End of the Ride? The yellow taxicab is one of New York's most timeless icons, but the industry is facing a crisis. Can the medallion men survive within a ride-hailing landscape that is changing so rapidly?
The iconic yellow taxi is a timeless component of the city's identity that has been brought to life in popular culture--just look at the classic yellow Checker cabs in films such as Taxi Driver and Breakfast at Tiffany's, TV shows such as Taxi and Friends, and songs such as Joni Mitchell's Big Yellow Taxi. It's as synonymous with New York as the Statue of Liberty, bagels and pizza.
But when I hail a yellow taxi back into Manhattan, my driver, Mohammed, tells me that New York's taxi industry has changed dramatically in the past eight years--including its colour palette. While the changes have been positive for New Yorkers--making it easier and cheaper to get a taxi outside Manhattan--they have left the yellow taxi industry in crisis. Far from living the American Dream, drivers have been left in financial ruin.
There are two types of yellow taxi drivers: owner-drivers and lease-drivers. Owner-drivers own the medallion--the official license needed to drive a New York yellow taxi. Lease-drivers, such as Mohammed, rent the medallion from the owner on a weekly basis or per shift. Most of New York's medallions are owned by companies that lease them to drivers.
Medallions have historically been valuable because demand has always outstripped supply. In 2011, there were 13,587 yellow taxis in New York, serving 8.5 million people. The huge demand for and undersupply of yellow taxis meant that the value of the medallion skyrocketed. That same year, two medallions sold for $l million each. Prices peaked in 2013, when they were thought to be worth $1.05million. Their value had quadrupled in a decade.
Buying a medallion meant that drivers could work for themselves, make a comfortable living and build up personal wealth as the value increased. Six years ago yellow taxi drivers saw it as their chance for retirement money or savings that they could pass on to their loved ones. Now, the once-shiny medallion has lost its lustre. The market has become so oversaturated with competing taxi services that the value of the medallion has plummeted, leaving owners in severe financial hardship. For the yellow taxi drivers who took out loans against million-dollar medallions, the world has come crashing down.
'I know a guy who got his medallion for $1 million,' says Mohammed. 'Now it's worth $200,000.' This means that medallion prices have dropped roughly 85 per cent in just six years. A New York medallion is now valued at between $160,000 and $200,000.
As well as losing their safety net and the money they were relying on for retirement, some medallion owners are now seriously struggling to make their monthly loan repayments. For lease-drivers, Mohammed tells me the only way to cover the $105 daily lease fee and expenses such as fuel and maintenance (which yellow taxi drivers are responsible for) is to work long hours and have few days off. In 2018, the average yellow taxi fare was $13.61 and the average trip distance 3.7 miles--about seven trips just to cover the lease fee. 'Some of us, we work seven days a week,' he says. 'You can't work five --there are rent and bills to pay'
For some taxi drivers, this tattered economic situation appears to be taking its toll in the most devastating way. In 2018, eight taxi drivers committed suicide, including one yellow taxi lease-driver and three yellow taxi owner-drivers. Each of the men were known to have been sinking financially since the fall of the medallion and working constantly to pay their debts.
Mohammed lets out a slow, pained sigh. He says the most recent suicide occurred just last month, and it has left taxi drivers feeling shaken, helpless and increasingly frustrated.
It was in 2011 that the city's streets first started to change colour. Until then, Manhattan had always been monopolised by yellow taxis. They worked only in the busiest areas, resulting in the sea of yellow that's often depicted in films and on TV.
In 2011, the Bloomberg administration proposed the introduction of boro taxis--painted apple green--to serve less densely populated areas such as the Bronx, Brooklyn, Queens, Staten Island and upper Manhattan, where yellow taxis typically didn't go. The idea was that New Yorkers in all areas of the city could hail a taxi. Rules were put in place to prevent the green taxis from treading on the yellow taxis' toes. They cannot pick up street hails in Manhattan below 110th Street on the West Side or 96th Street on the East Side. They also cannot pick up from JFK International Airport or LaGuardia Airport unless pre-booked.
The first green taxis appeared on New York's streets in August 2013, following unsuccessful legal action by the yellow taxi industry, which feared the impact on the value of medallions. The green boro taxis were an early warning shot for New York's yellow cabs but it was still one contained and controlled by regulations and restrictions. While the public fight took place between the yellows and the greens, a far greater, less manageable threat to the taxiing world was bubbling almost unnoticed under the radar--Uber.
Uber launched in New York in 2011, further diluting the sea of yellow with a wave of shiny black cars. The appeal was instant. New Yorkers could get a ride with just a few taps of their smartphone. Uber cannot pick up street hails but, as most people have a smartphone nowadays, that's of little consequence. People can also get cheaper rides with Uber, as the cost of the fare can be shared with other passengers going the same way.
