company:lyft

  • The Quiet Death of the Gig Economy – FutureSin – Medium
    https://medium.com/futuresin/the-quiet-death-of-the-gig-economy-126f62014a4d

    Michael K. SpencerFollow Jan 7

    Disruption, blissfully happy digital nomads, the sharing economy and oh yes — the “Gig Economy” sounded good on paper, but it seems to not be all it was thought it might become.

    As the U.S. economy finally and painfully slowly recovered from the great recession of 2008, the supposed unemployment rate fell to record low levels in 2018.

    Alan Krueger (Princeton University) and Larry Katz (Harvard University) have dialed down their estimates of the gig economy’s growth by 60%-80%.

    According to Guy Berger on LinkedIn, Krueger and Katz published the (at the time) most rigorous analysis of alternative work arrangements. Their conclusion was that such arrangements (of which a minority are online platform gig work) had grown significantly between 2005 and 2015. Their estimate was its share of the US workforce had grown by a whopping 5 percentage points. (7–8 million workers.). Well guess what, that trend now seems to have reversed as the economy recovered.

    With Lyft and Uber set to go public with IPOs this year, that to be part-time drivers with them is somehow desirable or helpful to “make ends meet” has all but dried up, right before supposed autonomous vehicles and self-driving cars start to hit the streets in various ways.

    Indeed there does not seem to be much sharing and caring in the ruthless world of Uber, amid legal battles and drivers who make less than minimum wage and are like grunt contract workers of the worst kind, totally unprotected.

    In a world where Amazon is miserably harsh to its bottom feeder workers, why the heck did we once think the ‘gig economy’ was some glorious alternative workforce? Why the ‘gig’ economy may not be the workforce of the future after all, with rising minimum wages and a small bump in wage growth in 2019. I personally think the American labor force is screwed with a skill-shortage coming the likes of which we’ve rarely seen, but that’s another story for another day.

    From Uber to TaskRabbit to YourMechanic, so-called gig work — task-oriented work offered by online apps — has been promoted as providing the flexibility and independence that traditional jobs don’t offer. But in 2019, if anything they seem like scams for the destitute, desperate and debt-ridden. I feel a bit nervous about how manipulative an Uber driver can be just to earn an extra buck. Maybe it’s not a Gig economy but kind of like another form of slavery given a pretty name.

    Horror stories of what it’s really like to do delivery work also give you a second guess that this Gig Economy isn’t just disruptive to make these companies rich, it’s a sham and harmful to these workers. I feel as if Silicon Valley has duped us, yet again.

    Nobody could have thought or imagined that doing a small gig in exchange for an hourly payment could become someone’s full-time job. It’s a bit like career-death, you get used to the work-lifestyle perks of the so called flexibility until you realize just how little you made the year you side-hustled in the Gig Economy, or became a freelancer or attempted to be self-employed. It’s risky folks, and I don’t recommend it for a minute.

    When you need to bring food to the table you are on the fringe of the labor force, the painful predicament of being a Gig Economy minion is your everyday, until it becomes your new normal. Until you lose hope to up-skill or change your career path. Labor is tiresome, but when the fat cats get rich on the backs of people who need the money, you know American capitalism has invented another scam to profit. That’s precisely why the Gig Economy has to die.

    Crypto and the Gig Economy seem hot in a recession, but the reality is that lovely expansion of alternative work seems a nice response to the weak US labor market, when job seekers didn’t have many options. But now with the labor market in a much healthier state for a few more months, more conventional jobs have rebounded. The implication may be that we’ll see these kinds of jobs proliferate again during the next downturn. Bitcoin and side-hustles, it doesn’t feel very sustainable.

    The “gig” economy was supposed to be an opportunity for entrepreneurs to be their own boss. But if you have to deal with companies like Uber, you might end up getting screwed royally. For the hundreds of people who use services like Uber, TaskRabbit or Turo to earn their livelihood, there’s no thing as benefits, paid leave or basic worker rights. That’s not an ethical solution for people living on the edge.

    Companies like TaskRabbit make a fortune by extracting commission in exchange for connecting consumers across the country with reliable people in their neighborhood who will happily take care of their burdensome chores. But is it even ethical? The app-economy is a feudal use of technology and downright as evil as any capitalistic scheme you might want to devise to imprison people in impossible situations.

    The Gig Economy was a myth and a scam, and Silicon Valley needs to be held more accountable with regulation. Alan Krueger of Princeton University and Larry Katz of Harvard should actually be apologizing, not revising their estimates. As of 2020, universal basic income sounds more reliable than an exploitative Gig Economy.

    The gig economy was supposed to be the future of work, but it ended up hurting more than it helped, and we left it. Just as we should kill Uber.

    #USA économie #droits_sociaux #platform_capitalism

  • Revolt of the gig workers: How delivery rage reached a tipping point - SFChronicle.com
    https://www.sfchronicle.com/business/article/Revolt-of-the-gig-workers-How-delivery-rage-13605726.php

    Gig workers are fighting back.

    By their name, you might think independent contractors are a motley crew — geographically scattered, with erratic paychecks and tattered safety nets. They report to faceless software subroutines rather than human bosses. Most gig workers toil alone as they ferry passengers, deliver food and perform errands.

    But in recent weeks, some of these app-wielding workers have joined forces to effect changes by the multibillion-dollar companies and powerful algorithms that control their working conditions.

    Last week, Instacart shoppers wrung payment concessions from the grocery delivery company, which had been using customer tips to subsidize what it paid them. After outcries by workers on social media, in news reports and through online petitions, San Francisco’s Instacart said it had been “misguided.” It now adds tips on top of its base pay — as most customers and shoppers thought they should be — and will retroactively compensate workers who were stiffed on tips.

    New York this year became the first U.S. city to implement a minimum wage for Uber and Lyft, which now must pay drivers at least $17.22 an hour after expenses ($26.51 before expenses). Lyft, which sued over the requirement, last week gave in to driver pressure to implement it.

    For two years, drivers held rallies, released research, sent thousands of letters and calls to city officials, and gathered 16,000 petition signature among themselves. The Independent Drivers Guild, a union-affiliated group that represents New York ride-hail drivers and spearheaded the campaign, predicted per-driver pay boosts of up to $9,600 a year.

    That follows some other hard-fought worker crusades, such as when they persuaded Uber to finally add tipping to its app in 2017, a move triggered by several phenomena: a string of corporate scandals, the fact that rival Lyft had offered tipping from the get-go, and a class-action lawsuit seeking employment status for workers.

    “We’ll probably start to see more gig workers organizing as they realize that enough negative publicity for the companies can make something change,” said Alexandrea Ravenelle, an assistant sociology professor at New York’s Mercy College and author of “Hustle and Gig: Struggling and Surviving in the Sharing Economy.” “But companies will keep trying to push the envelope to pay workers as little as possible.”

    The current political climate, with tech giants such as Facebook and Google on hot seats over privacy, abuse of customer data and other issues, has helped the workers’ quests.

    “We’re at a moment of reckoning for tech companies,” said Alex Rosenblat, a technology ethnographer at New York’s Data & Society Research Institute and author of “Uberland: How Algorithms Are Rewriting the Rules of Work.” “There’s a techlash, a broader understanding that tech companies have to be held accountable as political institutions rather than neutral forces for good.”

    The climate also includes more consumer awareness of labor issues in the on-demand economy. “People are realizing that you don’t just jump in an Uber and don’t have to think about who’s driving you and what they make,” Ravenelle said. “There’s a lot more attention to gig workers’ plight.”

    Instacart customers were dismayed to discover that their tips were not going to workers on top of their pay as a reward for good service.

    Sage Wilson, a spokesman for Working Washington, a labor-backed group that helped with the Instacart shoppers’ campaign, said many more gig workers have emerged with stories of similar experiences on other apps.

    “Pay transparency really seems to be an issue across many of these platforms,” he said. “I almost wonder if it’s part of the reason why these companies are building black box algorithmic pay models in the first place (so) you might not even know right away if you got a pay cut until you start seeing the weekly totals trending down.”

    Cases in point: DoorDash and Amazon also rifle the tip jar to subsidize contractors’ base pay, as Instacart did. DoorDash defended this, saying its pay model “provides transparency, consistency, and predictability” and has increased both satisfaction and retention of its “Dashers.”

    But Kristen Anderson of Concord, a social worker who works part-time for DoorDash to help with student loans, said that was not her experience. Her pay dropped dramatically after DoorDash started appropriating tips in 2017, she said. “Originally it was worth my time and now it’s not,” she said. “It’s frustrating.”

    Debi LaBell of San Carlos, who does weekend work for Instacart on top of a full-time job, has organized with others online over the tips issue.

    “This has been a maddening, frustrating and, at times, incredibly disheartening experience,” said Debi LaBell of San Carlos, who does weekend work for Instacart on top of a full-time job. “When I first started doing Instacart, I loved getting in my car to head to my first shop. These past few months, it has taken everything that I have to get motivated enough to do my shift.”

    Before each shopping trip, she hand-wrote notes to all her customers explaining the tips issue. She and other shoppers congregated online both to vent and to organize.

    Her hope now is that Instacart will invite shoppers like her to hear their experiences and ideas.

    There’s poetic justice in the fact that the same internet that allows gig companies to create widely dispersed marketplaces provided gig workers space to find solidarity with one another.

    “It’s like the internet taketh and giveth,” said Eric Lloyd, an attorney at the law firm Seyfarth Shaw, which represents management, including some gig companies he wouldn’t name, in labor cases. “The internet gave rise to this whole new economy, giving businesses a way to build really innovative models, and it’s given workers new ways to advance their rights.”

    For California gig workers, even more changes are on the horizon in the wake of a ground-breaking California Supreme Court decision last April that redefined when to classify workers as employees versus independent contractors.

    Gig companies, labor leaders and lawmakers are holding meetings in Sacramento to thrash out legislative responses to the Dynamex decision. Options could range from more workers getting employment status to gig companies offering flexible benefits. Whatever happens, it’s sure to upend the status quo.

    Rather than piecemeal enforcement through litigation, arbitration and various government agencies such as unemployment agencies, it makes sense to come up with overall standards, Rosenblat said.

    “There’s a big need for comprehensive standards with an understanding of all the trade-offs,” she said. “We’re at a tipping point for change.”

    Carolyn Said is a San Francisco Chronicle staff writer. Email: csaid@sfchronicle.com Twitter: @csaid

    #USA #Kalifornien #Gig-Economy #Ausbeutung

  • Connecticut legislators to consider minimum pay for Uber and Lyft drivers - Connecticut Post
    https://www.ctpost.com/politics/article/Connecticut-legislators-to-consider-minimum-pay-13608071.php

    By Emilie Munson, February 11, 2019 - Prompted by growing numbers of frustrated Uber and Lyft drivers, lawmakers will hold a hearing on establishing minimum pay for app-based drivers.

    After three separate legislative proposals regarding pay for drivers flooded the Labor and Public Employees Committee, the committee will raise the concept of driver earnings as a bill, said state Rep. Robyn Porter, D-New Haven, who chairs the committee, on Friday night.

