Monday, September 24, 2018

Mic: New York city cab drivers face depression and debt amid increased competition from Uber and Lyft

Wednesday, September 12, 2018

Jacobin Magazine: The Graying of Bankruptcy

In a system where the majority of people have to sell their labor for wages to survive, people’s ability to support themselves financially almost always decreases as they age. Without public assistance, therefore, old age is comfortable only for those with savings, and uncomfortable if not downright miserable for those without.

This is why the United States passed the Social Security Act in 1935, which guaranteed a source of income to replace wages for all people 65 and older, along with the Social Security Act Amendments in 1965, which created Medicare, a public health insurance program for the same population. These programs are financed socially, by adjusting the tax rate schedule to accommodate them — that is, by requiring everyone in society to contribute, based on their ability to pay, for benefits that they will be entitled to after a certain age.

These and other mid-century programs made it a little bit easier to grow old in America, for a while. But they have come under strain as wages have stagnated and the cost of housing and education skyrocketed, placing a greater burden on social welfare programs to achieve adequate income for people. Meanwhile, programs themselves have been systematically starved of resources or outright eliminated.

Older Americans haven’t fared well. In fact, they’re filing for bankruptcy in record numbers. A new report from the Consumer Bankruptcy Project called “Graying of US Bankruptcy: Fallout from Life in a Risk Society” contends that, while it took a few decades to fully set in, older Americans are now experiencing the consequences of the assault on the social safety net that began under Reagan and has persisted, with leadership from both parties, ever since.

Running the Risk

“Government is not the solution to our problem,” Reagan was fond of saying. “Government is the problem.” His election inaugurated the reign of the free-market neoliberals, who advocated supposedly leaner and more efficient market-based alternatives to socially-funded government programs. Not coincidentally, these alternatives were friendly to capitalists — lower taxes, new lucrative private markets.

In 1982, Reagan established a commission made up of corporate executives whose task was to “root out inefficiency” in government spending. The Grace Commission issued “2,478 cost-cutting, revenue enhancing recommendations” that took aim at federal wages, retirement systems, healthcare programs, and a variety of federal subsidies which were deemed wasteful. The chairman of the commission, successful businessman J. Peter Grace, wrote to Reagan, “If the American people realized how rapidly Federal Government spending is likely to grow under existing legislated programs, I am convinced they would compel their elected representatives to ‘get the Government off their backs.’”

One man’s “getting the Government off their backs” is another’s evaporation of opportunity. As social programs have withered, wages have stagnated, and inequality has skyrocketed, many ordinary working people have lost their financial footing and their retirement prospects have dimmed. Today, just one hundred CEOs have the same amount of money stored away for retirement as the bottom 41 percent of the American population.

Meanwhile the age at which a person is eligible for full Social Security benefits has risen from 65 to 70, and the penalty for early retirement has increased up to 30 percent. Medicare recipients’ out-of-pocket costs are ballooning. Defined benefit pensions have been replaced with unpredictable and risky employee-owned 401(k)s. The list goes on.

And now the chickens are coming home to roost. The Consumer Bankruptcy Project found that since 1991, the rate of Americans age sixty-five to seventy-four filing for bankruptcy has doubled. The rate for those age seventy-five and over has tripled.

“The changes are so great,” they found, “that the broader trend of an aging US population can explain only a small proportion of what is happening in the bankruptcy courts. Older Americans’ reported reasons for filing strongly suggest that they are experiencing the fallout from our current individualized risk society and the corresponding shrinkage of their social safety net.”

The researchers’ data backs this up, suggesting that “that financial crises associated with living in America’s high-risk society are highly correlated with older Americans’ increasing use of the bankruptcy system.” As risk and responsibility have shifted from society as a whole onto individuals to pay their own way — even when they can’t work at all — older Americans are increasingly vulnerable to financial ruin.

The Means of Life

The responses to the questionnaires collected by the Consumer Bankruptcy Project illuminate the predicament that working-class older Americans are in. When asked the reason for bankruptcy, one respondent said:
All things went up in price. Retirement never went up. Had a part time job that was helping to meet monthly payments. House payment kept going up. Was fired from my part time job that I had for over 10 years without any warning. Being 67 and having back problems, not many people will hire you even as part time worker.
Here we can see the complex of problems that give rise to financial difficulty in old age. Income in retirement isn’t sufficient to cover the rising cost of living, including healthcare costs and payments on debt. After a lifetime of depressed wages, many people don’t have the savings to meet their financial responsibilities, yielding need employment to supplement their income.

