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NYC's taxi crash yellows
Can' you just jump behind the steering wheels of a bright red automobile and call yourself a New York taxi driver? Each taxi must have a New York City licensed taxi pedal, known as a taxi pedal, which is affixed verbatim to the bonnet of the vehicle. Medal prizes have risen sharply in recent years, by 50% between 2009 and 2014 to a high of more than a million dollars each.
A few riders own their own lockets, but often the lockets are held by taxi fleet operators. However, now the value of these lockets is taking a big toll as overcars flooding the town. In New York City there are 13,600 amber cabs. However, the rivalry of 20,600 Uber vehicles, which can readily be conjured up with an appetizer, has become a strong factor in the clientele of taxi owners.
In addition, many taxi riders choose to work at Uber instead, and that makes some taxi riders sit idly with an costly locket without earning any income. Part of the results of the taxi industry's shifting economy is the ongoing struggle between Uber and the City Hall. Bill de Blasio, the mayor of New York, advocates an efficient one-year suspension of new Uber vehicles.
Über has reacted with a high-profile PR drive in which de Blasio is accused of being in the taxi industry's pockets. A collapse in medals has led to a credit crunch for taxi drivers. A lot of homeowners take out credits to buy the medals, just as a home purchaser would take out a home loan.
However, these credits are only for several years, so that the owner must borrow again and again new credits. As the value of the locket grew, it was simple to do. However, investor largely and body part -- from Citigroup (C) to approval organization -- refuse to refinance debt for award holder.
At least one creditor, the New York Community Bank, wants to withdraw completely from the Medaillonsgeschäft. When taxi drivers cannot re-finance their short-term credits, creditors can confiscate the medaillons provided as security. This will push many out of the store, and the bulkhead selling of their locket will continue to depress them.
The Citigroup is attempting to confiscate 89 medals held by Evgeny "Gene" Freidman, the biggest medalist in the town, as their value has sunk. "The New York government must defend itself against a take-over that is being tried by a Mafia Silicon Valley in connection with predatory animal banks," Freidman said in a declaration.
"One can see a meltdown among taxi entrepreneurs and taxi companies all over the country when banking supports this industry...". About can now have a value of 50 billion dollars. About is not the only thing pushing down medal rates, says Andrew Murstein, chairman of TAXI (Medallion Financial), a credit provider that once specialised in such credits. Said that too many creditors granted too many medallions and created a financial bubble. He said that the creditors were not able to afford the money.
And now that some lending agencies are moving out, things are back to normal. Mr Murstein said that medal rates have dropped much more than the mean turnover of a taxi, which has dropped by only about 5%. "Medal prizes have fallen," he said, "but to be fair, they were too high at all."