    A coalition of Uber and Lyft drivers from New Haven has been pressuring lawmakers to pass a pay standard, following New York City’s landmark minimum pay ordinance for app-based drivers approved in December. The legislation, which set an earnings floor of $17.22 an hour for the independent contractors, took effect on Feb. 1.

    Connecticut drivers have no minimum pay guarantees.

    Guillermo Estrella, who drives for Uber, worked about 60 hours per week last year and received $25,422.65 in gross pay. His pay stub doesn’t reflect how much Estrella paid for insurance, gas, oil changes and wear-and-tear on his car. Factor those expenses in, and the Branford resident said his yearly take-home earnings were about $18,000 last year.

    Estrella and other New Haven drivers have suggested bill language to cap the portion of riders’ fares that Uber and Lyft can take at 25 percent, with the remaining 75 percent heading to drivers’ pockets. The idea has already received pushback from Uber, which said it was unrealistic given their current pay structure.

    Connecticut legislators have suggested two other models for regulating driver pay. State Sen. Steve Cassano, D-Manchester, filed a bill to set a minimum pay rate per mile and per minute for drivers. His bill has not assigned numbers to those minimums yet.

    “What (drivers) were making when Uber started and got its name, they are not making that anymore,” said Cassano. “The company is taking advantage of the success of the company. I understand that to a point, but it shouldn’t be at the expense of the drivers.”

    State Rep. Peter Tercyak, D-New Britain, proposed legislation that says if drivers’ earnings do not amount to hourly minimum wage payments, Uber or Lyft should have to kick in the difference. Connecticut’s minimum wage is now $10.10, although Democrats are making a strong push this year to raise it.

    As lawmakers consider these proposals, they will confront issues raised by the growing “gig economy”: a clash between companies seeking thousands of flexible, independent contractors and a workforce that wants the benefits and rights of traditional, paid employment.

    Some Democrats at the Capitol support the changes that favor drivers.

    “I thought it was important to make sure our labor laws are keeping up with the changes we are seeing in this emerging gig economy, that we have sufficient safeguards to make sure that drivers are not being exploited,” said Sen. Matt Lesser, D-Middletown.

    But the proposals also raise broad, difficult questions like what protections does a large independent contractor workforce need? And how would constraining the business model of Uber and Lyft impact service availability around the state?

    Sen. Craig Miner, a Republican of Litchfield who sits on the Labor committee, wondered why Uber and Lyft drivers should have guaranteed pay, when other independent contractors do not. How would this impact the tax benefits realized by independent contractors, he asked.

    Uber and Lyft declined to provide data on how many drivers they have in the state, and the Connecticut Department of Motor Vehicles does not keep count. In Connecticut, 82 percent of Lyft drivers drive fewer than 20 hours per week, said Kaelan Richards, a Lyft spokesperson.

    Last week, Hearst Connecticut Media spoke to 20 Uber and Lyft drivers in New Haven who are demanding lawmakers protect their pay. All drove full-time for Uber or Lyft or both.

    An immigrant from Ecuador, Estrella, the Branford driver, struggles to pay for rent and groceries for his pregnant wife and seven-year-old son using his Uber wages.

    “A cup of coffee at the local Starbucks cost $3 or $4,” said Estrella. “How can a trip can cost $3 when you have to drive to them five minutes away and drop them off after seven or eight minutes?”

    In December, 50 Uber and Lyft drivers held a strike in New Haven demanding better pay. The New Haven drivers last week said they are planning more strikes soon.

    “Why is Uber lowering the rates and why do we have to say yes to keep working?” asked Carlos Gomez, a Guilford Uber driver, last week.

    The drivers believe Uber and Lyft are decreasing driver pay and taking a larger chunk of rider fares for company profits. Many New Haven drivers said pay per mile has been decreasing. They liked Sen. Cassano’s idea of setting minimum pay per mile and per minute.

    “The payment by mile, it went down by 10 cents,” said Rosanna Olan, a driver from West Haven. “Before it was more than one dollar and now when you have a big truck SUV, working long distance especially is not worth it anymore.”

    Uber and Lyft both declined to provide pay rates per mile and per minute for drivers. Drivers are not paid for time spent driving to pick up a passenger, nor for time spent idling waiting for a ride, although the companies’ model depends on having drivers ready to pick up passengers at any moment.

    Lyft said nationally drivers earn an average of $18.83 an hour, but did not provide Connecticut specific earnings.

    “Our goal has always been to empower drivers to get the most out of Lyft, and we look forward to continBy Emilie Munson Updated 4:49 pm EST, Monday, February 11, 2019uing to do so in Connecticut, and across the country," said Rich Power, public policy manager at Lyft.

    Uber discouraged lawmakers from considering the drivers’ proposal of capping the transportation companies’ cut of rider fares. Uber spokesman Harry Hartfield said the idea wouldn’t work because Uber no longer uses the “commission model” — that stopped about two years ago.

    “In order to make sure we can provide customers with an up-front price, driver fares are not tied to what the rider pays,” said Hartfield. “In fact, on many trips drivers actually make more money than the rider pays.”

    What the rider is pays to Uber is an estimated price, calculated before the ride starts, Hartfield explained, while the driver receives from Uber a fare that is calculated based on actual drive time and distance. Changing the model could make it hard to give customers up-front pricing and “lead to reduced price transparency,” Hartfield said. New York’s changes raised rates for riders.

    James Bhandary-Alexander, a New Haven Legal Assistance attorney who is working with the drivers, said Uber’s current pay model is “irrelevant to how drivers want to be paid for the work.”

    “The reason that drivers care is it seems fundamentally unfair that the rider is willing to pay or has paid $100 for the ride and the driver has only gotten $30 or $40 of that,” he said.

    Pursuing any of the three driver-pay proposals would bring Uber and Lyft lobbyists back to the Capitol, where they negotiated legislation spearheaded by Rep. Sean Scanlon, D-Guilford, from 2015 to 2017.

    Scanlon said the companies eventually favored the bill passed in 2017, which, after some compromise, required drivers have insurance, limited “surge pricing,” mandated background checks for drivers, imposed a 25 cent tax collected by the state and stated passengers must be picked up and delivered anywhere without discrimination.

    “One of my biggest regrets about that bill, which I think is really good for consumers in Connecticut, is that we didn’t do anything to try to help the driver,” said Scanlon, who briefly drove for Uber.
    By Emilie Munson Updated 4:49 pm EST, Monday, February 11, 2019
    emunson@hearstmediact.com; Twitter: @emiliemunson

    #USA #Uber #Connecticut #Mindestlohn #Klassenkampf

  • LibreTaxi - free and open source Uber/Lyft alternative.
    https://libretaxi.org

    Free and open source alternative to Uber/Lyft connecting passengers and drivers.
    LibreTaxi makes ridesharing affordable by getting rid of the third party between passengers and drivers. Negotiate the price before the ride is confirmed, pay cash upon arrival. 1-minute hiring for all drivers.

    GitHub - ro31337/libretaxi: LibreTaxi, free and open source Uber/Lyft alternative to connect passengers and drivers.
    https://github.com/ro31337/libretaxi
    https://avatars0.githubusercontent.com/u/1477672?s=400&v=4

    LibreTaxi, free and open source Uber/Lyft alternative to connect passengers and drivers. http://libretaxi.org

    LibreTaxi press coverage – Telegraph
    https://telegra.ph/LibreTaxi-press-coverage-07-14

    Roman PushkinJuly 14, 2017
    CBC Radio One - The man who wants to out-Uber Uber

    Text: http://www.cbc.ca/radio/spark/346-biometrics-audio-intelligence-and-more-1.3987746/the-man-who-wants-to-out-uber-uber-1.3987987

    Audio: http://www.cbc.ca/player/play/879770691848
    Bitcoinist - INTERVIEW WITH LIBRETAXI: THE ‘FREE ALTERNATIVE’ TO LYFT & UBER http://bitcoinist.com/interview-libretaxi-free-uber-lyft
    Hacker News (1200+ pts) - LibreTaxi – A free and open source alternative to Uber and Lyft https://news.ycombinator.com/item?id=13529213
    Shareable - Q&A: LibreTaxi’s Roman Pushkin on Why He Made a Free, Open-Source Alternative to Uber and Lyft http://www.shareable.net/blog/qa-libretaxis-roman-pushkin-on-why-he-made-a-free-open-source-alternative
    Seeker - A Free Uber-Like App Finds Rides for People in Rural Areas https://www.seeker.com/a-free-uber-like-app-finds-rides-for-people-in-rural-areas-2242594637.html
    Core Impulse (Columbia University’s entrepreneurship publication) - LibreTaxi: Uber for Rural, Disadvantaged Communities https://impulse.coreatcu.com/libretaxi-an-uber-for-rural-disadvantaged-communities-657269849d31
    El País (the most highly circulated daily newspaper in Spain) - /Spanish/ Libre Taxi, o cómo convertirse en chófer en dos minutos gracias a Telegram https://elpais.com/tecnologia/2017/02/02/actualidad/1486029308_574979.html
    hipertextual - /Spanish/ LibreTaxi, entre Telegram y la más absoluta locura https://hipertextual.com/2017/02/libretaxi
    Product Hunt - Open source alternative to Uber/Lyft for Telegram https://www.producthunt.com/posts/libretaxi
    Observer - Uber But for Places Where Uber Would Never Go http://observer.com/2017/02/libretaxi-uber-ridesharing
    TechCrunch - /mentioned along with few other projects/ https://techcrunch.com/2017/06/30/google-org-blackrock-and-others-commit-2-2-million-to-fast-forwards-nonp
    Boingboing - Libretaxi: a free, open, cash-only alternative to Uber, for the rest of the world http://boingboing.net/2017/03/23/platform-cooperativism.html
    Hightech.fm - /Russian/ LibreTaxi — революция в сфере пассажирских перевозок https://hightech.fm/2017/02/08/libre-taxi
    Hightech.fm - /Russian/ LibreTaxi — это коммуникационная услуга, а не сервис такси https://hightech.fm/2017/06/21/libretaxi
    Silver Rain Radio - /Russian/ - Заказать такси теперь можно через Telegram

    Text: http://www.silver.ru/programms/nanonovosti/editions-of-the-program/materials-ZakazattaksitepermozhnocherezTelegram

    Audio: http://www2.silver.ru/audio/FADWW
    NTV - LibreTaxi /Russian/ Video: https://www.youtube.com/watch?v=NY9_Rxck3YE

    #Taxi #open_source #Uber #Vermittlung

  • I Rode All the E-Scooters. Most of Them Are Awful Except Two
    https://jalopnik.com/i-rode-all-the-e-scooters-most-of-them-are-awful-excep-1835373127

    So sieht es im paradiesischen Wunderland des Transport-Sharing aus : #ASAB Alle Roller sind Mist, außer einem, und der ist genau genommen kein Roller. Und in Berlin? Sind das bessere E-Roller Made in Germany ? Wohl kaum. Tragt bloß einen Helm!