But the aging body leads to a (real or perceived) inability to do the work needed to secure a wage. As a result, older Americans are increasingly left without much financial recourse besides personal bankruptcy — which is not a panacea, just a last-ditch effort to eliminate personal debt and stop the multiplication of costs.

One path to solving this problem is to make a concerted effort to drive up wages, control living costs, and repair the social safety net, so that people enter old age with savings instead of debt, and so that older people who can’t work still have a way to sustain themselves in their final decades. The Left should pursue this approach without reservation.

And there is a deeper issue, too, which requires a more radical solution in the long-term. The problem is that people are required to sell their labor to capitalists in order to have access to the means of life to begin with. What if, instead, we had a society where everyone was guaranteed a decent living just because they’re alive, not on condition of employment, and we pooled our resources and our productive capacities to make good on that guarantee? Then perhaps all people, young and old, could live with dignity.

Copyright 2018 Jacobin.  All rights reserved.


Thursday, September 06, 2018

August 2018 TLC medallion sales

The August 2018 New York City Taxi & Limousine Commission (TLC) sales results have been released to the public. And as is our practice, provided below are Jim Shenwick’s comments about those sales results.

1. The volume of transfers rose from July. In August, there were 52 taxi medallion sales.

2. 37 of the 52 sales were foreclosure sales, which means that the medallion owner defaulted on the bank loan and the banks were foreclosing to obtain possession of the medallion. We disregard these transfers in our analysis of the data, because we believe that they are outliers and not indicative of the true value of the medallion, which is a sale between a buyer and a seller under no pressure to sell (fair market value).  Three transfers were estate sales for no consideration and another transfer was from an individual to an LLC for no consideration, which also do not reflect fair market value and which we have also excluded from our analysis.

3. However the large volume of foreclosure sales (approximately 71%) is in our opinion evidence of the continued weakness in the taxi medallion market.

4. The 11 regular sales for consideration ranged from a low of $150,000 (one medallion), $160,000 (one medallion), $170,000 (one medallion), $172,500 (two medallions), $175,000 (two medallions), $180,000 (one medallion), $182,300 (one medallion), $185,000 (one medallion) and a high of $200,000 (one medallion).

5.  Accordingly, the median value of a medallion in August was $175,000, the same as in July.

In Jim Shenwick’s opinion, the new NYC law restricting the number of Uber, Via and Lyft licenses does not seem to have yet increased the value of taxi medallions.

Please continue to read our blog to see what happens to medallion pricing in the future. Any individuals or businesses with questions about taxi medallion valuations or workouts should contact Jim Shenwick at (212) 541-6224 or via email at

Tuesday, September 04, 2018

New York Times: Where Yellow Cabs Didn’t Go, Green Cabs Were Supposed to Thrive. Then Came Uber.

Mohammed Uddin was having a bad day, and it was only lunchtime. He was fourth in line at a green-taxi stand in Astoria, Queens, and not happy about it.

But he was not waiting for a green cab to pull up. He was in a line of green cabs waiting for passengers to pick up in the shadow of the Astoria Boulevard subway station.

“I started at 9 o’clock,” said Mr. Uddin, a green-taxi driver since he left a hotel job on Long Island in 2014. “I made $47 so far. That’s very bad. If Uber hadn’t come in, it wouldn’t be like this.”

Uber and Lyft, the ride-share services that have transformed the way many New Yorkers get around, have plunged the yellow cab industry into an existential crisis. But green-cab drivers are no less angry about app-connected rides, saying that Uber and Lyft have torpedoed their fledgling segment of the taxi industry before it even had a chance to establish itself.

Mayor Bill de Blasio recently signed a bill into law that capped ride-share vehicles at their current level, around 100,000, making it the first major American city to impose a limit on the booming industry. But drivers like Mr. Uddin said the cap was unlikely to create a new window of opportunity for green cabs, in part because ride-hail cars outnumber green cabs 30 to 1. City officials estimate the number of green cabs on city streets to be around 3,500.

The city wanted green taxis to be an antidote to a longstanding problem: Yellow cabs rarely pick up people outside Manhattan, except at the airports. But their arrival more or less coincided with the rise of Uber, which, after establishing itself in Manhattan, expanded across the city.

“Uber and Lyft really decimated the green cab sector,” said Bhairavi Desai, the executive director of the New York Taxi Workers Alliance, which represents taxi and ride-hail drivers. “There was high expectation among drivers that this would be an opportunity to earn without the same level of pressure that you face in the yellow-cab industry.”

