The average loan drivers have taken out for a taxi medallion in New York City is over a half a million dollars, but under the amended Taxi Medallion Debt Relief Program, they will now only be responsible for a portion of that debt.
“It is really good,” said Herld Valere, who owes more than $600,000 on his medallion, which permits him to own and operate a yellow cab in the city.
For decades, it was seen an investment that amounted to a ticket to the middle class for thousands of cab drivers. But the influx of Uber and Lyft vehicles increased competition for fares and sunk the value of that investment.
The pandemic made things even worse.
“It was hard to feed your family, to pay your housing and now if it all is just $3,000 a month, it will be good,” Valere explained.
Back in 2014, taxi medallions were valued at more than $1 million each.
A few years later, the value plunged to a quarter of that, leaving many owners owing more than the medallions' worth.
Under an amended version of the program, all loans will be restructured to a maximum balance of $200,000.
An additional $30,000 will be covered by a grant and the balance will be secured by a city-backed guarantee, meaning, if drivers default on the loan, they won’t risk the loss of any of their assets.
Interests rates and the monthly payment cap are slightly higher than what was originally agreed upon back in November’s tentative debt relief agreement.
Still, medallion owners say this is a huge win for them.
The debt relief program is expected to impact 3,000 medallion owners.
They can apply to refinance their loans beginning September 19.