    Matt Farah, 6/10/19 3:45pm - One weekend morning toward the end of 2017, I woke up at home in Venice, CA and took a walk, only to see something entirely new: people on electric scooters. And I mean lots of people on electric scooters. Literally overnight, a new company called Bird, founded just two miles away in Santa Monica, had launched an app and dumped thousands of dockless scooters all over the place. A few things happened very quickly after that:

    Bird Scooters became litter. Freelance chargers, or “Juicers” as Lime would later call their not-employees, would do their best to place the scooters in an orderly fashion, out of the way in common areas. But since people only have respect for a.) things they, themselves personally own or b.) are locked down or are being watched, kicking, destroying, throwing them in the ocean, and more turned into Venice’s favorite new sport. The other morning, I watched someone line up a dozen or more scooters neatly, get into their van, and drive off. Not 10 seconds later, someone used a shopping cart as a bowling ball, turning the whole thing into some kind of bramble.
    Everyone wanted to compete with Bird. Lime was next, with its fun, fruit-themed livery. Bird and Lime were the new disruptors, and the OG disruptors, Uber and Lyft, wanted in on that sweet, sweet last-mile dollar. So those two started dropping their own scooters all over.
    E-Mobility Scooters have absolutely decimated the bike rental industry in Venice. Enterprising bike rental shop owners began to moonlight as scooter chargers or repair facilities. Some bike rental shop owners began buying and renting out their own scooters. Now, just 18 months later, on any given weekend, well over 50 percent of the wheeled traffic on the Venice bike path is battery powered.

    There were injuries. Lots of injuries. Anecdotally, I regularly see people wiping out and getting hurt on mobility scooters. It happens enough that I have made something of a pastime watching a specific corner on the bike path near my house. Business Insider reports over 1,500 injuries serious enough to record in the U.S., in 2018 alone, plus four fatalities.

    For the record, I sympathize with local residents who resent them taking up sidewalk space in front of their home, hate them for becoming litter in a neighborhood that often has too much of that already, and who have to deal with yet another way for dumb, lost tourists to be dumb and lost.

    I’ve found scooters blocking my own front door or garage on several occasions. And folks tend to want the best of all worlds while riding one: they want the rights of a pedestrian, the rights of a bicycle, and the rights of a car, all at the same time, which is an incredibly dangerous mindset.

    Also, for the record, I have found some extremely convenient uses for the scooters when I need to get somewhere that is just out of walking range, or to “run to the store to pick up some forgotten ingredient” while a recipe is in the oven. I have used every brand of scooter at one point or another, with extremely mixed results. I will factor in previous experience into my rankings.

    The Test: My goal was to find out which mobility company provides the best motoring experience for the rider, for their money. A showdown, for which scooter is best.

    For purposes of this piece, we will not be discussing company policy, only the scooter itself, and whether or not you should get down with it when you come hang out with me on Venice Beach.

    The Circuit

    Allow me to introduce you to The Mobiliring: a 3.4-mile handling circuit featuring a variety of surface changes, corners, crags, obstacles, sand, and people.

    You begin at the Venice Beach Parking lot at 2100 Ocean Front Walk, with the densest population of scooters around. Proceeding straight across the parking lot to the bike path, you go north on the bike path over a winding way made of slatted, rough, sandy concrete, all the way to the Santa Monica border, where you turn back south because mobility scooters can’t be ridden on the bike path at all in the city of Santa Monica.

    You ride south on Speedway, basically a decaying alley full of potholes, but appropriately named, as it was LA’s first paved road. Take Speedway south to Windward Avenue, the heart of Venice, and turn right, weaving across the freestyle dance skating grounds, through the throngs of tourists, and back to the bike path where it meets the legal graffiti area. Continue south on the bike path until you get to the Venice pier, then turn left on Washington Blvd and an immediate left to go north on Speedway, taking you right back to Start/Finish.

    This course is approximately 60 percent unlimited-speed bike path and 40 percent public roads, and in order to successfully complete a lap, you must pay attention and obey all posted road signs and laws.

    (Before you ask, Yes, I bought the Mobiliring domain name. Yes, I will be inviting you to post your own lap times.)

    The Contenders: We’ve restricted our entrants to scooter-type vehicles (as opposed to e-assist bicycles) available on the street for rent in Venice, CA as of May 13, 2019. For this test, that means Bird, Lime, Lyft, Jump (Uber), and Wheels are in the game. Now let’s see how they did on our handling course.

    5th Place – Jump – DNF

    Jump, along with Lyft, uses the Segway / Ninebot ES2 scooter with 19 miles of range and a claimed top speed of 15 mph. This scooter also uses two independent braking methods: regenerative via a toggle on the handlebar, and direct friction via a pressure plate on the rear tire. But, as with shared platforms in cars, the difference is often in the fine tuning, and here, the tuning mattered a lot.

    Our test started well. I picked up a fully charged and seemingly brand-new Jump scooter a few road blocks from the Mobiliring’s Start/Finish line. On the road, it seemed reasonably well made and stable, and reached the claimed top speed of 15 mph relatively drama-free. Then, just after starting off my official lap time, I hit the bike path, and it told me “no.”

    This is important. You see, the Venice bike path is exactly what it sounds like: a dedicated path for bikes, separate from cars and pedestrians. How each of these scooters deals with the bike path, as we will learn, is a defining factor in their Mobiliring time. The bike path and some of the surrounding pedestrian areas, a few of which are on-course, are “restricted” for some scooters, but not for others.

    While each scooter company deals with the bike path its own way, Jump has elected not to deal with it at all. The scooter refused to move, the app told me to take it back off the path, and into a “parking zone,” to lock it up and end my ride.

    I pushed it back where I found it, and even though my phone knew where I was, the scooter disagreed, and I was penalized for $5 for, ultimately, parking it legally.

    4th Place – Lime S – 44 minutes - $7.60

    Lime, the second scooter brand on the scene after Bird, has just released a heavier-duty version of their scooter, called the “Gen 3.” It features an underfloor battery for better stability, improved front suspension, bigger wheels, and a 30-mile range with all-weather capability.

    Unfortunately, since California doesn’t need that as badly as, say, Boston, we don’t get those. Here in Venice, we get the original Lime S scooter, also by Ninebot, but with a 18 mile range and a top speed of 14 mph. The Lime S has the tallest handlebars of all scooters and a single, rear-wheel bike-style cable and disc brake.

    In my previous experience, I’ve found the Lime S to be the fastest of the stand-up scooters, regularly exceeding the claimed 14 mph number, but also with the twitchiest handling in part because those handlebars are so high up and with a column full of heavy batteries in the front. Allegedly the handling issues are solved in the new scooter, but I will have to wait to see on that.

    Lime has decided that an appropriate speed for the Venice bike path should be 3 mph. Now, I don’t know if you’ve ever tried to operate a two-wheeled vehicle at 3 mph, but it’s actually quite a lot of work. Three is just barely enough speed to keep a two-wheeled vehicle standing up. It’s slow enough that I was passed by old people walking.

    It’s so slow, that you really can’t keep it in a straight line, which means the ride takes that much longer because you have to cover more zig-zaggy distance, and have I mentioned you’re going three? 

    I was openly mocked, to my face. I realize how mean-spirited you need to be to mock someone to their face for doing nothing besides silently riding a scooter very slowly on the bike path, but honestly, no one has just randomly mocked me on the street really ever in my lifetime. That’s how embarrassingly slow Lime wants you to go on the bike path.

    To make matters worse, Lime’s GPS calibration is so bad that, not 20 feet away from me on the pedestrian foot path I was passed by a dozen Limes going full-tilt, weaving between pedestrians, while I was a rolling chicane on the bike path, being passed by folks going slower than my own top speed.

    3rd Place – Lyft – 31 minutes, 47 Seconds - $7.01

    As I noted earlier, both Lyft and Jump use essentially the same Ninebot ES2scooter, painted different colors. But the difference between Jump’s DNF and Lyft’s podium finish? The software.

    Jump uses a basic LED display with a speedometer, whereas Lyft just has five little lights to indicate battery status. You could say that makes Jump better, but in fact it makes Jump worse, because there is nothing worse than looking at a powered vehicle’s speedometer and seeing a number lower than where you’d set the treadmill during cool down.

    Lyft’s “Prince Purple” and black livery also features a metal cage surrounding the column-mounted auxiliary battery pack, Mad Max style. I guess they follow @BirdGraveyard.

    I actually tested the Lyft before Lime and Jump, so when I hit the bike path and got stuck with a 5 mph limiter for the first mile and a half, it was bad. I thought that was, at the time, as embarrassed as I could be on a motorized vehicle, traveling barely faster than a walk. The thumb throttle, remained fully depressed for a solid 20 minutes, and my right hand began to cramp. I suddenly realized that, if the other scooters were this bad (they were worse) the test was actually going to take all day (it did).

    In unrestricted zones, the electrons flowed like a burst dam; the combination of power delivery and incredibly cheap, low-grip tires mean that you can actually get wheelspin on the sandy stuff – man this thing is fast. Maybe Lyft doesn’t put a speedometer on the handlebars because they are hiding the fact that their scooters are massively juiced up? Maybe it’s like Japan in the 1990s where everyone says their car makes 276 horsepower, and this is the R34 Skyline actually pushing 450?

    Southbound on Speedway, there were sections where I couldn’t use full throttle because it was just way, way too fast. With these tiny wheels, and this amount of power, when you hit the pavement head first (your only option when the front wheel “pivot point” of a crash is 4” in front of your toes), your head will explode like a Gallagher watermelon.

    The regenerative braking system on these Ninebot scooters is really cool, except, like most cheap regen systems, it stops working at low speed. So you really do have to use the friction brake on the rear wheel to come to a full stop.

    Considering the speed, you do not want to be standing on your toes on your back foot, which means you have to do a mid-brake foot shuffle to get that back foot planted on the brake to stop it. It seems like a good idea, and probably adds to the range to use regen as much as possible, but in a panic, complex braking systems are not good.

    Nevertheless, the bike path clearly took a lot away from Lyft’s time here, and so if you live in a city without restricted zones, commuting on one of these could be faster than you think. Wear a helmet.

    2nd Place – Bird Zero – 20 minutes - $6.20

    Bird is the Kleenex of mobility, the Google of mobility, the iPod of mobility. They were the first on the scene and made everyone else play catch-up. The original Bird scooter was a modified Xiaomi unit (sidebar: the guy who modified it is super interesting on his own and races a very fast and aero-fied Nissan GT-R in the Global Time Attack series), which proved not to be durable enough to stand up to the abuse put forth by Americans handling items they don’t own. So they first did a stint with Ninebot before developing their own in-house scooter, the Bird Zero, which is what I rode.

    The Zero has the widest deck of any standup scooter available, making it the most comfortable and stable to ride. (EDIT: New “Bolt” Scooters in LA have wider decks, but were not online at the time of my test). The handlebars fall between Jump and Lime height, so right in the middle, and between your hands is a speedometer and battery indicator.

