City Taxi & Limousine Commission officials were warned of a looming yellow cab medallion crisis years before swaths of drivers began losing their livelihoods, an internal memo made public Monday shows.
Gary Roth, a TLC policy analyst during 2010 and 2011, wrote a five-page memo in 2011 that said the quick rise of medallion sales prices from 2003 to 2010 outpaced the growth of the taxi industry.
“If the price of medallions dropped significantly, it could force recent medallion buyers underwater, meaning the value of their outstanding loan is greater than the current selling price for a medallion,” the 2011 memo stated. “In this case, owners may default on their loan, and have the medallion repossessed by the bank.”
The TLC sent the memo to City Council members Monday as the agency’s acting commissioner Bill Heinzen was grilled during a hearing at City Hall.
Roth’s report was prophetic. In 2014, dozens of medallions sold for more than $800,000. Not one has sold for more than $500,000 since the start of 2018.
Thousands of medallion owners are stuck in costly loans they are unable to pay off, as yellow cab income plunged by nearly 30% between 2013 and 2018.
The quick growth of Uber and Lyft correlates with that drop — but Roth’s report was sent out years before the companies launched in the city.
Heinzen, who started at the TLC in 2015 — four years after Roth’s memo — said the commission has been doing its best to help taxi drivers.
“We’ve been given a tremendous amount to do and I think we’ve done it really well,” Heinzen told Council members. “We were just given the power last year by you to cap the number of vehicle licenses.”
Heinzen added that Council members tried to put in a similar cap in 2015, but failed to do so amid an aggressive lobbying campaign by Uber. “That was a huge missed opportunity in 2015,” he said. “I think that could have stanched a lot of the problems here.”
