By KAREN MATTHEWS – Associated Press
NEW YORK (AP) — New York City taxi drivers who owe hundreds of thousands of dollars on loans they took out to operate yellow cabs will see their burden significantly reduced under a tax relief program. debt announced on Tuesday.
Under the program announced by city officials, the New York City Taxi Workers Alliance and taxi medallion lender Marblegate Asset Management, the loans of 3,000 drivers who owe an average of $550,000 will be restructured down to a maximum of $200,000. Of that amount, $30,000 will be covered by a grant and the balance will be secured by a city-backed guarantee, officials said.
The city-backed guarantee means drivers won’t risk losing their homes if they default on payment, said Bhairavi Desai, executive director of the Taxi Workers Alliance, a drivers’ union. “It’s life-saving and historic,” she said.
Many taxi drivers who borrowed to buy the medallions needed to operate a yellow cab found themselves deeply in debt when the value of a medallion fell from over $1 million in 2014 to $200,000. several years later. Taxi industry representatives charged predatory lending practices as good as ride-sharing services like Uber for the crisis.
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City officials, the taxi alliance and Marblegate reached an interim debt relief deal in November last year and have worked out the details over the past few months. Under the plan announced on Tuesday, medallion owners can apply to refinance their loans from September 19.
Andrew Milgram, managing partner and chief investment officer of Marblegate Asset Management, said drivers shouldn’t wait to apply. “With a rapidly changing economy, it is critical that drivers take action in September to achieve meaningful debt forgiveness and a significant reduction in their monthly loan repayments,” Milgram said in a statement.
Mayor Eric Adams, a Democrat, welcomed the deal reached by members of his administration, including the Taxi and Limousine Commission.
“Our taxi medallion owners and drivers have always moved New York City, and it’s finally time to pay with real debt relief for owners in need,” Adams said. “We’re probably putting tens of thousands of dollars back in the pockets of these owner-operators and showing them what real relief looks like.”
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