For generations, New Yorkers have been paying a cartel surcharge for taxis. A conspiracy of New York City government and business has carefully limited the number of taxi “medallions,” without which it is illegal to operate a taxi that picks up pedestrians hailing drivers on the street. Owners of taxi medallions, naturally, are generous donors to the politicians who restrict their numbers. The artificial scarcity designed to push up prices is simply yet another way powerful special interests and politicians collude to cheat ordinary New Yorkers in order to line their own pockets. When the medallion system was first created, in 1937, only 13,585 of them were authorized. Today, with the population up by more than a million and the demand for cabs up massively, that number stands at . . . 13,587.
For 70-plus years, anyone who bought a taxi medallion was making a bet that the supply of taxi services would remain artificially restricted. Then came Uber. The rise of e-taxi services flooded the marketplace with competitors for yellow-cab drivers and the value of the medallions plummeted. Medallions once worth something like $1.3 million are now selling for less than $250,000. So Alexandria Ocasio-Cortez is saying the owners of medallions need to be bailed out. She actually used that language.
NYC taxi drivers were trapped in a predatory lending scheme for taxi medallions.
Drivers, many of them immigrants, were piled on w/ million-dollar loans on incomes of $~20k/year. It’s led to a suicide crisis.
They need to be bailed out & those responsible need to answer for it. https://t.co/PReMdO7GxQ
— Alexandria Ocasio-Cortez (@AOC) September 27, 2019
So New Yorkers who were forced to pay extra for taxis to benefit medallion owners who bought off politicians are now being asked to cover the medallion owners’ losses now that their bets have turned sour.
AOC has been bringing this matter up in congressional hearings, as though this is somehow a federal issue. According to the New York Post, “taxi driver advocates aren’t seeking a bailout, but city-funded debt forgiveness, according to New York Taxi Workers Alliance executive director, Bhairavi Desai, who testified at Thursday’s hearing.” Oh, that’s totally different then.
If AOC or anyone else can demonstrate that any loan was made unlawfully, she should point the way to prosecuting whatever entities broke the law. Calling loans “predatory” won’t cut it. New Yorkers who have been ripped off by the taxi industry all these years bear no responsibility for making it whole now that its scheme to overcharge the public has collapsed.