Tuesday, February 20, 2018
City Hall Taxi Driver Tragedy
As reported by the New York Times and the New York Post, on February 5th, a taxi driver drove up to the steps of City Hall and took his own life. Douglas Schifter posted on Facebook that morning that he had worked 100-120 consecutive hours almost every week for more than 14 years. Despite his grueling work schedule, he was no longer able to afford health insurance or vehicle maintenance and repairs and had maxed out his credit cards. He blamed Governor Cuomo, Mayor de Blasio and former Mayor Bloomberg for increasing the number of livery cars and taxis on the streets of NYC.
We feel for Mr. Schifter and other taxi drivers and medallion owners; his story and other stories we have heard are modern-day tragedies. By way of background, for those who aren’t familiar with the taxi industry in New York City, taxi drivers either own their own medallion or lease the use of a medallion to drive in the city.
Our taxi driver clients indicate that on average they are working 30% longer each week and regrettably earning 30 to 40% less money each week. Their competition from Uber, Via, Lyft and black cars has increased tremendously, along with the costs associated with driving a cab.
For those drivers that purchased their medallion in the last three years, the situation is equally bleak. Three years ago, taxi medallions were selling for approximately $1,300,000 per medallion. Last month’s sales based on data from the TLC indicate that the average medallion is now selling for approximately $186,000 – a drop in value of approximately 86%. Moreover, many of our clients have refinanced their medallions through banks or credit unions, and with the drop in the value of taxi medallions, those taxi medallions are also “underwater” (the value of the medallion is exceeded by the debt secured by it). Additionally, our clients tell us that the costs associated with owning a taxi medallion, such as the TLC mandated costs and expenses, have increased as well.
Unfortunately, for taxi drivers, there are no easy solutions, other than to stop driving and consider another occupation or job. Fortunately for owners of taxi medallions, relief may be found in filing for personal bankruptcy or doing asset protection planning and a workout with the bank or credit union that holds their taxi medallion loan.
If you’re an overburdened taxi medallion owner struggling with an underwater medallion or other debt, please don’t despair–we can help you. Please contact Jim Shenwick.
Posted by James Shenwick