As taxi lender grabs medallions, taxi drivers are caught in the carnage
Sutirtha Bagchi, professor of economics at Villanova University who recently conducted a study on medallion prices, estimates the asset’s value at $ 400,000. His calculations combine data on fare totals, medallion loan interest rates, labor costs, and Google Trends search results, which he used to track Uber’s growth.
Thomas O’Shea, CEO of Aspire Federal Credit Union, estimates the value of a locket between $ 450,000 and $ 550,000. But the estimates are almost academic as there is essentially no market for the asset.
“This is the year 2008 for the taxi medallion industry,” said Richard Feinsilver, a bankruptcy lawyer with offices in Queens and Nassau County, referring to the mortgage crisis. Over the past six months, he has met over 200 locket owners and drafted personal bankruptcy files for about 100 of them. In the past month, nearly 50% of the owners he met were Melrose customers.
“Everyone got caught with their pants down when Uber walked in,” he said. “No one foresaw the monster he would become.”
He added that Chapter 7 bankruptcy protection doesn’t work for everyone, but it has given its clients a fresh start. Many of them still drive taxis but rent rather than own.
“They realized they had to change their business model,” Feinsilver said. “These loans were no longer worth it.”
But the loss is still hard to swallow. Medina painted her yellow Camry gray and turned it into a personal car. He also started driving a friend’s cab, paying $ 110 for each 12-hour day shift.
“I would like to move on,” he said, “but that’s the only thing I know.”