    Though Bird says the Zero will go 25 km/hr (15 mph), the onboard speedometer would stop at 11.5 mph, and if you actually hit 12 mph (like on a small downhill), it would kill power until you dropped down to 9 mph, an incredibly annoying bug.

    It has larger wheels than the Ninebots used by Lyft, Jump and Lime, and what appear to be grippier tires. At 11 mph and change, you feel like you’re moving along pretty good, but it’s not sketchy fast, and the combination of (slightly) larger wheels and a basic front suspension mean the cracks in the sidewalk aren’t so jarring. The only brake is a bicycle-style cable disc brake on the rear wheel. The cable is exposed, so it’s vulnerable to tampering, but it’s intuitive and effective.

    (Side note: Yes, people are constantly messing with the brakes of these scooters. I regularly find cut cables, and on a few occasions, have started riding only to find out while in motion that the cables have been cut or removed entirely. Check any scooter before riding for functional brakes.)

    I took my first lap ever around the Mobiliring on a Bird, figuring they would be the one to beat, and frankly, Bird is the gold standard for a reason. The Zero is unrestricted on the bike path, and maintained its top speed for the entire first twisty section. The handling is predictable, and there is more grip than other scooters, right up until it gets sandy. Turning southward on Speedway at the north end of the course, the Zero absorbed many of the bumps and ruts in the road better than other scooters. Because I didn’t bump up on any stupid limiters, the entire lap was quite pleasant and relaxing.

    Having tried all three generations of Bird scooter, the Zero is a vast improvement from the first two, and if you’re going to scoot on your feet, not on a seat, Bird is probably the one to ride.

    1st Place – Wheels – 15 Minutes, 16 seconds - $5.60

    “Wheels” is the newest mobility company on the scene; their miniature bicycles only appeared in Venice a few months ago. These bikes are, frankly, genius. In theory, they go up to 35 km/hr, (21.7 mph), though I never saw more than 33.5 on the display.

    Because they are the first mobility option with hot-swappable batteries, the bikes themselves never go out of service during daytime hours. Wheels “Transporters” pick random bikes from where they are left, swap the batteries, and return the bikes to “hubs,” where, in my experience, you can pretty much always find at least one.

    The fact that they are more like bicycles than Razor scooters is, itself, a major advantage. Sitting, rather than standing, means stability. It means your knees and ankles aren’t a suspension component. It has 14-inch wheels with pneumatic tires. It uses dual disc brakes from a high-end bicycle. It has a twist-grip throttle, like a motorcycle. And it has Bluetooth speakers, so you can play your music from the bike itself, freeing you from having to dangerously (and in Santa Monica, illegally) ride on the street wearing headphones.

    A Wheels has enough power that you don’t have to push-start it, real tires so you can ride confidently on sandy tarmac, and the kind of brakes you’d want on a vehicle capable of keeping up with, and passing, folks on geared bicycles, or even cars in urban traffic. The kind of bumps that would sail you headfirst into a parked car on a traditional scooter are mere inconveniences on a Wheels.

    I knew it would be faster than the scooters on specs alone, but honestly, it was also so much more fun. Every single scooter is kinda terrifying, because a crack or a bump can come up so quickly, with really bad consequences. Even while having fun, it’s virtually impossible to escape this train of thought. Especially since right when you do, that’s when you crash.

    A Wheels is like riding an electric Honda Grom. The bike path, unrestricted on a Wheels, might as well be Angeles Crest Highway. I was taking apexes, leaning it down, balancing the brakes, and leaning into the throttle on exits. You can actually look up and around, rather than four feet in front of you, because you aren’t terrified of uneven pavement anymore.

    Best of all, because it looks more like a bike than a Razor scooter, many folks are riding them in more appropriate places than sidewalks, because they no longer see themselves as pedestrians.

    And the speed, Lord, the speed. It completed the Mobiliring a full five minutes faster than Bird, in half the time of Lyft, 1/3 the time of Lime, and for less money than all of them—after all, you’re literally renting these things by the minute, not the mile. Time is money.

    Downsides? Admittedly, there are two: First are the exposed brake cables for the dual disc brakes. During the single day of this test, I found three Wheels with intentionally cut brake lines. Someone not as vigilant as myself might not notice, which, considering where they were cut, I believe was the sadistic intent.

    Secondly, 20 mph is fast enough to have a crash where you can get hurt pretty badly, and Wheels is getting awfully close to moped territory; those do require helmets. While you’re no longer worried about pavement quality, you are going fast enough to misjudge things and just, crash. I hate to say it, but helmets should probably be mandated. And if I’m nit-picking, a height-adjustable seat would be nice, although not having to pedal negates most of the negative effects of a fixed seat.

    When scooters first arrived in Venice, I rolled my eyes and said to myself, “Great, at last a substitute for walking.” And in some ways, I was right. These scooters do expose us at our most slovenly, both in how we treat them when no one is looking, and in how tourists do actually use them, right in front of me, every day: as a walk you don’t have to walk; as a bike you don’t have to pedal.

    But they also do give mobility to people who don’t otherwise have it. 30 miles in LA is a pretty long way; you could ride a Wheels from Venice to Beverly Hills and back, for less than an Uber or Lyft, and without having to be a sweaty mess when you got there. Bird scooters and their ilk are good for short trips that are just out of walking distance, as long as you don’t have to deal with restricted zones and the surface is good.

    A Wheels is good for that too, but it can also be a bicycle. And frankly, it’s safer. Wheels wins this one by a mile.

    But as I write this, some three more e-scooters are coming to Venice in the next month. I guess the Mobiliring’s work isn’t done yet.❞

    #USA #Elektroroller #Verkehr

  • Facebook’s Libra: Three things we don’t know about the digital currency - MIT Technology Review
    https://www.technologyreview.com/s/613801/facebooks-libra-three-things-we-dont-know-about-the-digital-curren

    If it’s not the most high-profile cryptocurrency-related event ever, Facebook’s launch of a test network for its new digital currency, called Libra coin, has been the most hyped. It is also polarizing among cryptocurrency enthusiasts. Some think it’s good for the crypto industry; others dislike the fact that a big tech company appears to be co-opting a technology that was supposed to help people avoid big tech companies. Still others say it’s not even a real cryptocurrency.

    Libra’s network won’t work that way. Instead, running a “validator node” requires permission. To begin with, Facebook has signed up dozens of firms—including Mastercard, Visa, PayPal, Uber, Lyft, Vodafone, Spotify, eBay, and popular Argentine e-commerce company MercadoLibre—to participate in the network that will validate transactions. Each of these “founding members” has invested around $10 million in the project.

    That obviously runs counter to the pro-decentralization ideology popular among cryptocurrency enthusiasts.

    Today’s public blockchains use too much energy and process transactions too slowly to elicit mainstream demand. This is probably the biggest obstacle to adoption of cryptocurrencies. It’s why Facebook chose not to use proof of work, the process that Bitcoin uses to reach agreement among the blockchain network’s nodes, citing its “poor performance and high energy (and environmental) costs.”

    If the high-powered roster of financial firms and technology companies beat Ethereum to the punch on proof of stake, it would be ironic: public blockchains are supposed to disrupt Big Tech, not the other way around.

    On top of all that, how serious is Facebook is about achieving decentralization and becoming a “real” cryptocurrency? Perhaps the fact it has made a big song and dance about being decentralized is simply a way of offsetting the firm’s appalling record on data privacy. But will users demand that the currency be more decentralized—or will many simply not care?

    #Crypto_monnaie #Monnaie_numérique #Libra #Facebook

  • Passengers May Pay a Lot More. Drivers Won’t Accept Much Less. - The New York Times
    https://www.nytimes.com/2019/05/31/business/passengers-drivers-pay-uber-lyft.html

    Ce que l’économie classique peut nous dire de l’avenir de Uber et Lyft...

    Uber and Lyft, the two leading ride-share companies, have lost a great deal of money and don’t project a profit any time soon.

    Yet they are both trading on public markets with a combined worth of more than $80 billion. Investors presumably expect that these companies will some day find a path to profitability, which leaves us with a fundamental question: Will that extra money come mainly from higher prices paid by consumers or from lower wages paid to drivers?

    Old-fashioned economics provides an answer: Passengers, not drivers, are likely to be the main source of financial improvement, at least within the next few years, mainly because of something called “relative price sensitivity.”

    This conclusion may seem to run counter to popular wisdom. Wall Street analysts have suggested that Uber and Lyft will need to squeeze their drivers. Those workers are quite concerned about the possibility. Thousands went on a one-day strike before Uber’s initial public offering in May to demand higher pay and more benefits.

    #Uber #Economie #Economie_comportementale

  • Betrogene Kutscher in New York - Artikelsammlung


    2014 koste eine Taxikonzession in New York mehr als eine Million Dollar

    Wie Kredite New York’s Taxifahrer ruinierten
    https://seenthis.net/messages/784212

    Taxi loan abuses part of a broader pattern in New York | American Banker
    https://seenthis.net/messages/784207

    How New York could respond to the taxi medallion lending crisis | CSNY
    https://seenthis.net/messages/784206

    How We Investigated the New York Taxi Medallion Bubble - The New York Times
    https://seenthis.net/messages/784205

    Opinion | How New York Taxi Drivers Got Mired in Debt - The New York Times
    https://seenthis.net/messages/784204

    Taxi Industry Leaders Got Rich. Drivers Paid the Price. - The New York Times
    https://seenthis.net/messages/784203

    De Blasio calls for probe of taxi lenders
    https://seenthis.net/messages/784200

    Inquiries Into Reckless Loans to Taxi Drivers Ordered by State Attorney General and Mayor - The New York Times
    https://seenthis.net/messages/784199

    Bad loans were killing the taxi industry long before Uber and Lyft: report
    https://seenthis.net/messages/784197

    As Thousands of Taxi Drivers Were Trapped in Loans, Top Officials Counted the Money - The New York Times
    https://seenthis.net/messages/784196

    ‘They Were Conned’: How Reckless Loans Devastated a Generation of Taxi Drivers - The New York Times
    https://seenthis.net/messages/784193

    Und zum Abschluß etwas Lustigeres aus New York:

    NYCTAXINEWS/CURRENT NEWS
    https://seenthis.net/messages/784190

    #USA #New_York #Taxi #Betrug #Ausbeutung

  • Taxi loan abuses part of a broader pattern in New York | American Banker
    https://www.americanbanker.com/opinion/taxi-loan-abuses-part-of-a-broader-pattern-in-new-york

    An investigation by The New York Times earlier this week suggested that the massive collapse in New York City taxi medallion prices since 2014 was not primarily the result of new competition from Uber and Lyft. Instead it was the inevitable outcome of unsustainable lending practices.

    Low-paid cab drivers who dreamed of becoming their own bosses took out loans that required them to pay $1 million or more. The payments often covered only the interest that borrowers owed, and interest rates spiked if the loans were not repaid within a few years. From the lenders’ standpoint, the loans only made sense as long as medallion prices continued to rise.

