Rep. Alexandria Ocasio-Cortez (D-N.Y.) called for a bailout of New York City cab drivers to alleviate the debt they have accumulated due to artificially inflated medallion costs, according to The Daily Wire.
"These taxi drivers need a bailout because this is not just about predatory collection practices ... this is manufactured financial indentured servitude and it is wrong," Ocasio-Cortez said Thursday during a congressional hearing. "We need to bail out these drivers, and I would like to invite my colleagues here on the federal level and our partners on the city level to make sure they get the job done."
Taxi drivers in NYC are in crisis. They are trapped in a predatory lending scheme that steals their earnings and ha… https://t.co/r3lnOYBzX7— Rep. Alexandria Ocasio-Cortez (@Rep. Alexandria Ocasio-Cortez) 1569619380.0
What is she talking about?
New York City taxi drivers must purchase medallions in order to legally operate a cab. The city, in order to make sure there aren't too many cabs on the street, limits the number of medallions it will issue.
As a result, the cost of the medallions has increased dramatically, peaking at $1.3 million in 2013 — then the bubble burst, dropping the price to $250,000 or less. But, many drivers had already taken out huge loans when the price was seven-figures, some with high fees or interest-only payments, and many of those have since filed for bankruptcy.
Life or death?
Ocasio-Cortez called the need for a government bailout a "matter of life or death," pointing to a recent suicide by a driver who said before his death that competition with ride-sharing services forced him to work 100 hours per week.
"Regulatory agencies knew, the city knew, and these suicides are not just an indirect side effect, they are a direct consequence of the neglect of a vulnerable community in New York City," Ocasio-Cortez said.
How much would this cost?
New York City Mayor Bill de Blasio has opposed a bailout, saying that it could cost NYC taxpayers up to $13 billion.
City Hall officials over the summer announced that it would not collect $1,100 medallion renewal fees from drivers, collectively saving drivers $10 million — helpful to some, but not enough in the eyes of Ocasio-Cortez and others.
"This, I think, is a matter of financial malpractice and predatory behavior that I think in many ways should be a national scandal. It is literally killing people," Ocasio-Cortez said.