NY Cabbie Hunger Strike Wins Big!

NY Taxi Workers Alliance (NYTWA) announce a big win with the city and loan agencies at a Nov. 3 press conference next to City Hall in Manhattan. At center holding the mic, is Bahravi Desai, NYTWA Executive Director. (Photo: Marty Goodman)

By Marty Goodman

On Nov. 3, hunger striker and taxi worker leader, Bahravi Desai, shouted out to an exuberant crowd of taxi workers and supporters, “We won! We won!” as a deal was struck with the city to reduce loans on the artificially inflated cost of city-issued taxi medallions.

The hunger strike, located in an encampment next to City Hall in Manhattan, began Oct. 20, preceded by a temporary NY Taxi Workers Alliance (NYTWA) occupation of the Brooklyn Bridge in September.

Desai, the Executive Director of the NYTWA told the crowd, “Today marks a new dawn, a new beginning for a workforce that has struggled through so much crisis and loss. Today, we can say owner-drivers have won real debt relief and can begin to get their lives back. Drivers will no longer be at risk of losing their homes, and no longer be held captive to a debt beyond their lifetime.”

The NYTWA’s 21,000 membership includes yellow cab, green car, black car, livery and app-dispatched drivers. About 80 drivers and supporters participated in the hunger strike, said Desai.

The loans, which targeted mostly non-white immigrants, mostly from South Asia, were issued by banks, finance companies and hedge funds, with the connivance of Republican and Democratic mayors. Loans averaged $550,000 but went as high as $1.2 million. Monthly loan payments were about $2,100 in a city where rent skyrocketed. In addition, COVID-19 sharply reduced street fares and, beginning in 2014, competition from the massive introduction of Uber and Lyft car services, unregulated by the city, dramatically decreased income and plunged medallion values down from over $1 million in 2014 to $80,000 today.

New York City collected $855 million from medallion sales under mayors Michael Bloomberg (2002-2013) and Mayor Bill de Blasio (2014-2021), according to the NY State Attorney General’s office. The practice began under billionaire Mayor Michael Bloomberg, who used medallion sales to plug his $3.8 billion budget gap. 

Drivers worked up to 100 hours a week or more but were mired in poverty. Nine drivers committed suicide since 2018. Driver Doug Schiffer, who worked 120 hours a week, shot himself in 2018 on the steps of City Hall. Democrat and self-proclaimed “socialist,” NYC’s Mayor Bill de Blasio, received large taxi industry campaign donations. 

The new agreement with the city reduced the loan to $200,000, actually $170,000 with a $30,000 grant from the city. Loans are at a 5% interest rate over a 20-year term. Monthly payments are reduced to $1,100. The NYTWA also said that drivers who may be forced to give up their medallions for non-payment, “will be protected from foreclosure on their homes or garnishment of their bank accounts.”

Pakistani-born driver Abdul Malik told the LaborPress, “Today we won. People became united in a very miserable time. Nobody knew what they were going to do, other than just die. A lot of people killed themselves. A lot of people died of heart attacks. Why couldn’t they see before what they were doing to the people,?” added Malik. “This is one of the most transformative wins of my 25 years, and I’m so proud to celebrate it with my father, a driver for 30 years,” said Jaslin Kaur of Queens. “To me, this is historic,” driver Victor Salazar  said. “I cannot describe it. I am full of joy.”

In an interview Desai spoke with Socialist Action, “It was honestly a beautiful campaign and our victory was just and has been thrilling. In the midst of such pain and crisis we developed such strong solidarity to hold the line until victory against tremendous odds and sacrifice and consciousness. This is a group of workers who a few years ago had seen the depths of despair. So many have taken their lives and so many others talked contemplating it. So, to go from the depths of despair, drivers, mostly immigrants of color, to camp out next to City Hall in the biggest city in the world you can sense that victory is around the corner.”

The racist con job

“I don’t think I could concoct a more predatory scheme if I tried,” said Roger Bertling, the senior instructor at Harvard Law School’s clinic on predatory lending and consumer protection. “This was modern-day indentured servitude.”

“The whole thing was like a Ponzi scheme because it totally depended on the value going up,” said Haywood Miller, a debt specialist who has consulted for both borrowers and lenders. “The part that wasn’t fair was the guy who’s buying is an immigrant, maybe someone who couldn’t speak English. They were conned.”

