🚖📘 Better Late Than Never, TLC Publishes Taxi Medallion Report
TLC publishes overdue 2021 & 2022 Office of Financial Stability (OFS) Annual Report(s). Medallion debt relief real achievement, but report lacks detail. Why are 4,000+ yellow cabs still inactive?
TLC’s Office of Financial Stability (OFS) published overdue 2021 & 2022 taxi medallion reports
$440 million+ debt has been forgiven and TLC has done an excellent job managing the Medallion Relief Programs (MRP(+)) & Owner/Driver Resource Center (ODRC)
Not clear why 4,000+ yellow cabs are still inactive (this is THE question many want answered, but is unaddressed in OFS report)
Prior to pandemic, in February 2020, there were 11,427 working medallions. Based on latest TLC data (October 2023) there are 8,826 active medallions or ~23% fewer active yellow cabs
Just before 2023 ended, the Taxi & Limousine Commission (TLC), published both the 2021 & 2022 Office of Financial Stability (OFS) annual reports. As we’ve previously reported, with the help of AutoMarketplace friend Carolyn Protz, these reports were overdue. It appears the 2021 report was overdue by over a year 👀. The 2022 report was overdue by about two months.
Quick Background
In 2020, NYC Council approved (49-0) the creation of the TLC Office of Financial Stability (OFS). OFS, which became active in November 2020, oversees the financial stability of the NYC taxi medallion industry.
Starting in November 2021 and each year thereafter, the OFS would assess and create recommendations using key data points with the “goals of strengthening and supporting medallion owners and drivers.”
According to TLC’s website, the OFS would evaluate the following factors (but not limited to):
The short and long-term financial stability of the medallion market
Potential market manipulation, speculation, or collusion by any participant in a medallion auction or transfer
The number of bankruptcy proceedings involving medallion owners
Common terms and conditions of loans used to finance a medallion purchase or transfer
Income and expenses associated with operating a medallion
TLC would base a lot of their evaluation through requiring medallion owners to submit a Medallion Owner Financial Disclosure, which would include:
List of all medallion taxicab licenses that one is filing a disclosure for
Income and expenses related to operation of a medallion taxicab(s)
Total liability insurance premiums paid for the operation of the medallion taxicab(s)
Number and balances of all loans for the medallions
Number of medallions that serve as collateral
Bankruptcy filings, if applicable
Any interest that a medallion owner has in a business or service that is related to taxicab, livery, or for-hire businesses that may or not be licensed by the TLC
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Real Achievements, Light On Details
TLC Chair David Do, and his team, should get a lot of credit for doing an excellent job 👏 of managing the Medallion Relief Programs (MRP(+)) and Owner/Driver Resource Center (ODRC). According to TLC’s presentation, $330+ million of debt relief for 1,500+ medallion owners, who own six or fewer taxi medallions, was delivered by the end of December 2022. Based on recent TLC testimony (see video below) to City Council, the debt relief figure is now over $440 million, representing 1,800+ owners and 2,200+ medallions!
This is an incredible achievement ✅. Let’s give TLC credit where it is due, as we don’t hesitate to criticize them when they fall short.
It’s also a great example of the TLC, City Government, Federal Government, drivers, advocates and private industry (lenders, investors, fleets) working together to agree to and push through a complex deal with a lot of different stakeholders.
Crisis Getting Better, Not Over
However, do not mistake good progress with resolution. The taxi medallion market is still in crisis. The TLC told City Council in October (see video above) that 16% of taxi medallion loans are more than 90 days delinquent and 21% are generally delinquent (loan > 30 days past due). The OFS report makes no mention of these stats or provide details, although TLC seems to have the information at hand.
TLC’s OFS report should have been a lot more detailed, especially given its covering 2021 and 2022. Setting aside criticism about submitting these reports on time, what’s more concerning is how policies, that clearly impact the yellow cab industry, were, and are, being implemented when the TLC doesn’t seem to fully understand the state of taxi medallion market. For example, one would think before the TLC issued a single *new* FHV License (TLC Plate), the regulator would want to fully understand the financial health of the medallion market? Or why 4,000+ taxi medallions are STILL not active? 🤷
The TLC actually admits in the OFS report that it still doesn’t fully understand the taxi medallion market and is working on it 🤔. That’s fine, but again, how is policy being made if one doesn’t understand such a critical part of the NYC for-hire vehicle market? Wasn’t the point of creating OFS to serve as a check on TLC policymaking? Reminding the regulator to track the financial health of yellow cab driver-owners much more closely, before creating policy that could significantly impact them?
“The financial disclosure requirement went into effect in 2022 for calendar year 2021. The data submitted by many medallion owners in 2022 and in 2023 is not reliable at this time and TLC is continuing to refine the data collection process to get a deeper understanding of taxi economics…
…TLC is working on obtaining a comprehensive picture of the debt situation across all 13,587 taxi medallions. Working directly with medallion owners gives TLC the opportunity to gather personal financial data that is not publicly available.”
- TLC Office of Financial Stability Annual Report (2021 & 2022)
Delivering a 17 slide presentation, one year late, with no real recommendations and benchmarking everything against all-time low 2020 taxi fare box figures, does not instill a lot of confidence. Again, TLC Chair Do has a history of failing to show he is doing the proper homework, before implementing policy. This is not a one-off now, this is clearly an observable habit and defining characteristic of his Commission.
Build Me Up, To Let Me Down
The TLC, unfortunately, undid a lot of the goodwill built up on the back of the successful implementation of the MRP/MRP+. From releasing 1,000 new TLC-plates in March 2023 to the SHL Pilot that (re)issued 2,500 additional ex-central Manhattan TLC-plates in May 2023 to allowing an additional ~10,000 new TLC-plated vehicles at the end of 2023. In other words, pushing policy that is set to add over 11,000 more NYC for-hire vehicles, when you don’t truly have an understanding of why 4,000+ yellow cabs are inactive, doesn’t make sense.
“We respect you, we’ve done good work together on the medallion-debt forgiveness, on the raise…But you, sir, you’re wiping all that good away right now…Adding 2,500 new cars, on top of the 1,000 that they just added with electric vehicles, that is a significant increase in this industry when ridership is still down by 30%” from 2019.”
- NYTWA President Bhairavi Desai speaking to NYC TLC Chair David after the TLC Commission Board approved the SHL Pilot yesterday (Source: THE CITY)
Prior to the pandemic, in February 2020, there were 11,427 active medallions out of a total 13,587 medallions issued. Those 11,427 medallions were servicing 6.3 million trips per month in February 2020. As of October 2023, there are 8,826 active medallions servicing 3.5 million monthly trips. If the goal is to make all taxi medallions active again, what would you expect yellow cab driver earnings to be…today? If you add 11,000+ more FHVs, how would it impact those earnings? This is TLC 101.
Clearly, the TLC and OFS need to do a lot more than a 17 page presentation. OFS’ presentation is not capturing the ongoing crisis that is obvious to a simple observer when you look at the data and charts. 4,000+ yellow cabs are not active, WHY? We’ve waited far too long for the TLC to provide this answer, especially when they continue to add more TLC plates to NYC streets.
As always, let us know your thoughts in the comments section below or by emailing us at info@automarketplace.com.
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Im take a guess and say that 4000 yellow cabs are inactive, because quite frankly, there aren’t drivers that are willing to drive for them because the money is not there
One of the downfalls of yellow is that it’s very expensive to rent because it’s very expensive to operate and due to the reduction in passengers, it’s hard for a driver to make a decent living after expenses with Yellow Cab, the same can be said about for high vehicles at the moment. The fact of the matter is it that there is too many cars and not enough passengers