    Cabbies, many of them immigrants, suffered harsh consequences after taking out loans with terms they did not fully understand.

    Cab drivers who dreamed of becoming their own bosses took out loans that required them to pay $1 million or more.

    Since the articles were published, various politicians have floated potential responses that are narrowly targeted at taxi medallion lending.

    New York City Mayor Bill de Blasio ordered a probe of taxi loan brokers. Other local officials suggested that the city should buy onerous loans at discounted prices and then forgive much of the debt.

    Sen. Charles Schumer, D-N.Y., asked the National Credit Union Administration to conduct a review of supervisory practices at institutions that engage in taxi medallion lending.

    But taxi drivers are not the only businesspeople who regularly get deceived by unscrupulous lenders. So do contractors, restaurateurs and the owners of various other kinds of struggling small businesses. Many high-cost business lenders are based in New York, where unusually favorable laws provide a haven to these companies.

    Some aspects of the New York City taxi loan market were unique. For example, local officials had a vested interest in keep medallion prices high, since the city was generating revenue from the proceeds of sales. Indeed, the Times showed that government officials enabled lending that has put many borrowers in dire straits.

    “The City of New York, more or less, is our partner,” Andrew Murstein, president of Medallion Financial, said in a 2011 interview.

    But in other ways, the loans to cab drivers resembled deceptively marketed loans that have ensnared a wide variety of cash-strapped small-business owners.

    Because the New York City taxi loans were classified as business loans, rather than consumer loans, they did not have to include standard disclosures regarding interest rates. They often included large fees and terms that unsophisticated borrowers did not understand.

    And according to the Times, some taxi medallion lenders used a tool that under New York law offers a uniquely powerful way to collect on business debt. Lenders in the Empire State can require applicants for small-business loans to sign a document called a confession of judgment, which prevents them from contesting any subsequent allegation that they have fallen behind on their payments.

    A Bloomberg News investigation last year found that merchant cash advance companies, which offer high-cost financing to small businesses across the country, have at times abused New York’s court system by forging documents and lying about how much money they are owed in order to obtain speedy judgments that cannot be contested by the borrower.

    Small businesses that use merchant cash advances are required to make daily payments based on a percentage of their daily revenue. The merchant cash advance firms avoid complying with New York’s strict usury rules by classifying their financing not as a loan, but rather as a purchase of the company’s future credit card receipts.

    The Bloomberg articles also chronicled the role of New York City marshals — mayoral appointees who enforce the court judgments, get a cut of the proceeds, and have been accused in some cases of improperly seeking to collect money outside of the city.

    As evidence of business lending abuses in New York has mounted, little change has occurred at the state level, though there does appear to be a growing appetite for reform.

    Last year, the New York State Department of Financial Services argued in a report that borrower protection laws and regulations should apply equally to all consumer lending and small-business lending activities.

    The Bloomberg investigation reportedly sparked probes by the New York attorney general’s office and the Manhattan district attorney’s office. On Thursday, Bloomberg reported that the Federal Trade Commission has also opened an investigation of potentially unfair or deceptive practices in the merchant cash advance industry.

    The loan practices that hurt taxi drivers are part of a broader pattern in New York, which has become the nation’s capital for predatory business lending. It remains to be seen whether state lawmakers and regulators will connect the dots.

    Bankshot is American Banker’s column for real-time analysis of today’s news.

    #USA #New_York #Taxi #Betrug #Ausbeutung

  • How New York could respond to the taxi medallion lending crisis | CSNY
    https://www.cityandstateny.com/articles/policy/infrastructure/how-new-york-could-respond-to-taxi-medallion-lending-crisis.html

    Experts and lawmakers weigh in on easing the pain of burdened medallion owners and preventing predatory lending in the future.
    By ANNIE MCDONOUGH
    MAY 22, 2019

    After a two-part New York Times investigation into predatory lending practices for taxi medallions delineated how industry leaders and government agencies participated in, encouraged or ignored risky lending, calls for action sprang forth – sometimes from the very same officials or agencies that had been asleep at the switch.

    Various deceptive or exploitative lending practices contributed to the rise and precipitous fall of taxi medallions in New York City. Medallions worth $200,000 in 2002 rose to more than $1 million in 2014, before crashing to less than $200,000. The bubble was inflated by loans made without down payments, requirements that loans had to be paid back in three years or extended with inflated interest rates, and interest-only loans that required borrowers to forfeit legal rights and give up much of their income. Borrowers – typically low-income, immigrant drivers – were left in the lurch when the bubble burst, an event that the taxi industry has long blamed primarily on the rise of app-based ride hail services like Uber and Lyft. While the rise of app-based ride hail did contribute to the now-ailing taxi industry, the revelations in the Times show government officials – including the Taxi and Limousine Commission which acted as a “cheerleader” for medallion sales – ignored the warning signs.

    Since Sunday, when the first Times story was published, New York Attorney General Letitia James has announced an inquiry into the business and lending practices that “may have created” the crisis, New York City Mayor Bill de Blasio announced a joint probe by the TLC, Department of Finance and Department of Consumer Affairs into the brokers who helped arrange the loans, Sen. Chuck Schumer called for an investigation into the credit unions involved in the lending, and members of the New York City Council and state Legislature, and New York City Comptroller Scott Stringer, have called for hearings and legislation to resolve the issue.

    The various proposals raised thus far are unlikely to fully address the damage caused to many medallion owners, some experts say. The Times investigation found that since 2016, more than 950 taxi drivers have filed for bankruptcy, with thousands more still suffering under the crippling loans. This is combined with a string of taxi and other professional drivers who have committed suicide in the past year and a half.

    Some of the solutions offered have focused on preventing the kind of reckless lending practices exhibited for taxi medallions. Stringer called on state lawmakers to close a loophole that allows lenders to classify their loans as business deals – as opposed to consumer loans, which have more protections for borrowers. A bill introduced last week by state Sen. Jessica Ramos would also establish a program to assist medallion owners who are unable to obtain financing, refinancing or restructuring of an existing loan through a loan loss reserve. State Sen. James Sanders and Assemblyman Kenneth Zebrowski, who chair the state Legislature’s committees on banks, declined to comment.

    But classifying loans for medallions as consumer loans might not be appropriate, said Bruce Schaller, a transportation expert and former deputy commissioner at the New York City Department of Transportation. “I think the difficult question with the individual drivers is that they are in business, they are planning to make money off of their increase in medallion prices. Should they have the same protections as someone who is taking out a mortgage on a house, who is presumed to be very vulnerable?” he asked. “That may well be the case, but (drivers) are also in a business in a way that the prospective homeowner isn’t.”

    The TLC told the Times that it is the responsibility of bank examiners to control lending practices, while the state Department of Financial Services said that it supervised some of the banks involved, but often deferred to federal inspectors. “The TLC is gravely concerned that unsound lending practices have hurt taxi drivers and has raised these concerns publicly,” Acting Commissioner Bill Heinzen said in an emailed statement. “Banks and credit unions are regulated by federal agencies that have substantial oversight powers that the TLC does not have. The TLC has taken steps within our regulatory power to help owners and drivers by easing regulatory burdens and working with City Council to limit the number of for-hire vehicles on the road. We have pushed banks to restructure loan balances and payment amounts to reflect actual trip revenue.”

    Seth Stein, a spokesman for de Blasio, also mentioned interest in preventing risky lending practices. “We are deeply concerned about predatory lending in the medallion business,” Stein wrote in an email. “While TLC has no direct regulatory oversight over lenders – that is squarely under the purview of federal regulators – we continue to look for every means of helping owners and drivers make ends meet. We’ve discontinued medallion sales, secured a cap on app-based for-hire-vehicles, and we strongly urge federal regulators to do more as well.”

    But remedies at the federal level may not be realistic, according to David King, a professor of urban planning at Arizona State University, with a speciality in transportation and land use planning. “There doesn’t seem to be any appetite for what would be reasonable lending standards. Reasonable standards that would include verifiable collateral or values that were based on something other than made-up dollar amounts,” King said, adding that he doesn’t see those changes being made under the current administration. “The housing bubble of 11 years ago, I think that was a sufficiently national concern that has inspired some movement from Washington. Whereas I think something like an asset bubble in New York, just like an asset bubble in one region, isn’t going to be enough to spur federal legislation.”

    Schaller said that while lending regulation fixes could be beneficial for preventing this kind of crisis in other industries, there’s action that can be taken now by the city to alleviate some pain. “The real question is, if the city now decides that they were part of the fraud, then they should refund the money,” he said. “It’s one thing to close a loophole, it’s another thing to decide that you need to make restitution.”

    City Councilman Mark Levine, who has been working on legislation along those lines for nearly a year, agreed that the city needs to take responsibility. “There has been a lot of attention to the whole industry of lenders and brokers who push these loans on the drivers in ways that were not transparent and really deceived them, and may very well constitute some sort of legal fraud,” he said. “But the city itself also bears responsibility for this, because we were selling medallions with the goal of bringing in revenue to the city and we were promoting them and pumping them up in ways that I think masks the true risks that drivers were taking on. And, most egregiously, we had a round of sales in 2014 when it was abundantly clear that we were headed for a price drop, because by that point app-based competitors had emerged and there were other challenges.”

    Levine’s vision for immediately helping those drivers still suffering under unsustainable loans would involve the city acquiring the loans from lenders who either cannot or will not be flexible with borrowers, and then forgiving the debts. Though the bill hasn’t been introduced yet, the idea is to partially finance the buy-back by placing a surcharge on app-based ride-hail companies like Uber and Lyft. Levine’s office is still working on confirming that the City Council would have the authority to levy that kind of surcharge. If it doesn’t, they would encourage that action be taken in Albany.

    But, as the Times’ investigation into the issue has revealed, much of the damage to drivers and medallion owners has already been done – including to the hundreds of medallion owners who have declared bankruptcy. “If someone paid $800,000 for a medallion loan and paid part of that off, and has had their house repossessed, now Mark Levine is saying, ‘well, we’ll just refund whatever’s left dangling out there,’” Schaller said. “If I were on the losing end of that bargain, I’d say I want my $800,000 back.”

    The idea of a buy-back, Levine admitted, is not a perfect solution, but it’s one he said can help the thousands of medallion owners stuck right now. “It would not address that kind of horrible, horrible hardship,” he said, referring to those owners who have forfeited assets and sustained other losses.

    If there’s any upside to the stories relayed in the Times about medallion owners financially devastated by bad loans and the failing taxi industry, it may be that it’s a call to action – even if it’s coming too late for some. “It’s had a dramatic impact on the interest in the Council about finding solutions,” Levine said of the heavy punch packed by the Times’ investigation. “It gives new impetus to this effort, which is good, because it’s complicated, and it’s going to require a political push to make it happen. The revelations in this article made that more likely.”

    Annie McDonough is a tech and policy reporter at City & State.

