While taxi drivers in New York City may have finally “ridden” out the absolute worst effects of enduring the ridesharing boom and the pandemic at the same time, the road to clearer skies still looks dim.
That’s because, as was pointed out by @JBaksht on Twitter this week, taxi medallions have still plunged 90% over the last decade.
The plunge in medallion value came at the same time that Lyft and Uber began to register hundreds of thousands of daily trips in New York City. Prior to the pandemic, Uber had peaked at over 500,000 trips per day, while Lyft was approaching 200,000 trips per day.
Medallions suffered their “death blow” from the pandemic in early 2020, which saw their value plunge to just pennies on the dollar from what they had cost a decade prior.
Medallions cost about $300,000 in the early 2000s. By 2010, they had increased in price to almost $1,000,000. But when ridesharing firms entered the market, they crashed to under $100,000, leaving many drivers in financial ruin.
We noted back in November that drivers had finally “won one” after they secured help in slashing the balances they owed on their medallions. But this small respite belies a decade ridden with plunging business, years of hard work saving for medallions wiped away, driver suicides and an all-out upending of a business that once had a strong moat.
Drivers did get relief last month when a deal between New York City’s municipal government, a private equity firm that had become the single largest taxi medallion creditor, and an advocacy group that spoke for thousands of taxi drivers resulted in slashing loan balances for drivers. Some loans were as high as $500,000 and are now just $170,000, which allows drivers to make reasonable and far more manageable payments every month.
Recall, in January of this year, we wrote that medallion lenders had started to demand payments after suspending collections for several months during the worst of the pandemic. Recalling that the collapse in medallion prices began before the outbreak – in January, NYC launched a city task force which proposed a $500 million bailout for drivers’ loans. This was followed by a February threat by NY State Attorney General Letitia A. James, to sue the city for $810 million to compensate drivers.
After the pandemic hit, efforts to help NYC cab drivers – over 90% of whom are immigrants, evaporated.
In 2013, yellow cabs made nearly half a million trips a day. In 2020, that number dropped to 50 – 60 thousand. But the yellow cab industry was already hemorrhaging trips pre-pandemic.
As unregulated vehicles for hire flooded the streets, investment-backed platforms such as Uber and Lyft undercut fares, able to absorb the loss. As riders flocked to these cheaper and more accessible taxis, yellow cabdrivers were left in the dust. –CNN
While our euphoric and completely nonsensical public markets continue to subsidize cash burning ridesharing companies, we have to admit that it’s nice to see NYC’s taxi drivers finally win one...it’s been a long road.