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.
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