Uber counters that it helps green cabs, because many green-taxi operators also drive for Uber. An Uber spokesman said the ride-hail service dispatches more than 50,000 trips to green taxis every month — of course, for passengers, it can be confusing to order an Uber car and have a green taxi pull up to the curb. The Uber spokesman, Jason Post, said Uber provided “an enormous earning opportunity by connecting drivers with more rides,” especially in far-flung neighborhoods where fewer green cabs circulate looking for passengers.

Uber riders say it is often much easier and faster to get an Uber car with a couple of taps on a cellphone than to it is to look for a green cab to hail on the street.

Figures from the city’s Taxi and Limousine Commission underscore how much business for green cabs has declined since ride-share cars arrived. In May, green taxis made 25,693 trips a day across the city, a 55 percent decrease from May 2015, the busiest month on record, which had 57,637 trips. By contrast, Uber says it handled more than 84,000 trips to or from a single neighborhood, East New York, Brooklyn, between July 18 and Aug. 15.

For green cabs, revenue has declined proportionally as trips have dwindled, to $386,965 a day citywide in May 2018, from $862,099 in May 2015. Green-cab drivers are working less than they were, 5.7 hours in May 2018, compared with 6.5 hours in May 2015.

Brooklyn accounted for a third of green-cab pickups from January through May of this year, according to the taxi commission. Almost another third, 31 percent, were in northern Manhattan, and 29.5 percent were in Queens. By contrast, only 5.3 percent were in the Bronx, and only one one-hundredth of one percent on Staten Island.

And, while the number of ride-hail vehicles has soared, the number of green cabs has shrunk. A total of 8,345 permits have been issued since 2013, but the taxi commission considers only 3,514 active.

As for whether Uber had hurt the green cabs, Mr. Post, the Uber spokesman, said, “I would say Uber has built a better mousetrap.”

Green taxis were supposed to be that mousetrap — a new category for the entrenched taxi industry, created when Michael R. Bloomberg was mayor. “The right to hail a legal taxi in all five boroughs,” he said in 2013, was “something that New Yorkers have deserved and never had.” A survey by the taxi commission found that 95 percent of yellow taxis picked up passengers below 96th Street in Manhattan and at the airports.

The solution — taxis that could only operate away from the areas dominated by yellow cabs — now seems so 2011, which is when the Bloomberg administration first proposed it. The new category of taxis that was created, the green cabs, could not pick up passengers in Manhattan south of East 96th Street or West 110th Street. They can stop if someone hails them anywhere in the other boroughs, except at the airports.

By coincidence, 2011 is also when Uber began operating in New York.

Now, some passengers say green cabs tried, but never fulfilled their promise.

“They filled a crucial void in areas like Harlem where yellow cab service was spotty at best” when they first hit the streets, said Derek Q. Johnson, who lives in Harlem. “But I think it’s hard to dispute that the ride is better with Uber and Lyft and the reliability is more assured.”

Different rules apply to green cabs at airports, where they can drop off passengers but cannot pick them up, except by prearrangement — for example, if they are sent there by a dispatcher. Many drivers complain that those rules force them to go to the airports empty if they are dispatched for a pickup or return empty if they take someone there. Unlike yellow cabs, they cannot wait in the taxi lines. Uber and the other ride-hailing apps are not bound by airport rules.

The yellow-cab industry responded to the plan for green cabs by going to court. Yellow cab owners worried that the value of their million-dollar medallions would plummet.

The city won the court challenge and the value plummeted, but not because of competition from the green cabs that went on the streets in 2013.

“Unfortunately, they came along at the same time as Uber and Lyft,” said Mitchell L. Moss, a professor at New York University where he is the director of the Rudin Center for Transportation Policy and Management. “The benefit of Uber is it can come pick you up in highly dispersed locations, which the green taxi can’t really do because it’s got to stay near dense transit pickup locations.”

Green cabs, he said, are “basically clustering at transit and retail hubs” — near where subway lines end, for example — because they are more likely to find passengers there than if they cruise the streets they are authorized to cruise where people are not used to seeing cabs. Indeed, Ms. Desai, of the Taxi Workers Alliance, said that “significant street-hail markets” had not developed outside Manhattan.

But that was not the only problem for green cabs. “The city was kind of undercutting them by licensing all those other cars” — the ride-share vehicles, said Graham Hodges, a historian of the taxi industry and a professor at Colgate University, who predicted that a shakeout is coming.

“There are far too many vehicles on the road, and that’s where I think the T.L.C. will tighten up regulation,” he said, referring to the taxi commission. “And when they do, the ones with those permits will be in the best legal situation. They’ll be the ones that survive.”

Copyright 2018 The New York Times Company.  All rights reserved.