'They Were Conned': How Bankers Devastated Thousands Of New York City Taxi Medallion Owners
The last decade saw a bubble that rivaled the subprime mortgage mess that arose in 2004-2006.
With low interest rates, banks were flush with money to lend. This caused a lot of bubbles to arise in many different asset classes.
One of the ones overlooked is with taxi medallions. New York City cab drivers, many who were immigrants from other nations, saw their American dream turn into a nightmare. Over the last decade, brokers and fleet operators got rich off the cab drivers who were forced to buy inflated medallions. Some might say the market was completely manipulated.
The price ran up from $200,000 to over $1 million per medallion. Almost all of this was financed and now are seeing defaults. The price went up while the money cab drivers were pulling in remained flat. Over the passed couple years, the bubbled popped with a 50% reduction in the value of these assets.
This is leading many cab drivers to end up in dire straights. Six drivers committed suicide in the past half year due to the onus placed upon them.
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