    #USA #New_York #Taxi #Betrug #Ausbeutung

  • How We Investigated the New York Taxi Medallion Bubble - The New York Times
    https://www.nytimes.com/2019/05/22/reader-center/taxi-medallion-investigation.html

    It took a year, 450 interviews and a database built from scratch to answer a simple question: Why had anyone ever agreed to pay $1 million for the right to drive a yellow cab?

    By Brian M. Rosenthal
    May 22, 2019

    Times Insider explains who we are and what we do, and delivers behind-the-scenes insights into how our journalism comes together.

    The story started, like a lot of stories seem to, with President Trump’s former lawyer, Michael D. Cohen.

    On April 9, 2018, the F.B.I. raided Mr. Cohen’s office, thrusting him into the national spotlight. The next day, the top editors at The New York Times asked five reporters to start working on a profile. I was one of them.

    The other reporters researched Mr. Cohen’s family, his legal career, his real estate interests and, of course, his work for the president. I took on the last piece of his business empire: his ownership of 30 New York taxi medallions, the coveted permits needed to own a yellow cab.

    After a few weeks of reporting, the team learned enough to publish our story on Mr. Cohen. And I discovered enough to know what I wanted to investigate next.

    At that time, the taxi industry was becoming a big story. Mr. Cohen had owned his medallions as an investment, counting on them rising in value because of the city’s decision to issue only about 13,000 permits. But thousands of the medallions were owned by drivers themselves, and two driver-owners had just died by suicide. Public officials were talking about how the price of a medallion had plummeted from over $1 million to under $150,000. Most were blaming ride-hailing companies such as Uber and Lyft.

    I had a different question: Why had anybody ever paid $1 million for the right to the grueling job of being a cabby?

    When I pursue an investigation, I identify the single most important question that I am trying to answer, and orient all of my reporting around it. (For example, why did it cost more to build subway track in New York than anywhere else in the world? Or why did Texas have the lowest special education rate in the country?) In this case, I ended up interviewing about 450 people, and I asked almost all the same question: Why did the price reach $1 million? It became my North Star.

    I heard plenty of theories, but I began to get somewhere only when I had an epiphany: No driver-owner had ever really paid close to $1 million for a medallion. On paper, thousands of low-income immigrants had. But while they had poured their life savings into their purchase, virtually all had signed loans for most of the cost — and never really had a chance to repay.

    I needed to examine as many loans as possible, to see if they were as unusual and reckless — and predatory — as some of my sources said they were. But how?

    I got a lead from an unexpected source: the lenders themselves.

    After prices had started crashing, the lenders in the industry had tried to squeeze money out of borrowers. Many of them had filed lawsuits against borrowers — lawsuits which had to include copies of the loans.

    I ultimately reviewed 500 of these loans, and I saw disturbing patterns: Almost none of them included a large down payment. Almost all of them required the borrower to repay everything within three years, which was impossible. There were a lot of interest-only loans, and a wide variety of fees, including charges for paying loans off too early. Many of the loans required borrowers to sign away their legal rights.

    Armed with the loan documents, I started calling dozens of current and former industry bankers, brokers, lawyers and investors. Some pointed me to disclosures that lenders had filed with the government, which were enormously helpful. Others shared internal records, which were even better.

    New York City did not have reliable digital data on medallion sales, so I used paper records to build a database of all the 10,888 sales between 1995 and 2018. The city taxi commission had never analyzed the financial records submitted by medallion buyers, so I did. Nobody knew how many medallion owners had gone bankrupt because of the crisis, so I convinced my boss to pay a technology company, Epiq, to create a program that sped through court records and spat out a tentative list — and then two news assistants helped me verify every result.

    As I dug into the data and the documents, I sought out driver-owners. I wanted to understand what they had been through. To find them, I went to Kennedy International Airport.

    The fare from taking someone from the airport into Manhattan can make a cabby’s day, and so drivers wait in line for hours. And over several visits during a couple of months, I waited with them, striking up conversations outside a food stand run by a Greek family and next to pay phones that had stopped working years ago. After talking briefly, I asked if I could visit their homes and meet their friends.

    In all, I met 200 taxi drivers, including several I interviewed through translators because they did not speak English fluently. (Some of those men still had signed loans of up to $1 million.) One by one, they told me how they had come to New York seeking the American dream, worked hard and gotten trapped in loans they did not understand, which often made them give up almost all of their monthly income. Several said that after the medallion bubble burst, wiping out their savings and their futures, they had contemplated suicide. One said he had already attempted it.

    The day after we began publishing our findings, city officials announced they were exploring ways to help these driver-owners, and the mayor and state attorney general said they were going to investigate the people who channeled them into the loans.

    In the end, the three front-page stories that we published this week about the taxi industry barely mentioned Mr. Cohen at all.

    But they did something much more important: They told the stories of Mohammed Hoque, of Jean Demosthenes and of Wael Ghobrayal.

    Brian M. Rosenthal is an investigative reporter on the Metro Desk. Previously, he covered state government for the Houston Chronicle and for The Seattle Times. @brianmrosenthal

    #USA #New_York #Taxi #Betrug #Ausbeutung

  • Opinion | How New York Taxi Drivers Got Mired in Debt - The New York Times
    https://www.nytimes.com/2019/05/22/opinion/letters/new-york-taxi-drivers.html

    Readers decry unscrupulous lending practices and sympathize with the unwitting drivers whose lives were ruined.

    May 22, 2019

    The New York attorney general’s office said Monday it had opened an inquiry into more than a decade of lending practices that left thousands of immigrant taxi drivers in crushing debt.

    To the Editor:

    “Driven to Despair,” by Brian M. Rosenthal (“Taken for a Ride” series, front page, May 19), is both shocking and significant. It explains how medallion brokers and unscrupulous bank loan sharks have for personal profit put many thousands of unsophisticated New York City taxi drivers in debt and ruined their and their families’ lives by manipulating the taxi medallion business and writing risky loans.

    New York City and New York State governments need to exert better, fairer control of the taxi medallion business, help debt-ridden drivers and punish severely those money-grubbing entrepreneurs who have profited unduly at the expense of others.

    Norton Mezvinsky
    New York

    To the Editor:

    The corrupt practices outlined in this valuable exposé have created a new genre of poverty among taxi drivers. Many can no longer afford to drive, while others can barely afford routine maintenance and their cabs are often in need of repair. The same situation exists in Chicago. Restitution must be paid to those who were duped by city governments eager for revenue.

    The other half of the story that requires documentation is how Uber and Lyft grew up unimpeded by rules that applied only to taxi drivers, creating an environment of unfair competition.

    Bruce Joshua Miller
    Chicago

    To the Editor:

    Why in the world did New York City allow the value of medallions to rise and fall, such that industry leaders “steadily and artificially drove up the price of taxi medallions, creating a bubble that eventually burst”?

    Why not simply set a fixed price adjusted for inflation that drivers could pay, period? All the problems described in your article would have been avoided.

    Jean-François Brière
    Delmar, N.Y.

    #USA #New_York #Taxi #Betrug #Ausbeutung

  • Taxi Industry Leaders Got Rich. Drivers Paid the Price. - The New York Times
    https://www.nytimes.com/2019/05/21/nyregion/newyorktoday/nyc-news-taxi-medallions.html

    In the past year and a half, eight professional drivers, including three taxi medallion owners, have died by suicide. Since 2016, 950 taxi drivers have filed for bankruptcy. And as of Monday, a city task force created last year to study the taxi industry had no members.

    The Times published an investigation this week into what caused financial ruin for so many drivers.

    Industry disrupters like Uber and Lyft have drawn lots of attention, but the real problem was that lenders made reckless loans as regulators looked on, my colleague Brian M. Rosenthal reported. The loans generated huge profits for lenders, as well as for city coffers.

    The practices were similar to those that led to the housing market crash and global financial crisis of 2008. They also created what one analyst called “modern-day indentured servitude.”

    Here are five takeaways from Mr. Rosenthal’s investigation.

    [Read Part 1 of the investigation: How reckless loans devastated a generation of taxi drivers.]

    Uber and Lyft did not cause the crisis in New York City’s yellow taxi industry

    The taxi medallion bubble burst in 2014. Uber entered the city in 2011, and Lyft in 2014.

    The internet-based ride-hailing companies may have hastened the crisis, but virtually all of the hundreds of industry veterans interviewed for the investigation said the industry would have collapsed regardless because of inflated medallion prices and risky lending practices.

    City data shows that 97 percent of yellow cab rides start in central Manhattan, or at the airports, where Uber and Lyft are less popular.

    On a per-cab basis, each taxi’s revenue has decreased by about 10 percent since Uber entered New York, according to the city’s data.

    Taxi industry leaders artificially inflated the price of taxi medallions

    To drive a yellow taxi in the city, you need a medallion.

    After years of stability, medallion prices soared from $200,000 in 2002 to more than $1 million in 2014. Some industry leaders have admitted to intentionally causing prices to spike. During that time, revenue generated by taxis barely changed.

    Taxi industry leaders steered drivers into reckless loans

    From 2002 through 2014, about 4,000 people signed loans to buy taxi medallions.

    Drivers borrowed up to $1 million, often without a down payment, according to financial documents. Many were required to repay their loans within three years, which was practically impossible, forcing them to extend the terms of their loans at inflated interest rates.

    Hundreds of drivers signed interest-only loans requiring them to forfeit legal rights and indefinitely give up almost every dollar they earned.

    You can imagine the toll: Some borrowed even more money, and a few, facing financial and other pressures, died by suicide.

    [Read Part 2: How top officials counted money while drivers were trapped in loans.]

    Lenders protected themselves by selling those loans

    People who made risky taxi loans protected themselves by selling the loans to other institutions.

    At the market’s height, the six nonprofit credit unions most involved in the industry sold about $3 billion in medallion loans to 122 other credit unions, according to financial disclosure forms.

    Officials ignored years of warning signs

    In 2010, a city employee wrote a report showing that cabbies weren’t making enough to support their loans.

    In 2014, state inspectors gave a presentation to officials in Albany.

    Earlier this year, Corey Johnson, the City Council speaker, shut the committee overseeing the industry, saying it had completed most of its work.

    The state attorney general’s office said yesterday that it had opened an inquiry into the lending practices, while Mayor de Blasio ordered a city investigation into the brokers who helped arrange loans.

    #USA #New_York #Taxi #Betrug #Ausbeutung

  • De Blasio calls for probe of taxi lenders
    https://nypost.com/2019/05/20/de-blasio-calls-for-probe-of-taxi-lenders-following-predatory-loan-report

    May 20, 2019 - Mayor Bill de Blasio launched a probe Monday of the city taxi market following a damning report that claimed industry leaders duped drivers with predatory loans and artificially inflated the costs of cab medallions for years– leading to their eventual collapse.

    “Today I ordered a joint investigation by the Taxi and Limousine Commission, Department of Finance and Department of Consumer Affairs into predatory practices by brokers in the taxi industry,” the mayor said in a statement.

