are permanent, “or if they’ve only done it temporarily and are waiting for things to change.”
Messados says many “were already struggling, and that was just the icing on the cake for them. I’m pretty sure dozens of people have gone out of business, ”he says. “Fleet bankruptcy will be a huge obstacle to return. Because instead of over 60 fleets putting new cars on the road, I only know two that have strong financial backing, and a third where the family is doing quite well. It is even more difficult for individual owner-operators, who do not have the economies of scale or the economies of large companies.
Making a living as a taxi driver has been increasingly difficult for years, largely because of the cost of entry. Because the city kept the number of lockets constant from the 1930s to the 1990s and added only a modest number since then, their resale price has gone up and up again, and about a decade ago they exceeded approximately $ 1.2 million each. (Fleet medallions cost a bit more than individual ones.) Solo drivers would come out huge and sometimes predator loans to get into the business and then spend many years of long days and nights driving to pay them off. The medallion, for many solo operators, has functioned as a retirement fund: you drive your entire working life, pay for it, then sell it to another driver, and move to Florida. Then came Uber and Lyft, and the market collapsed. Medallions lost three-quarters of their value in just a few short years, and on top of that, there was simply less street graces to be received when runners switched to apps. Drivers who had huge loans – $ 500,000 on average – found themselves underwater. Nearly a dozen drivers have committed suicide in recent years, suicides of both desperation and protest.
Then the pandemic struck and the market warped further. The medallions are currently being sold for small fractions of their recent value, according to people from several fleets. “About $ 75,000 in cash, yes,” Tsitiridis says. “And people owe at least ten times that.”
The city has committed $ 65 million of its federal stimulus funding to bail out owner-drivers, but the funding has yet to be formally legislated. Bhairavi Desai, of the New York Taxi Workers Alliance, says the amount offered is far too small to save them – and it’s basically an injection of money for lenders who will leave drivers under contract in such a way. permed. “Owner-drivers have fought desperately for debt cancellation,” she says. “If they are going to work, the [medallion] mortgages are so high that they won’t be able to keep up with their payments, but as they work, they will be asked more and more to make a payment, ”she said. “And even though they are able to cover the entire payment, that means they only work for loans. Then there is unemployment [because they’re considered reemployed], and there is just more pressure on them from the lenders.
Messados says the circumstances of the pandemic have led some drivers to reassess whether the work is worth it. A locket owner he knows gave up and went to work at UPS. “It’s fucking hard work. You know? It’s exhausting, ”he says. “[The medallion-owner] said, “I earn as much as before, but I have all the benefits now, and it’s a lot less stressful of a job. So he probably won’t come back. He’ll probably give up his locket.
As the city tries to return to normal speed, the larger outfits that can afford to remove the medallions from their storage are in the best position to survive. But they ran into another problem: The Taxi and Limousine Commission, which has operated at significantly reduced capacity throughout the pandemic, cannot keep up. Getting the medallions out of storage requires TLC inspections and paperwork approval. Usually, according to several owners, these inspections can be done immediately. Lately, you need one appointment from a limited number, and it must be booked three or four weeks in advance. “I get it. Social distancing – you don’t want everyone in the office,” Gounaris says. “But now you have to wait three weeks to do some paperwork and register the car and whatever else you want to take back. “If it continues like this, how many will come out – 20 cars in the industry every three weeks? You have over 10,000 cars parked in the warehouse.”
Some fleet owners are optimistic that the TLC inspection log blocking will improve soon, but they are all frustrated. “When you put a car back on the road, it involves a pretty intensive process of physically checking the car and testing it. There’s only one facility in New York that does, at Woodside, and that facility has only been open three days a week, ”Messados says. “And then there’s a second facility you have to go to. And you must bring the original papers and documents. This thing, they refused to move remotely. So the two together were a real pain in the ass.
Because many drivers were unable to exit during the pandemic, locket lenders have granted payment holidays. But according to Desai, the industry’s largest lender, the Marblegate hedge fund, said the break in payments was about to end. She also says that Medallion Financial, a major publicly traded lender, has started to aggressively seek debt. “By July, we could see a veritable avalanche of foreclosures if nothing is done about the debt,” Desai says. “Medallion Financial grabbed and grabbed the locket, then used a judgmental confession [clauses] find the loan balance by equity in homes sold or other assets. Foreclosures appear to be their primary response to the crisis – not settlements or debt cancellation. “Several taxi owners have confirmed Desai’s account, including one who says Medallion put a lien on his house using his signed judgment confession. Responding through his lawyer, Medallion Financial calls his description inaccurate and vigorously contests “any recent change in practice” in this direction.
“It’s not that we don’t want to pay,” says one fleet owner who wanted to remain anonymous to avoid possible retaliation. “But it sounds scary to us. Banks and insurance companies want their money, which I get. But forcing myself to do things I can’t do will not help me earn the money to pay.
Everyone seems to be hoping for intervention from the city, although so far there is no indication of a sufficient bailout. Under the Blasio administration’s proposal, drivers can get a grant of $ 20,000 to use as a down payment for debt restructuring, plus an additional $ 9,000 to cover the Medallion mortgage for up to six months. But according to multiple industry sources, Marblegate is only willing to renegotiate the medallion debt at $ 275,000. (The company did not respond to requests for comment.) According to Desai’s calculations, “Drivers would be late by $ 15,000 for the year, while earning $ 10.40 – below pay. minimum – per hour. That’s after working 60 hours a week, ”Desai says. “The only way to reach your monthly goal is to work twice as hard as other New Yorkers. Without debt cancellation, it’s just not sustainable. “
This anonymous fleet owner says he hopes the industry can find a way to work with the city and the banks. “Otherwise, I see it’s really bad,” he said. “First you pulled us on one foot with Uber, then you pulled the industry on the other foot with the pandemic. Now no one is walking. We barely crawl. “