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Brian M. Rosenthal
NEW: Over the past year, a spate of suicides has revealed a financial crisis in New York's cab industry. Officials have blamed Uber, but much of the crisis can be traced to a handful of taxi tycoons. Here’s the real story, based on 10 months of reporting:
Thousands of immigrants who were chasing the dream of owning a New York taxi were trapped in reckless loans by bankers who made huge profits, The Times found.
The New York Times The New York Times @nytimes
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Brian M. Rosenthal May 19
Replying to @brianmrosenthal
From 2002 to 2014, the price of the permit that lets a driver own a cab (a “medallion”) rose from $200K to $1M It wasn’t by accident Some of NY's biggest taxi leaders artificially inflated the price, and made millions by issuing reckless loans to buyers
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Brian M. Rosenthal May 19
Replying to @brianmrosenthal
4,000 people bought medallions at inflated prices. Many were low-income drivers who had to sign huge loans with one-sided terms Some signed interest-only loans that made them pay hefty fees, forfeit rights and give up most of their income -- indefinitely
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Brian M. Rosenthal May 19
Replying to @brianmrosenthal
Next time you get in a NYC taxi, think about this graphic If your driver owns the cab, they can make $10,000 in revenue a month They likely get to take home less than $1,500 of that And for that privilege, they probably owe their bank at least $500,000
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Brian M. Rosenthal May 19
Replying to @nytimes
The taxi industry’s reckless practices, documented today in the , generated hundreds of millions for a handful of fleet owners, bankers, brokers & investors (including Michael Cohen) One banker got Nicki Minaj to perform at his son’s bar mitzvah
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Brian M. Rosenthal May 19
Replying to @brianmrosenthal
While taxi industry leaders got rich, their methods stripped immigrant families of life savings, crushed drivers under massive debt and created a bubble that eventually burst 950 cabbies have filed for bankruptcy. Thousands more are struggling to survive
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Brian M. Rosenthal May 19
Replying to @brianmrosenthal
If you think our story on the taxi medallion market sounds familiar, you’re not alone: We found the bubble was similar in many ways to the housing market collapse. Some banks even sold off their most risky medallion loans, just like in the housing bubble
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Brian M. Rosenthal May 19
Replying to @brianmrosenthal
As for Uber: It may have hastened the bursting of the taxi bubble, but it didn't cause it The average revenue per cab is only down by ~10% since Uber arrived (Cabs have been protected because 97% of rides start in Manhattan or airports; most Uber rides begin in outer boroughs)
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Felix Salmon May 19
Replying to @brianmrosenthal
How many drivers own their medallions?
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Brian M. Rosenthal May 19
Replying to @felixsalmon
Until 2016, city rules required 42% of NYC medallions to be owned by the primary driver of the cab. (Those owners were required to drive 210 9-hour shifts a year) So about 6,000 people This is one of the facts that has historically been lost in the discussion, in my opinion
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Brian M. Rosenthal May 19
Replying to @brianmrosenthal
For years, government regulators warned that banks were lending to taxi driver-owners who could not afford their loans. But despite the warnings, top officials in NYC, Albany and Washington did little to stop the crisis. Here is Part 2 of our series:
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Brian M. Rosenthal May 19
Replying to @brianmrosenthal
Under Mayors Michael Bloomberg and Bill de Blasio, NYC made more than $855 million by selling taxi medallions and collecting taxes on private transfers. But in the quest for revenue, the city allowed an iconic industry to fall into crisis
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Brian M. Rosenthal May 19
Replying to @brianmrosenthal
On February 26, 2014, NYC held its final independent taxi medallion auction. At the time, concerns about medallion prices were becoming common, and Uber was expanding. But the city still sold to more than 150 high bidders 40% of them are now bankrupt
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Brian M. Rosenthal May 19
Replying to @nytimes
To report our series on the taxi industry, the interviewed 450 people, reviewed thousands of documents and built a database of every medallion sale since 1995. But most importantly, we listened to lots and lots of cabbies like Mohammed Hoque
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Brian M. Rosenthal May 19
The project was edited by the great It was fueled by compelling photojournalism & contributions from , , , , , , , & more Read their work
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Scott Karnish May 19
And no way they pay $1,200/mo for insurance.
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Brian M. Rosenthal May 19
Since I’m getting Qs on this: These are estimates by Mr. Hoque, but they‘re in line with multiple city studies The costs are higher than you‘d think bc Mr. Hoque had a 2nd driver, so he had to pay workers comp insurance & his cab was on road 24 hrs/day, spurring more maintenance
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Donut Shorts May 19
Replying to @thehowie @ddshore and 2 others
It is dramatically understated. The story also completely ignores the role of interest rates in determining medallion values. Sigh. Everything has to fit the narrative at NYT.
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Brian M. Rosenthal May 19
The disconnect is you’re looking at overall industry revenue, & we‘re looking at per-cab revenue There are 2,500+ fewer cabs on road today — 20% of total — than pre-Uber (due to bankruptcies etc) Of course cabs that aren’t operating aren’t making money. That‘s besides the point
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