    The 45-day review will identify and penalize brokers who have taken advantage of buyers and misled city authorities, the mayor said.

    The New York Times reported Sunday that brokers shopped exploitative loans to cash-strapped, often immigrant drivers who were crushed by hefty monthly fees.

    De Blasio said the review will set new rules to prevent future abuses.

    “It’s unacceptable to prey on hardworking New Yorkers trying to support their families and we’ll do all that we can to put an end to it,” he said.

    The deep decrease in medallion values from a high of $1.3 million in 2013 to just $250,000 last year is also due to the flood of Uber and Lyft cars into the market.

    #USA #New_York #Taxi #Betrug #Ausbeutung

  • Inquiries Into Reckless Loans to Taxi Drivers Ordered by State Attorney General and Mayor - The New York Times
    https://www.nytimes.com/2019/05/20/nyregion/nyc-taxi-medallion-loans-attorney-general.html

    May 20, 2019 - The investigations come after The New York Times found that thousands of drivers were crushed under debt they could not repay.

    The New York attorney general’s office said Monday it had opened an inquiry into more than a decade of lending practices that left thousands of immigrant taxi drivers in crushing debt, while Mayor Bill de Blasio ordered a separate investigation into the brokers who helped arrange the loans.

    The efforts marked the government’s first steps toward addressing a crisis that has engulfed the city’s yellow cab industry. They came a day after The New York Times published a two-part investigation revealing that a handful of taxi industry leaders artificially inflated the price of a medallion — the coveted permit that allows a driver to own and operate a cab — and made hundreds of millions of dollars by issuing reckless loans to low-income buyers.

    The investigation also found that regulators at every level of government ignored warning signs, and the city fed the frenzy by selling medallions and promoting them in ads as being “better than the stock market.”

    The price of a medallion rose to more than $1 million before crashing in late 2014, which left borrowers with debt they had little hope of repaying. More than 950 medallion owners have filed for bankruptcy, and thousands more are struggling to stay afloat.

    The findings also drew a quick response from other elected officials. The chairman of the Assembly’s banking committee, Kenneth Zebrowski, a Democrat, said his committee would hold a hearing on the issue; the City Council speaker, Corey Johnson, said he was drafting legislation; and several other officials in New York and Albany called for the government to pressure lenders to soften loan terms.

    The biggest threat to the industry leaders appeared to be the inquiry by the attorney general, Letitia James, which will aim to determine if the lenders engaged in any illegal activity.

    “Our office is beginning an inquiry into the disturbing reports regarding the lending and business practices that may have created the taxi medallion crisis,” an office spokeswoman said in a statement. “These allegations are serious and must be thoroughly scrutinized.”

    Gov. Andrew M. Cuomo said through a spokesman that he supported the inquiry. “If any of these businesses or lenders did something wrong, they deserve to be held fully accountable,” the spokesman said in a statement.

    Lenders did not respond to requests for comment. Previously, they denied wrongdoing, saying regulators had approved all of their practices and some borrowers had made poor decisions and assumed too much debt. Lenders blamed the crisis on the city for allowing ride-hailing companies like Uber and Lyft to enter without regulation, which they said led medallion values to plummet.

    Mr. de Blasio said the city’s investigation will focus on the brokers who arranged the loans for drivers and sometimes lent money themselves.

    “The 45-day review will identify and penalize brokers who have taken advantage of buyers and misled city authorities,” the mayor said in a statement. “The review will set down strict new rules that prevent broker practices that hurt hard-working drivers.”

    Four of the city’s biggest taxi brokers did not respond to requests for comment.

    Bhairavi Desai, founder of the Taxi Workers Alliance, which represents drivers and independent owners, said the city should not get to investigate the business practices because it was complicit in many of them.

    The government has already closed or merged all of the nonprofit credit unions that were involved in the industry, saying they participated in “unsafe and unsound banking practices.” At least one credit union leader, Alan Kaufman, the former chief executive of Melrose Credit Union, a major medallion lender, is facing civil charges.

    The other lenders in the industry include Medallion Financial, a specialty finance company; some major banks, including Capital One and Signature Bank; and several loosely regulated taxi fleet owners and brokers who entered the lending business.

    At City Hall, officials said Monday they were focused on how to help the roughly 4,000 drivers who bought medallions during the bubble, as well as thousands of longtime owners who were encouraged to refinance their loans to take out more money during that period.

    One city councilman, Mark Levine, said he was drafting a bill that would allow the city to buy medallion loans from lenders and then forgive much of the debt owed by the borrowers. He said lenders likely would agree because they are eager to exit the business. But he added that his bill would force lenders to sell at discounted prices.

    “The city made hundreds of millions by pumping up sales of wildly overpriced medallions — as late as 2014 when it was clear that these assets were poised to decline,” said Mr. Levine, a Democrat. “We have an obligation now to find some way to offer relief to the driver-owners whose lives have been ruined.”

    Scott M. Stringer, the city comptroller, proposed a similar solution in a letter to the mayor. He said the city should convene the lenders and pressure them to partially forgive loans.

    “These lenders too often dealt in bad faith with a group of hard-working, unsuspecting workers who deserved much better and have yet to receive any measure of justice,” wrote Mr. Stringer, who added that the state should close a loophole that allowed the lenders to classify their loans as business deals, which have looser regulations.

    Last November, amid a spate of suicides by taxi drivers, including three medallion owners with overwhelming debt, the Council created a task force to study the taxi industry.

    On Monday, a spokesman for the speaker, Mr. Johnson, said that members of the task force would be appointed very soon. He also criticized the Taxi and Limousine Commission, the city agency that sold the medallions.

    “We will explore every tool we have to ensure that moving forward, the T.L.C. protects medallion owners and drivers from predatory actors including lenders, medallion brokers, and fleet managers,” Mr. Johnson said in a statement.

    Another councilman, Ritchie Torres, who heads the Council’s oversight committee, disclosed Monday for the first time that he had been trying to launch his own probe since last year, but had been stymied by the taxi commission. “The T.L.C. hasn’t just been asleep at the wheel, they have been actively stonewalling,” he said.

    A T.L.C. spokesman declined to comment.

    In Albany, several lawmakers also said they were researching potential bills.

    One of them, Assemblywoman Yuh-Line Niou of Manhattan, a member of the committee on banks, said she hoped to pass legislation before the end of the year. She said the state agencies involved in the crisis, including the Department of Financial Services, should be examined.

    “My world has been shaken right now, to be honest,” Ms. Niou said.

    Brian M. Rosenthal is an investigative reporter on the Metro Desk. Previously, he covered state government for the Houston Chronicle and for The Seattle Times. @brianmrosenthal

    #USA #New_York #Taxi #Betrug #Ausbeutung

  • Bad loans were killing the taxi industry long before Uber and Lyft: report
    https://nypost.com/2019/05/19/bad-loans-were-killing-the-taxi-industry-long-before-uber-and-lyft-report

    The financial woes of the city taxi market may not be entirely the fault of ride-hailing companies — the industry was a house of cards waiting to collapse, a report says.

    An investigation by the New York Times Sunday put the blame on industry leaders who artificially inflated taxi medallions costs fivefold over 12 years and created a massively profitable loan market built on questionable lending practices similar to those at the center of the housing crash.

    In 2013, a taxi medallion fetched $1.3 million, but by last year, the market had plunged and medallions were selling for less than $250,000.

    While much of the decline in value can be attributed to the flood of Uber and Lyft drivers, the report says exploitative loans, hundreds of which were interest-only, strapped drivers, often immigrants and unclear on the terms, with hefty monthly costs.

    The report says some loan costs became so steep, there weren’t enough hours in a week to drive to make a profit and eventually, all of their monthly fares went to pay the loans.

    When the market bottomed out in 2014, the head of the Progressive Credit Union, Robert Familan, made nearly $35 million from his medallion loan non-profit company.

    Employees were encouraged to give out shaky loans with bonuses and trips, the report says.

    The lenders denied any wrongdoing and the former chairwoman of the city’s Taxi and Limousine Commission said it wasn’t the commission’s job to regulate the lending, the report says.

    But Meera Joshi did tell the paper “lots of people just watched it happen.”

    #USA #New_York #Taxi #Betrug #Ausbeutung

  • As Thousands of Taxi Drivers Were Trapped in Loans, Top Officials Counted the Money - The New York Times
    https://www.nytimes.com/2019/05/19/nyregion/taxi-medallions.html

    [Read Part 1 of The Times’s investigation: How Reckless Loans Devastated a Generation of Taxi Drivers]

    At a cramped desk on the 22nd floor of a downtown Manhattan office building, Gary Roth spotted a looming disaster.

    An urban planner with two master’s degrees, Mr. Roth had a new job in 2010 analyzing taxi policy for the New York City government. But almost immediately, he noticed something disturbing: The price of a taxi medallion — the permit that lets a driver own a cab — had soared to nearly $700,000 from $200,000. In order to buy medallions, drivers were taking out loans they could not afford.

    Mr. Roth compiled his concerns in a report, and he and several colleagues warned that if the city did not take action, the loans would become unsustainable and the market could collapse.

    They were not the only ones worried about taxi medallions. In Albany, state inspectors gave a presentation to top officials showing that medallion owners were not making enough money to support their loans. And in Washington, D.C., federal examiners repeatedly noted that banks were increasing profits by steering cabbies into risky loans.

    They were all ignored.

    Medallion prices rose above $1 million before crashing in late 2014, wiping out the futures of thousands of immigrant drivers and creating a crisis that has continued to ravage the industry today. Despite years of warning signs, at least seven government agencies did little to stop the collapse, The New York Times found.

    Instead, eager to profit off medallions or blinded by the taxi industry’s political connections, the agencies that were supposed to police the industry helped a small group of bankers and brokers to reshape it into their own moneymaking machine, according to internal records and interviews with more than 50 former government employees.

    For more than a decade, the agencies reduced oversight of the taxi trade, exempted it from regulations, subsidized its operations and promoted its practices, records and interviews showed.

    Their actions turned one of the best-known symbols of New York — its signature yellow cabs — into a financial trap for thousands of immigrant drivers. More than 950 have filed for bankruptcy, according to a Times analysis of court records, and many more struggle to stay afloat.

    Remember the ‘10,000 Hours’ Rule for Success? Forget About It
    “Nobody wanted to upset the industry,” said David Klahr, who from 2007 to 2016 held several management posts at the Taxi and Limousine Commission, the city agency that oversees cabs. “Nobody wanted to kill the golden goose.”

    New York City in particular failed the taxi industry, The Times found. Two former mayors, Rudolph W. Giuliani and Michael R. Bloomberg, placed political allies inside the Taxi and Limousine Commission and directed it to sell medallions to help them balance budgets and fund priorities. Mayor Bill de Blasio continued the policies.

    Under Mr. Bloomberg and Mr. de Blasio, the city made more than $855 million by selling taxi medallions and collecting taxes on private sales, according to the city.

