When someone thinks about New York City, taxi cabs are often part of the mental image. What most people do not realize is that drivers and/or taxi operators must purchase the right to drive in NYC. A “taxi medallion” is often purchased by investors or the drivers themselves. These medallions are treated similarly to a stock. The value goes up and down, but the market is much less regulated. Over the last 20 years, drivers have been duped into terrible loans required to purchase their medallion and bankruptcies are on the rise.
The Medallion Market
Taxi medallions are bought and sold as a commodity by individuals and investment firms. The price is dictated by supply and demand. As of 2013, a medallion was valued at $1.3 million, but as of last year, the value decreased by about 80%.
Interestingly, taxicab drivers do not usually buy the medallions directly from NYC. The assets are bought up by businesses and then sold to cab drivers at premium. Due to the enormous cost of a medallion, cab drivers are forced to enter into a loan agreement which often contains an interest rate that can sometimes be considered predatory.
Taxi Drivers Struggle to Pay Medallion Loans
A recent article by the New York Times offers an example of a driver that signed a contract to pay $1.7 million for a medallion. That driver made $30,000 that year and could not afford to pay rent. He also was not aware that the terms of the contract would result in such a hefty commitment. This is a common story for taxi drivers and one of the main reasons is that they are immigrants and unable to understand the complexities of the contracts they sign in English.
Rising Bankruptcy and Suicide Rates in the Taxi Driver Community
Predatory loans taken out by the drivers of NYC are leading to a rash of suicide and bankruptcy. Increased competition with Uber and Lyft has caused the demand for taxi drivers and medallions to sharply decline. The decline of available work and increased interest on their medallion loans has forced drivers to declare bankruptcy. NYC leadership has declined to offer a bailout to help these struggling drivers.
Are you stuck in a loan and struggling to pay the monthly bill? The stories from NYC cab drivers are similar to those from all over the country. Predatory lending has decimated the personal savings and retirement plans of thousands of people. If you are one of those people, you need help. Elias Dsouza of Dsouza Legal Group has been assisting individuals and businesses with bad loan debt for over 15 years. To seek out the skills and experience of Dsouza Legal Group, click here and get a free consultation.
When someone thinks about New York City, taxi cabs are often part of the mental image. What most people do not realize is that drivers and/or taxi operators must purchase the right to drive in NYC. A “taxi medallion” is often purchased by investors or the drivers themselves. These medallions are treated similarly to a stock. The value goes up and down, but the market is much less regulated. Over the last 20 years, drivers have been duped into terrible loans required to purchase their medallion and bankruptcies are on the rise.
The Medallion Market
Taxi medallions are bought and sold as a commodity by individuals and investment firms. The price is dictated by supply and demand. As of 2013, a medallion was valued at $1.3 million, but as of last year, the value decreased by about 80%.
Interestingly, taxicab drivers do not usually buy the medallions directly from NYC. The assets are bought up by businesses and then sold to cab drivers at premium. Due to the enormous cost of a medallion, cab drivers are forced to enter into a loan agreement which often contains an interest rate that can sometimes be considered predatory.
Taxi Drivers Struggle to Pay Medallion Loans
A recent article by the New York Times offers an example of a driver that signed a contract to pay $1.7 million for a medallion. That driver made $30,000 that year and could not afford to pay rent. He also was not aware that the terms of the contract would result in such a hefty commitment. This is a common story for taxi drivers and one of the main reasons is that they are immigrants and unable to understand the complexities of the contracts they sign in English.
Rising Bankruptcy and Suicide Rates in the Taxi Driver Community
Predatory loans taken out by the drivers of NYC are leading to a rash of suicide and bankruptcy. Increased competition with Uber and Lyft has caused the demand for taxi drivers and medallions to sharply decline. The decline of available work and increased interest on their medallion loans has forced drivers to declare bankruptcy. NYC leadership has declined to offer a bailout to help these struggling drivers.
Are you stuck in a loan and struggling to pay the monthly bill? The stories from NYC cab drivers are similar to those from all over the country. Predatory lending has decimated the personal savings and retirement plans of thousands of people. If you are one of those people, you need help. Elias Dsouza of Dsouza Legal Group has been assisting individuals and businesses with bad loan debt for over 15 years. To seek out the skills and experience of Dsouza Legal Group, click here and get a free consultation.