With ridership down about a third of what it was
just five years ago, Ubers and Lyfts
outnumbering cabs by 9-to-1 and a medallion
crisis that left its drivers drowning in debt,
yellow taxis remain an iconic symbol in New York.
Over the years, they've appeared in countless
movies, TV shows, and have been a reflection of
the city's cultural identity.
Any picture of New York, it has one of a handful of
things in it. It either has the Statue of Liberty,
the Empire State Building, Central Park, or
yellow cabs.
But it's a tough job with drivers on average working
9½ hours a day, 6 days a week.
And more than 90% of drivers were born outside
of the U.S.
The car payment insurance, the gas, the toll.
You know, sometimes I miss payment.
I get to pay my credit card to pay the bill, the
mortgage.
Taxi driving historically has had a huge turnover
rate because the job is so hard, and these days,
especially with lease hiring, you have to pay
money to make money.
Most drivers I talk to now don't make a cent
until Wednesday.
The taxi industry in New York has been no stranger
to confrontation and resistance, and the Taxi
Workers Alliance has advocated for drivers for
the past 25 years.
We've had strikes against the Taxi and Limousine
Commission, our regulator. We've had a
hunger strike against a mayor.
We've had protests against garages and hedge
funds. And now Uber and Lyft, which are large Wall
Street-backed companies.
So we've had to fight on so many fronts.
Taxis in New York started in the form of horse and
buggies, which were used until the early 1900s.
The Electric Vehicle company was the first taxi
car company in New York that saw some success.
It continued to use electric vehicles until
the company collapsed with the rise of
combustion engine cars in 1907.
The fares were inexpensive compared to today.
New York's middle class could handle them, and
that's one of the reasons why taxis became so
popular so quickly.
The infrastructure of New York is not perfect, but
things like the yellow cab system are central to
its function.
And it became a popular way to travel among the
middle and upper classes.
After the 1929 market crash, an increasing
number of workers wanted to drive taxis.
New York City had about 30,000 taxi drivers in the
1930s. As a result, Mayor La Guardia implemented the
Haas Act, giving the city official jurisdiction over
the industry and limiting the number of licensed
taxi drivers to just below 17,000.
Initially, when they were put out, they were sold
for $10 a piece.
But unregulated car services were still
picking people up off the streets, especially in the
outer boroughs. As a result, all official taxis
were painted their iconic yellow color in the 1960s.
The Taxi and Limousine Commission was created in
1971 to regulate the taxi business outside of
Manhattan and illegal or jitney operations.
And this came out as a result of yellow cab
drivers being unwilling, either for reasons of
prejudice or because they didn't want to serve the
outer boroughs, being unwilling to go to Upper
Manhattan, to Brooklyn or Bronx.
Driving a taxi was also becoming more dangerous.
At the time, crime in the city was rampant due to
the economic decline and drug epidemic.
Over 200 cab drivers were murdered in New York from
1980 to 1994.
And in 1991, efforts to organize taxi drivers
began to find success and the New York Taxi Workers
Alliance was eventually formed.
A medallion is a metal license affixed to the
hood of a yellow taxi.
It gives the holder exclusive rights to
operate that taxi in the city and acts as a permit,
indicating that the driver is legally allowed
to pick up passengers on the street.
They're typically bought through an auction, which
has seen prices soar over $1 million.
This is Richard Chao.
He's been driving for the past 17 years and owns one
of the roughly 13,000 medallions in the city.
So after driving like about six months and then
I decided to buy the taxi to the medallion.
Medallion prices remained relatively low for decades
after their inception.
It's only in the last 15 or 20 years that it's
really gone up way in value.
Actually, it was only worth $25,000 or $30,000
as recently as 2000.
You know, I'm making American dream, so making
money, support my kid.
My younger brother, he saw me do it and I'm doing
good, and as a driver you support, make money,
support a family and he also interested to buy the
medallion.
Medallion prices were artificially inflated in
the early 2010s due to predatory lending the lure
of a rare asset and industry leaders purposely
overpaying.
And then in 2010, he bought the medallion from
the New York City. He paid $700,000.
So after that, the Uber and Lyft come in this the
taxi industry.
We lost almost 50% of the revenue.
So and my younger brother, he not make
enough money to pay back the loan he borrowed from
the bank.
A lot of people do blame Uber and Lyft and the
other high frequency dispatch companies for the
problem. And while they certainly catalyzed the
recognition of the problem, the real problem
started years before, and it started in much the
same way as the mortgage crisis.
Andrew Milgram co-founded Marblegate, which is
currently the largest private medallion lender
in New York.
The medallion was once valued at $1 million, and
then that price crashed at its low point.
It was around $70,000.
Meanwhile, the debt that the medallion owners are
carrying on average were about $450,000, so it was
impossible to keep up with a mortgage of
$450,000 when the revenue from the streets could
only support capital at about $70,000.
And as a result of that, we saw massive
bankruptcies, foreclosures and just a
tremendous crisis of poverty for the owner
drivers who could not afford to go bankrupt.
