Think about seeing your retirement account balloon to $1.three million after which crash to $140,000. That’s primarily what’s occurred to hundreds of New York Metropolis taxi drivers.
Every NYC yellow taxi wants a medallion, which is sort of a license, so as to function legally. Drivers can lease or purchase them. New York Metropolis and state cap the full variety of medallions, and there are lower than 14,000 of them obtainable at this time.
For many years, that shortage made medallions a seemingly protected funding. Cab drivers who saved up a 10 % downpayment might finance a medallion by way of a credit score union. So long as the medallions stored growing in worth, the drivers might construct fairness, which they might then use as collateral to purchase a home or ship their youngsters to school. As soon as they reached retirement age, they might lease the medallion to a different driver for anyplace from $three,000 to $three,600 a month, or promote it and maintain the income.
New York Metropolis periodically auctions off new medallions (the final one was in 2014), however most gross sales contain present medallions.
However medallions are value solely as a lot, or as a bit, as consumers are prepared to pay for them. And with the rise of Uber, Lyft, and different rivals that don’t require pricey permits, many medallion house owners are dealing with a a disturbing actuality: medallion costs have plummeted prior to now three years.
VICE Information met with three medallion house owners to see how the crash in medallion costs is affecting their lives.