Cab drivers in new york: after suicides

New york richard chow struggles for words. He stands in front of his cab in the iconic new york mustard yellow color. There are protest posters on the windows. "I'm just overjoyed," chow finally says simply. "And my brother would be the happiest," he adds, visibly touched, in broken english.

The city of new york just gave chow about 219.000 dollars in debt forgiven. It's also to his personal credit. Together with the new york taxi workers' association (NYTWA), he has led a long fight – against the city, against lenders, against politics, and ultimately against a system that has driven countless cab drivers to financial ruin and nine of them – including chow's brother – to suicide.

New york forgives thousands of cab drivers some of the immense debt burden many took on to finance the coveted cab licenses. In all, the city is handing a symbolic $250 million check to drivers gathered on the front lawn of new york city hall on a sunny friday.

Among the cab drivers' supporters is new york senator and house leader chuck schumer. "It's about economic justice – it's as simple as that," the democrat says as he steps to the lectern outside city hall that friday.

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The settlement between the city, the cab union and one of the biggest lenders, marblegate, essentially sees debt forgiven to the tune of 200.000 dollars for the drivers – in addition, the city controls 30.000 dollars in cash at. The interest rate is to be a maximum of 7.3 percent over a maximum of 25 years, and the monthly payments a maximum of $1234.

And: the city provides the guarantee for the loans. "I no longer have to worry about my home, my possessions being taken away," chow expresses relief. And schumer adds, "loans are still being paid off. But they are loans that can be lived with."

How could it come to this?

The "medallions" affixed to the hood of every new york city cab are worth a lot of money. At peak times, they changed hands at prices of up to a million dollars. In early 2015, app-based ride services like uber and lyft enter the new york market unregulated. The big crash followed – the value of licenses dropped to less than 200.000 dollars. Many cab drivers are left with nothing. In 2022, the average debt load is still 550, according to NYTWA data.000 dollars, while cab licenses are currently only available for about 100.000 dollars to be traded.

The yellow cabs have long been the only option for a ride in the metropolis. The number of cab licenses, and thus the number of cabs on the road, is binding and currently stands at 13.587. The licenses change hands through an auction system.

Prices for scarce cab licenses rose steadily in the years leading up to 2014. The new york times describes a system in which banks and lenders are making hefty profits from the overheated market – and ignoring numerous warnings of a bubble.


The city, meanwhile, has used the extra revenue to boost budgets, the times reports. In the process, the city apparently earned handsomely from the medallion fares: according to the NYTWA union, new york skimmed off a profit of $850 million.

Uber and lyft, however, do not rely on the licensing system to transport passengers. While only the yellow cabs have the right to collect passengers from the side of the road, new yorkers seem to prefer ordering via app anyway, as the numbers show: app ride services already overtook cabs in daily trips toward the end of 2016. In the years that followed, usage rose rapidly. Just before the pandemic, app services came in at more than 749.000 trips a day, bringing cabs down to just 217.000.

Drivers and medallion owners face financial hardship

There is now a big question mark behind the yellow cab business model. The value of cab licenses drops precipitously. Many drivers, however, financed their licenses with the calculation to sell them in a few years at a profit.

Cabs' revenues are also steadily declining. Drivers complain of problems feeding their families, while many of them also have to service loans in the upper six figures. In the records of license transfers as of 2017, the phrase "foreclosure" can now be found with increasing frequency.

Financial hopelessness drove nine drivers to their deaths the following year, three of whom owned medallions. Virtually all previously lamented their financial hardship, the new york times reported in 2018. The city spoke of an "epidemic".

One of the drivers was kenny chow. He and his brother richard immigrated from myanmar and, like so many other drivers, wanted to fulfill the american dream with a cab license. Richard purchased a cab license at auction in 2006 for 410.000 dollars. In 2009, his brother kenny already took out a loan of more than 700.000 dollars in order to finance his or her license.

The medallion is affixed to the hood of every new york cab.

"It's just not right," richard chow says over and over again when talking about his brother and the state of cab drivers in new york. He decided to fight. It's a long struggle that will drag on for years. "I never thought we'd win," says chow himself.

Cab drivers organized, got top politicians like schumer on their side. Finally, the city submitted an offer for debt forgiveness totaling $65 million. But that was not enough for the riders. They required a guarantee from the city to step in should a driver become insolvent.

A hunger strike for the stage victory

"We had to escalate further," explains chow. In 2021, he went on a hunger strike. Along with other riders and politicians, he held out in front of city hall for 15 days. Then finally, white smoke: the deal that cab drivers are celebrating today is in principle. The city relented on the guarantee.

Marblegate, the largest lender, has responded to the city's offer, with others to follow, the cab union hopes. Also, borrowers with more than five licenses are exempt from the program.

On the day of the registration deadline to take advantage of debt relief, more than 1000 borrowers had received their papers. Marblegate itself expects about 2000 loans to qualify for the program.

So for drivers, this is just an interim victory. The posters on chow's cab read "all lenders, all loans! Become part of the solution." New york mayor eric adams also expresses hope that more financial institutions will join the program. "This is an opportunity," he says.

Chow wants to keep driving, he says. A few more years, then he would retire, rent his cab to another driver.