“It’s an unhuman life,” one driver said. “I drive and drive and drive. But I don’t know what my destination is.”

Powerful exposés of the taxi industry in the May 2019 NY Times written by Brian M. Rosenthal revealed that medallion prices were artificially raised to dramatically increase profits. As prices rose, lenders increasingly lent to immigrants.

Almost every loan reviewed by Rosenthal, “included a clause that spiked the interest rate to as high as 24 percent if it was not repaid in three years. Lenders included the clause — called a “balloon” — so that borrowers almost always had to extend the loan, possibly at a higher rate than in the original terms, and with additional fees.” 

“By 2014, however, the price of these medallions had risen to over a million dollars each, up from $200,000 in 2002. This was caused by fleet owners who deliberately bid up prices in order to inflate the value of their own holdings and the manipulations of predatory lenders seeking new investment opportunities after the crash of the real estate market in 2008.”

Several banks used something called a confession of judgment. It was an obscure document in which the borrower admitted defaulting on the loan — even before taking out any money at all — and authorized the bank to do whatever it wanted to collect. Federal examiners repeatedly noted that banks were increasing profits by steering cabbies into risky loans, many requiring no deposit. Similar to the housing bubble crash, capitalists spread the scam throughout the U.S. taxi industry.

In 2014, the city received federal funds slated for the taxi business. De Blasio gave the money to lenders, including hedge funds – not drivers – who targeted drivers for predatory loans. In 2012, Mr. de Blasio received far more money from the taxi world than any other mayoral candidate. Since late 2011, the “socialist” de Blasio received more than $100,000 in taxi industry donations in his first mayoral bid, according to city documents. When de Blasio ran for mayor in 2013, an industry lobbyist, Michael Woloz, was a top fund-raiser. Evgeny Freidman, a major fleet owner who has admitted to artificially inflating medallion prices, has said he is close to the mayor.

Ahead of medallion auctions, as prices were rapidly inflating, the Taxi & Limousine Commission (TLC) heavily promoted it, calling it a “once-in-a-lifetime opportunity.” Ads were placed on television, radio, newspapers calling medallions a “once-in-a-lifetime-opportunity”, and “a chance at the American Dream.”

Seven government agencies had oversight over the entire bloodsucking industry but did nothing. The TLC, the city’s policy making body, did nothing against brokers who arranged medallion sales. Not one financial entity was fined.

Deepak Gupta, a former top official at the United States Consumer Financial Protection Bureau, said that NY State should close the loophole that classifies medallion sales as business-loans, even though borrowers must guarantee them with all of their possessions. Consumer loans have many more disclosure rules and protections.

The TLC and de Blasio promoted an inferior relief package, rejected by the NYTWA, but accepted by a minority of drivers out of sheer desperation. Randal Wilhite, a legal services attorney who dealt with implementing it said of the city’s boasts of success, “These claims are patently false,” he told the “New York Focus,” essentially describing the program as a sham.

Meera Joshi, who became TLC chairwoman in 2014, said “It was a party. Why stop it?”

No Justice, No Peace!

New York City is the capital of world finance, the home of Wall Street. Democrats occupy both City and State governments, yet immigrant taxi workers, mostly South Asian, also Haitian, Ecuadoran and others, yet were left to starve, loose their homes, work like slaves and/or commit suicide. Politicians like de Blasio should be investigated for their role and face jail time if found complicit with taxi bosses!

Truly shameful, not one union in NYC’s huge labor movement marched in solidarity – let alone strike! – during the historic hunger strike. They’ve proven once again that the city’s overpaid union leadership is part and parcel of the boss-run Democratic Party. That includes the Transport Workers Union Local 100, the public bus and train workers, who are now supporting an organizing drive by a scab drivers’ union, opposed by the NYTWA.

In 1996, at a press conference organized by the rebel New Directions caucus of Local 100, Bahravi Desai pledged that cabbies would strike in solidarity if Local 100 went out. That threat of an all-transportation walkout greatly alarmed right-wing Mayor Rudi Giuliani and Wall Street. In 2005, during Local 100’s massive strike, many cabbies refused to work. The TWU owed the taxi drivers its militant solidarity!

NYC needs more public transportation at top union wages under workers’ and riders’ control. We say, “NYC, rip up the criminal taxi loans!” “Jail the banker and hedge fund criminals!”

Socialist Action is a working-class party – join us!

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