The success of Uber in New York has been explosive, with more than 65,000 Uber cars now in the city, outnumbering the 13,587 yellow medallion taxis four to one. In July 2017, Uber overtook the yellow taxis in terms of trips per day, averaging 289,000, while yellow taxis averaged 277,000 trips. Furthermore, Uber drivers can work anywhere in the city, including on the yellow medallion taxis' turf in Manhattan.
Drivers themselves have also flocked to Uber, tempted by the promise of flexible hours and more freedom. This has left a void in the number of drivers wanting to lease medallions from fleet owners. Mohammed says that the car parks storing these fleets have now become eerie yellow taxi graveyards'--rows upon rows of yellow cars, sitting idle and driverless.
Nor is Uber the only ride-hailing app stirring things up in New York. Lyft launched in the city in 2014, adding its signature pink moustache design to the colour chart. Of the 125,323 for-hire cars now on New York streets, some 100,000 of them are attributed to ride-hailing apps.
Back at the apartment where I'm staying in Harlem, I read more about the things Mohammed told me on my short trip from Brooklyn to Central Park North. The news reports are packed with phrases such as 'end of the road', 'no future' and 'thing of the past'. Could the yellow taxi really be on its last legs?
One glance at the New York Taxi Workers Alliance's (NYTWA) website tells me that, on the contrary, it's fighting back. The NYTWA staged more than 25 protests, strikes and speeches in 2018 alone. And the city is starting to listen.
In August, the city council introduced a year-long cap on the number of app-based taxis allowed on New York's streets, keeping numbers at their current level of about 100,000. And, in October, the Taxi and Limousine Commission, which controls the medallion system, agreed to put a hold on medallion renewal fees to give drivers some temporary debt relief. Medallion owners are usually charged between $450 and $1,650 every two years.
Now, the NYTWA is campaigning against the plan to introduce a surcharge on for-hire vehicles, known as congestion pricing. The surcharge will mean that every yellow taxi trip in Manhattan south of 96th Street will have $2.50 added to it. The funds raised will go towards repair work for the subway system. Bhairavi Desai, executive director of the NYTWA, says that yellow taxi drivers could lose as much as $15,000 a year in income if they are not exempted from congestion pricing.
THE MEDALLION LIVES ON
Despite the dark year that New York yellow taxi drivers have just endured, a glimmer of hope is rekindling. Graham Hodges, a taxi historian and former yellow taxi driver, tells me that some people are starting to put their faith back into the medallion system.
'Some of the drivers are beginning to buy medallions,' he tells me. 'I've talked to four or five of them who are doing this. They're buying them up at $160,000 to $200,000 as kind of speculation because they think they might go up. I think they're probably doing this by self-financing because banks aren't loaning money out on medallions anymore. This happened in the 1980s too--five or six guys would put their money together to buy a medallion, then drive it in shifts and share the profits.'
Hodges explains that a shared feeling among drivers --many of whom also work for Uber--is that Uber's economic model is not going to work well in the long-term. If the US economy hits a recession, many taxi drivers will move back from the gig economy to the relative security of the medallion. At least there you have a set rate, you know kind of what you can make, and the city is not going to take a new percentage out of you tonight as opposed to yesterday,' says Hodges. 'With Uber, they're really in charge of what the driver could potentially make.'
He also suggests that app-based taxi services are going to see more regulation in the future--something we're already seeing with the numbers cap and a plan to introduce minimum wages for app drivers. "This is going to put enormous economic pressure on the business model of the app-based companies because they operate on methods that have very little labour costs,' says Graham. 'If these companies have to start paying personal and government benefits, it's going to cut into their ability to be global and have enormous amounts of equity.'
If Graham and the other drivers betting on the yellow taxi industry are correct, then the medallion could well prosper, bringing back the sea of yellow that made New York's taxi industry so unique. Until then, it seems New Yorkers will have to get used to a new colour palette: yellow, green, pink and black.
by Estelle Hakner
WHY ARE NEW YORK TAXIS YELLOW?
Yellow became the official colour of New York's taxis in 1967 although the first yellow taxis appeared in 1912, when Albert Rockwell incorporated the Yellow Taxicab Company. Back then, it was customary for a taxi company to have a signature colour, and Rockwell's wife suggested yellow because it was her favourite. Rockwell took legal action to stop other taxi companies painting their taxis yellow, but he was unsuccessful. Then, in 1915, John D Hertz (of today's Hertz rental company) founded the Yellow Cab Company in Chicago. He chose the colour based on the results of a survey that he had commissioned with a local university, which found that yellow with a touch of red was the most visible colour from a distance. Ultimately it was Hertz that made the yellow taxi popular as his business was successful in New York.
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|Title Annotation:||New York Taxis|
|Comment:||End of the Ride? The yellow taxicab is one of New York's most timeless icons, but the industry is facing a crisis.|
|Date:||Mar 1, 2019|
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