Thursday, October 19, 2017
Here at Shenwick & Associates, we’re paying close attention to the travails of “underwater” holders of New York City Taxi and Limousine Commission medallions and practical solutions to their plight. In a recent blog post, we reviewed a New York City Council Committee on Transportation hearing last month on the issue.
Earlier this month, Committee on Transportation Chair Ydanis Rodriguez introduced a proposed local law, Int. 1740-2017, which would create a new nontransferable taxicab license to allow current taxicab owners to operate one additional vehicle under a single existing medallion license. Presumably, under this proposal, the medallion owners would have an additional stream of revenues, and thus, theoretically, make taxi medallions a more attractive investment.
In an amNYstory about the proposal, reactions were mixed. Bhairavi Desai, the executive director of the New York Taxi Worker’s Alliance, which represents 19,000 drivers, called the bill a “starting point” but wouldn’t support it in its current form. “My concern would be what’s going to happen to the drivers on the road because this wouldn’t save the drivers who are in a race to the bottom,” said Desai. “In order to be hailed you have to been seen and this could help address that issue and help the industry, but to really protect drivers there should be a commission-like system with a guaranteed income and a cap on black cars.”
I’m not sure that this proposal would assist medallion owners who own overleveraged medallions for at least two reasons: 1. Based on the laws of supply and demand, if the number of medallion operators increase, the value of each existing medallion will decrease; and 2. My clients indicate that there are already too many taxis, Uber, Via and Lyft cars on the road and this proposal would increase or double the number of medallions and increase competition for medallion owners. My clients indicate that they are presently working 20-30% longer hours each week for 20% lower earnings.
For more information on taxi medallions, debtor and creditor relations and bankruptcy, please contact Jim Shenwick.
Monday, October 02, 2017
Here at Shenwick & Associates, our practice involving debtors with “underwater” taxi medallions is growing by the day, so we pay close attention to the latest developments in the area. On September 25th, the New York City Council Committee on Transportation held a hearing that was attended by several dozen medallion owners pleading for relief from the decline in medallion values. As we previously blogged, at an auction earlier this month, 46 medallions sold for under $200K each. The New York Post article about the hearing mentions William and Gloria Guerra, who purchased a medallion in 1984 for $86K and hoped to fund their retirement to sell it. Instead, they’ll break even or suffer a slight loss in inflation adjusted dollars.
The Transportation Committee indicated that it’s considering several measures to help the industry, including:
· Creating a task force and a six-month study of how ride share services are impacting taxis;
· Capping the total number of cars operated by ride share services (an idea originally proposed by Mayor De Blasio in 2015, which was abandoned after Uber strongly campaigned against it);
· A bailout fund for medallion owners funded by a surcharge on livery cars;
· Allowing each medallion to cover two taxis instead of one; and
· Relaxing disabled access requirements.
The Transportation Committee hasn’t taken any action yet, and may be deterred from limiting the growth of ride share services due to advocacy from their drivers and lobbying firms. For more information about this developing area of debtor/creditor and bankruptcy law, please contact Jim Shenwick.