How Covid exacerbated NYC taxi drivers’ long-standing debt from inflated fees

When Partap Singh bought a taxi medallion — a permit to independently operate a cab in New York City — in 1993, he thought he’d struck gold. As a Sikh immigrant from the Indian state of Punjab, he’d bought into the idea that the $140,000 investment was a ticket to a middle-class life.

For years, Singh woke up at 4 a.m. to work 16-hour shifts, six days a week. As a result of the grueling hours, he developed a host of serious health problems, including chronic back pain and eyestrain that required surgery.

But after three decades, Singh, 62, still owes more than $65,000 in medallion loans.

It’s a long-standing crisis related to bloated fees for licenses that has been aggravated by Covid-19, which has crushed demand for rides. Singh, who drives 60 hours a week, said he makes $10 an hour “on a good day,” which doesn’t always cover his costs. His loan and insurance payments, as well as gas, surcharges and repair fees, can add up to more than $3,000 a month. He is also behind on his medallion loan, credit card bills and property taxes.

“I have no future, no health care plan, no savings, no retirement, nothing,” Singh said. “I don’t know how we can survive in our old age and who’s going to take care of us.”

Last week, the city announced a plan to spend $65 million from a federal stimulus package on a relief fund to provide drivers with up to $29,000 in interest-free loans to refinance their debts. The proposal is the first concrete step the city has taken to address the plight of drivers. But driver advocates and some elected officials say it falls far short of the sort of bailout most drivers need. Every day and night last week, drivers protested the city’s plan outside Gracie Mansion, the mayor’s residence. 

In 2018, a spate of driver suicides exposed how predatory lending practices and government complicity trapped thousands of medallion buyers in risky loans they couldn’t pay back. Throughout the 2000s, industry leaders artificially inflated medallion prices from $200,000 to more than $1 million — by overpaying for and marketing them as foolproof vehicles for economic success — while extracting windfall profits from interest payments and fees. Since the market crashed in 2014, in part because of the rise of Uber and Lyft, nearly 1,000 owner-drivers have filed for bankruptcy.

The average driver today owes about $500,000 in loans, to be paid in monthly installments of about $3,000.

Now, in a market-cratering global pandemic, medallion debt has become a crisis for immigrant seniors, many of whom have drained their retirement savings and could lose their homes as they enter the twilight of their lives. The fallout could hit New York’s South Asian community particularly hard, as immigrants from India, Bangladesh and Pakistan make up more than 43 percent of the city’s cabdrivers, according to 2014 data from the city Taxi and Limousine Commission.

“These drivers have given 30 to 40 years of their lives to these streets of New York, and all they’ve incurred is debt,” said Bhairavi Desai, executive director of the New York Taxi Workers Alliance, a labor union representing 21,000 cab and ride-share drivers. “I think nine to 12 months from now, you’ll see massive foreclosures and bankruptcies.” 

More than 90 percent of drivers over age 62 have active loans, according to a recent survey the union conducted. Four in 5 reported being food insecure; 1 in 3 has either contracted Covid-19 or lives with someone who has.

The union also proposed a debt relief plan. In contrast to the mayor’s plan, it would reduce loans to a maximum of $125,000 and restructure monthly repayments to about $750. It would cost the city $75 million over 20 years.

Desperation over their situation has turned seniors into activists and pushed their adult children to run for office. Over the past few weeks, immigrant drivers have organized a series of actions to demand debt relief, including shutting down the Brooklyn Bridge and delivering searing testimony at Zoom hearings.

The medallion debt crisis has pushed Felicia Singh, a public schoolteacher and City Council candidate, and her family to the brink of homelessness. Last summer, her father lost his medallion — which he bought for a quarter-million dollars in 1988 — after he fell behind on his $3,200 monthly loan payments. In February, the bankruptcy court put their home on the market, giving the Singhs less than 80 days to scrape together $100,000 in debt settlement.

The city’s failure to advocate for working-class people, Singh said, is one reason she’s campaigning to represent Southern Queens.

“The hard part here for me is that nine people have taken their lives, and that was not enough for the city to stop and do something,” she said. “Us being unhoused in a pandemic is still not making the city move with urgency.”

Desai said elder South Asian drivers also have to navigate language and cultural barriers in seeking social and public health services. In many cases, she said, the lack of appropriate language resources has limited their ability to get vaccinated, apply for pandemic relief loans and file for unemployment benefits.

At the same time, working into old age can cause complications for a group with underlying health conditions.

The Taxi Network, a research and community health program developed by the Memorial Sloan Kettering Cancer Center’s Immigrant Health and Cancer Disparities Service, organizes free health fairs for drivers at taxi garages and community-based organizations. Doctors said that when they conducted health screenings in South Asian enclaves, they found staggering rates of unaddressed hypertension, high cholesterol and diabetes.

“South Asians have added risk of propensity for metabolic syndrome, so they’re at tremendous risk for heart disease,” said Dr. Francesca Gany, a co-founder and director of the initiative. “It’s a terrible problem that could be addressed by taking some financial stress off drivers.” 

For many working-class South Asian immigrants, the lasting legacy of the medallion crisis may be the accumulation of generational debt.

When the medallion market crashed in 2014, Partap Singh’s daughter, Jaslin Kaur, had just begun her first year in college. With medallion prices plummeting, her family could no longer finance her education, so to finish school, she had to take out a hefty loan, which she is still paying off today.

“It’s a number of crises all at once,” she said, adding that her family’s financial struggles inspired her to run for a City Council seat this year in an Eastern Queens district with a large working-class South Asian population.

Fighting for debt relief “is about labor justice,” Kaur said, “for people who were effectively scammed out of something that was meant to provide a pathway to economic stability and economic prosperity.”