So in 2018, he committed suicide.
He jumped to the East River and I lost my
brother. I'm heartbroken.
But I'm strong, I keep fighting.
And for the, for our crisis, the taxi industry
crisis. I don't like to, I don't want to see
another driver commit suicide like my brother.
Kenny was one of nine drivers who died by
suicide after struggling to find work in a
saturated industry, several of whom also had
the pressures of hundreds of thousands of dollars in
debt after purchasing a medallion.
The medallion crisis has been a really painful
chapter in the history of this industry.
I mean, the fact that this was a crisis that
that's been marred by suicide really says it
all.
Dozens of protests took place following the driver
suicides. After going on a 15 day hunger strike,
the drivers reached a deal with Mayor de Blasio
on a Medallion relief program in 2021.
Since then, over 1,800 drivers have been relieved
of over $400 million worth of debt.
That's not an easy feat.
Right? And what this really means to a taxi
driver was that they had about $750,000 worth of
debt, some of them, and it brought it down to
$170,000 with a city back guarantee.
Since the popularization of Uber and Lyft in New
York City and the subsequent fall of taxi
medallion prices, e-hailing has become the
norm. Uber and Lyft launched in New York in
2011 and 2014, respectively, and by 2016
already had about 40,000 cars in the city.
We were fighting for a temporary one year cap on
the number of new vehicles, so the city
could really study the impact of all these cars.
And in one weekend, Uber famously spent $10 million
in lobbying to destroy that bill.
This said taxi drivers see a roughly 50% drop in
trips from 2013 to 2019.
We worked with the New York City Council over a
three year period, and in 2018 we put in a strict
cap of new vehicles entering the Uber and Lyft
and traditional for-hire vehicle markets.
And that cap stood at about 125,000 vehicles and
in our perspective, way too many vehicles at that
time.
Covid made life even worse for taxi drivers.
A lot of drivers move to different areas of work,
right? They left the industry and we saw that
that dive from 125,000 vehicles to about 100,000
vehicles. And that's where we are today.
So going into Covid, the taxis has declined to 22%,
so from 47% share to 22%.
And ride hailing had grown from 53% to 78%.
During Covid, effectively, taxis went to almost zero,
actually bottomed out at 5%. And the ride hailing
actually was 95%.
And with the market now flooded by roughly 80,000
on-demand car drivers, taxis have continued to
struggle finding work.
It's been pretty consistent now for almost
two years, with ride hailing at 86% of the
volume in the New York Tri-State area versus
taxis at 14%.
And so really what it tells you is that the taxi
industry has kind of really ceded a massive
amount of share.
And Uber is showing no signs of slowing down.
While it has struggled with profitability over
the course of its existence, it has turned
the tides in recent years.
Last year, they had free cash flow of about $400
million. We estimate this year it'll be about $3
billion and within two years, it's $6 billion,
$6.5 billion. So, I mean, they basically are at a
point where like they can then invest that money and
grow.
After years of neglect, many involved in the
industry are continuing to push for innovation and
improved working conditions in the city.
The industry had stopped treating its most
important customer with respect and value and that
customer is the driver, because at the center of
the industry is the driver and what they are
doing on a day-to-day basis.
It's a difficult job.
It's a very, very hard, lonely job.
And the industry as a whole, especially taxis,
is still recovering from the pandemic.
There is a 5% increase in monthly trips for both
medallion and outer borough taxis from
February 2022 to February 2023.
And when I first came in, there was over 7,500
vehicles in storage or half the fleet.
Today, there is about 5,000 vehicles in storage
and 8,000 active taxis.
And what that means is that the industry is
recovering and that passengers are choosing
with their money.
New York and the TLC are also working on shifting
taxis away from gas and toward electric vehicles
to improve air quality, noise pollution and carbon
footprints.
We are slowly ramping up, and what we're thinking is
that by 2024, there will be some sort of number
that will hit, about 6%, electric vehicles and then
ramp up all the way to 2030 by 100%.
Apart from switching to electric vehicles, the New
York taxi industry has made other efforts to
innovate and keep up with e-ride hail apps.
Uber and Lyft have partnered with Curb and
Arro, so you can e-hail a yellow taxi through their
apps. However, using Curb and Arro can mean a loss
of fares for taxi drivers. These apps make
up less than 1% of overall trips by yellow
cabs.
Uber, collaborating with Curb and Arro has not been
good for the drivers because it's been an
attempt to really lower the amount that drivers
have a right to earn on every trip.
New York also recently confirmed that the first
congestion tolling in the U.S.
will be coming to the city sometime early next
year and will charge drivers up to $23 to enter
Midtown and Lower Manhattan. While it would
only require taxis and for-hire vehicles to pay
the toll once a day, the loss could still be
detrimental for drivers struggling to make ends
meet.
What's really urgent for the yellow cab industry is
fighting for an exemption from a congestion pricing
scheme that the state wants to implement and to
finish up our fight on the medallion debt
forgiveness.