New York City will launch a $65 million “relief fund” to help taxi drivers restructure their debt, Mayor Bill de Blasio said Tuesday.
The fund will provide “financially-distressed” drivers a zero-interest $20,000 loan plus another $9,000 to restructure the debt on their medallions, which the city sold them at a premium based on the dubious promise of future dividends.
The relief fund will be paid for using money from the federal $1.9 trillion COVID-19 relief bill that was passed by the US Senate over the weekend, and is expected to clear the House this week.
Taxi drivers, many of whom were already struggling to repay their loans before the COVID-19, have been financially devastated by a massive drop in ridership in the last year.
“Many medallion owners are struggling and have asked for assistance from the city,” said Aloysee Heredia Jarmoszuk, the chair of the city’s Taxi and Limousine Commission.
“We understand the gravity of their situation. They need help with this with this debt to survive.”
But de Blasio’s plan falls short of the desires of the New York Taxi Workers Alliance, which has called for a gigantic bailout to cut every driver’s debt to $125,000, with the city providing the money to make it happen.
The NYTWA proposal is supported by a number of prominent political leaders, including Attorney General Letitia James, who last month backed off an $800 million suit against the city over the situation — saying massive debt-restructuring was the better course of action.
“This isn’t going to be nearly enough,” tweeted State Sen. Jessica Ramos (D-Queens).
“Average owner-driver debt was at $500,000 prior to the pandemic. We need real debt forgiveness and a robust plan so no more taxi drivers face bankruptcy and lose their homes, their retirement savings, or worse.”