The wave of suicides among cabbies thrown impossibly deep into debt by the collapse of taxi-medallion prices is tragic enough. Now it turns out that the political power of their own industry bears a huge chunk of the blame.
Since the bottom fell out, many have fingered Uber, Lyft and other ride-share services. But before ride-share arrived, The New York Times reports, regulators were already deeply worried about a speculative bubble in the medallion market.
The cost of a taxi medallion soared from $200,000 in 1999 to $500,000 in 2006 to $1.3 million by 2013. Today, that same medallion sells for less than $250,000, a huge loss for both those who bought high and those who refinanced at the top. Nearly a thousand have filed for bankruptcy, while others have lost their life savings.
The bubble was fueled by lenders who worked to jack up prices and sell zero downpayment, interest-only loans to people looking for a piece of the American dream.
Never mind that the annual take from the medallion wasn’t enough to make the loans rational. Just as in the pre-2008 housing bubble, the idea was that prices would keep going up, so you could always sell.
The federal credit-union regulators who might have blown the whistle had been sidelined by legislation years before — thanks to the taxi industry’s political pull. State financial regulators now say they took their signals from the feds. It seems the staff at the city Taxi & Limousine Commission was also captured: At least, any warnings never sounded all the way to the top.
Mayor Bill de Blasio took office with all the wrong incentives, too: His 2013 campaign hauled in more than $550,000 from the yellow-cab industry. The industry’s top lobbyist, Michael Woloz, bundled $237,000 for Team de Blasio that year.
De Blasio’s not alone: The industry had friends from ex-Sen. Al D’Amato to ex-Gov. Mario Cuomo.
None of them meant the tragedy to happen. But they were part of a web of insider influence that wound up silencing alarms that should have sounded.
Uber, Lyft and the rest have been getting the blame that should go to New York’s corrupt political culture.
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