The New York City and State leaders announced that they are planning on a $500 million bailout to help thousands of taxi drivers trapped in overvalued medallion loans.
The proposal would create a new public-private partnership to take over the debt that drivers took on to buy medallions.
According to reports, the New York Taxi Workers Alliance spearheaded the debt forgiveness plan. Furthermore, Congressman Gregory Meeks announced federal legislation aimed to relieve medallion owners from tax liability for debt forgiveness.
“Drivers finally free of unsustainable debt will now face an impossible to pay five or six-digit tax bill. That would not be justice,” the congressman said.
Indeed, the taxi industry has long fought for relief. Many advocates pointed out the city has profited for years from the sale of medallions. According to them, even as buyers, often immigrants, were being steered into predatory loans.
“We know that folks in this industry have suffered tremendously,” City Council Speaker Corey Johnson said. “I’m really excited that after six months of painstaking work and effort. The task force is going to be releasing a variety of recommendations that we think could stabilize the industry, plan for the future and help alleviate the suffering.”
Meanwhile, Mayor Bill de Blasio said Thursday it is not a “straight-up public bailout”. Rather, it’s a different model, largely based on private financing to help forgive thousands of dollars medallion owners face.
Furthermore, de Blasio admits that while the plan is not rock solid, it was at least a start.
“We want to help these taxi drivers. They’ve been through hell. We want to find a way to help them and their families,” de Blasio said.
“This is the most optimistic I have ever felt about solving this crisis,” said Bhairavi Desai, founder of the Taxi Workers Alliance. “We’re going to win.”
Moreover, the panel is expected to issue a report and a proposal before January is over. Afterward, the council plans to explore leveling the playing field for the black car and livery industry. This means it could possibly ease regulations services that Uber and Lyft are exempt from.