A pair of New York taxi drivers have filed a $2.56 billion lawsuit against New York City, accusing officials of raking in millions of dollars from taxi drivers over debt repayments for taxi medallions, which are the transferable permits that allow taxicabs to operate in New York.
Medallion or smartphone
At one point in 2011 buying a taxi medallion would have cost you more than $1 million, an enormous sum which was often borrowed and paid back over the course of many years of driving.
Once Uber and Lyft showed up, the options for would-be drivers became a lot cheaper. Because you can't "flag down" an Uber on the street (instead specifically requesting they come to you) Uber drivers have never needed a taxi medallion — if you had a smartphone and a car you were pretty much good to go. As ride-hailing grew, the price of a taxi medallion plummeted — by as much as 80%, leaving some yellow cab drivers furious over what they believe were overly inflated prices given the circumstances.
Threat of extinction
The pandemic hasn't been kind to New York yellow cabs. According to data from the NYC Taxi & Limousine Commission, before the start of the pandemic yellow taxis were doing around 200,000 trips a day, fewer than Uber but still more than ride-hailing app Lyft. The pandemic collapsed the entire industry, but ride-hailing has recovered significantly faster — the latest count puts yellow taxi trips at just 50,000 a day. That's roughly a quarter of the volume they were doing pre-pandemic, and just one-tenth of the volume from a decade ago. The yellow cabs of New York are in trouble.