    But during that period, much like in the mortgage lending crisis, a group of industry leaders enriched themselves by artificially inflating medallion prices. They encouraged medallion buyers to borrow as much as possible and ensnared them in interest-only loans and other one-sided deals that often required them to pay hefty fees, forfeit their legal rights and give up most of their monthly incomes.

    When the medallion market collapsed, the government largely abandoned the drivers who bore the brunt of the crisis. Officials did not bail out borrowers or persuade banks to soften loan terms.

    “They sell us medallions, and they knew it wasn’t worth price. They knew,” said Wael Ghobrayal, 42, an Egyptian immigrant who bought a medallion at a city auction for $890,000 and now cannot make his loan payments and support his three children.

    “They lost nothing. I lost everything,” he said.

    The Times conducted hundreds of interviews, reviewed thousands of records and built several databases to unravel the story of the downfall of the taxi industry in New York and across the United States. The investigation unearthed a collapse that was years in the making, aided almost as much by regulators as by taxi tycoons.

    Publicly, government officials have blamed the crisis on competition from ride-hailing firms such as Uber and Lyft.

    In interviews with The Times, they blamed each other.

    The officials who ran the city Taxi and Limousine Commission in the run-up to the crash said it was the job of bank examiners, not the commission, to control lending practices.

    The New York Department of Financial Services said that while it supervised some of the banks involved in the taxi industry, it deferred to federal inspectors in many cases.

    The federal agency that oversaw many of the largest lenders in the industry, the National Credit Union Administration, said those lenders were meeting the needs of borrowers.

    The N.C.U.A. released a March 2019 internal audit that scolded its regulators for not aggressively enforcing rules in medallion lending. But even that audit partially absolved the government. The lenders, it said, all had boards of directors that were supposed to prevent reckless practices.

    And several officials criticized Congress, which two decades ago excepted credit unions in the taxi industry from some rules that applied to other credit unions. After that, the officials said, government agencies had to treat those lenders differently.

    Ultimately, former employees said, the regulatory system was set up to ensure that lenders were financially stable, and medallions were sold. But almost nothing protected the drivers.

    Matthew W. Daus, far right, at a hearing of the New York City Taxi and Limousine Commission in 2004. CreditMarilynn K. Yee/The New York Times
    Matthew W. Daus was an unconventional choice to regulate New York’s taxi industry. He was a lawyer from Brooklyn and a leader of a political club that backed Mr. Giuliani for mayor.

    The Giuliani administration hired him as a lawyer for the Taxi and Limousine Commission before appointing him chairman in 2001, a leadership post he kept after Mr. Bloomberg became mayor in 2002.

    The commission oversaw the drivers and fleets that owned the medallions for the city’s 12,000 cabs. It licensed all participants and decided what cabs could charge, where they could go and which type of vehicle they could use.

    And under Mr. Bloomberg, it also began selling 1,000 new medallions.

    At the time, the mayor said the growing city needed more yellow cabs. But he also was eager for revenue. He had a $3.8 billion hole in his budget.

    The sales put the taxi commission in an unusual position.

    It had a long history of being entangled with the industry. Its first chairman, appointed in 1971, was convicted of a bribery scheme involving an industry lobbyist. Four other leaders since then had worked in the business.

    It often sent staffers to conferences where companies involved in the taxi business paid for liquor, meals and tickets to shows, and at least one past member of its board had run for office in a campaign financed by the industry.

    Still, the agency had never been asked to generate so much money from the business it was supposed to be regulating.

    Former staffers said officials chose to sell medallions with the method they thought would bring in the most revenue: a series of limited auctions that required participants to submit sealed bids above ever-increasing minimums.

    Ahead of the sales, the city placed ads on television and radio, and in newspapers and newsletters, and held seminars promoting the “once-in-a-lifetime opportunity.”

    “Medallions have a long history as a solid investment with steady growth,” Mr. Daus wrote in one newsletter. In addition to guaranteed employment, he wrote, “a medallion is collateral that can assist in home financing, college tuition or even ‘worry-free’ retirement.”

    At the first auctions under Mr. Bloomberg in 2004, bids topped $300,000, surprising experts.

    Some former staffers said in interviews they believed the ad campaign inappropriately inflated prices by implying medallions would make buyers rich, no matter the cost. Seven said they complained.

    The city eventually added a disclaimer to ads, saying past performance did not guarantee future results. But it kept advertising.

    During the same period, the city also posted information on its website that said that medallion prices were, on average, 13 percent higher than they really were, according to a Times data analysis.

    In several interviews, Mr. Daus defended the ad campaigns, saying they reached people who had been unable to break into the tight market. The ads were true at the time, he said. He added he had never heard internal complaints about the ads.

    In all, the city held 16 auctions between 2004 and 2014.

    “People don’t realize how organized it is,” Andrew Murstein, president of Medallion Financial, a lender to medallion buyers, said in a 2011 interview with Tearsheet Podcast. “The City of New York, more or less, is our partner because they want to see prices go as high as possible.”

    Help from a federal agency

    New York City made more than $855 million from taxi medallion sales under Mayor Bill de Blasio and his predecessor, Michael R. Bloomberg.

    For decades, a niche banking system had grown up around the taxi industry, and at its center were about half a dozen nonprofit credit unions that specialized in medallion loans. But as the auctions continued, the families that ran the credit unions began to grow frustrated.

    Around them, they saw other lenders making money by issuing loans that they could not because of the rules governing credit unions. They recognized a business opportunity, and they wanted in.

    They found a receptive audience at the National Credit Union Administration.

    The N.C.U.A. was the small federal agency that regulated the nation’s credit unions. It set the rules, examined their books and insured their accounts.

    Like the city taxi commission, the N.C.U.A. had long had ties to the industry that it regulated. One judge had called it a “rogue federal agency” focused on promoting the industry.

    In 2004, its chairman was Dennis Dollar, a former Mississippi state representative who had previously worked as the chief executive of a credit union. He had just been inducted into the Mississippi Credit Union Hall of Fame, and he had said one of his top priorities was streamlining regulation.

    Dennis Dollar, the former chairman of the National Credit Union Administration, is now a consultant in the industry. 

    Under Mr. Dollar and others, the N.C.U.A. issued waivers that exempted medallion loans from longstanding rules, including a regulation requiring each loan to have a down payment of at least 20 percent. The waivers allowed the lenders to keep up with competitors and to write more profitable loans.

    Mr. Dollar, who left government to become a consultant for credit unions, said the agency was following the lead of Congress, which passed a law in 1998 exempting credit unions specializing in medallion loans from some regulations. The law signaled that those lenders needed leeway, such as the waivers, he said.

    “If we did not do so, the average cabdriver couldn’t get a medallion loan,” Mr. Dollar said.

    The federal law and the N.C.U.A. waivers were not the only benefits the industry received. The federal government also provided many medallion lenders with financial assistance and guaranteed a portion of their taxi loans, assuring that if those loans failed, they would still be partially paid, according to records and interviews.

    As lenders wrote increasingly risky loans, medallion prices neared $500,000 in 2006.

    ‘Snoozing and napping’

    Under Mr. Bloomberg, the New York City Taxi and Limousine Commission began selling 1,000 new medallions.

    Another agency was also supposed to be keeping an eye on lending practices. New York State banking regulators are required to inspect all financial institutions chartered in the state. But after 2008, they were forced to focus their attention on the banks most affected by the global economic meltdown, according to former employees.

    As a result, some industry veterans said, the state stopped examining medallion loans closely.

    “The state banking department would come in, and they’d be doing the exam in one room, and the N.C.U.A. would be in another room,” said Larry Fisher, who was then the medallion lending supervisor at Melrose Credit Union, one of the biggest lenders. “And you could catch the state banking department snoozing and napping and going on the internet and not doing much at all.”

    The state banking department, which is now called the New York Department of Financial Services, disputed that characterization and said it had acted consistently and appropriately.

    Former federal regulators described a similar trend at their agencies after the recession.

    Some former employees of the N.C.U.A., the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency said that as medallion prices climbed, they tried to raise issues with loans and were told not to worry. The Securities and Exchange Commission and the Federal Reserve Board also oversaw some lenders and did not intervene.

    A spokesman for the Federal Reserve said the agency was not a primary regulator of the taxi lending industry. The rest of the agencies declined to comment.

    “It was obvious that the loans were unusual and risky,” said Patrick Collins, a former N.C.U.A. examiner. But, he said, there was a belief inside his agency that the loans would be fine because the industry had been stable for decades.

    Meanwhile, in New York City, the taxi commission reduced oversight.

    For years, it had made medallion purchasers file forms describing how they came up with the money, including details on all loans. It also had required industry participants to submit annual disclosures on their finances, loans and conflicts of interest.

    But officials never analyzed the forms filed by buyers, and in the 2000s, they stopped requiring the annual disclosures altogether.

    “Reviewing these disclosures was an onerous lift for us,” the commission’s communications office said in a recent email.

    By 2008, the price of a medallion rose to $600,000.

    At around the same time, the commission began focusing on new priorities. It started developing the “Taxi of Tomorrow,” a model for future cabs.

    The agency’s main enforcement activities targeted drivers who cheated passengers or discriminated against people of color. “Nobody really scrutinized medallion transfers,” said Charles Tortorici, a former commission lawyer.

    A spokesman for Mr. Bloomberg said in a statement that during the mayor’s tenure, the city improved the industry by installing credit card machines and GPS devices, making fleets more environmentally efficient and creating green taxis for boroughs outside Manhattan.

    “The industry was always its own worst enemy, fighting every reform tooth and nail,” said the spokesman, Marc La Vorgna. “We put our energy and political capital into the reforms that most directly and immediately impacted the riding public.”

    Records show that since 2008, the taxi commission has not taken a single enforcement action against brokers, the powerful players who arrange medallion sales and loans.

    Alex Korenkov, a broker, suggested in an interview that he and other brokers took notice of the city’s hands-off approach.

    “Let’s put it this way,” he said. “If governing body does not care, then free-for-all.”

    By the time that Mr. Roth wrote his report at the Taxi and Limousine Commission in 2010, it was clear that something strange was happening in the medallion market.

    Mr. Daus gave a speech that year that mentioned the unusual lending practices. During the speech, he said banks were letting medallion buyers obtain loans without any down payment. Experts have since said that should have raised red flags. But at the time, Mr. Daus seemed pleased.

    “Some of these folks were offering zero percent down,” he said. “You tell me what bank walks around asking for zero percent down on a loan? It’s just really amazing.”

    In interviews, Mr. Daus acknowledged that the practice was unusual but said the taxi commission had no authority over lending.

    Inside the commission, at least four employees raised concerns about the medallion prices and lending practices, according to the employees, who described their own unease as well as Mr. Roth’s report.

    David S. Yassky, a former city councilman who succeeded Mr. Daus as commission chairman in 2010, said in an interview that he never saw Mr. Roth’s report.

    Mr. Yassky said the medallion prices puzzled him, but he could not determine if they were inflated, in part because people were still eager to buy. Medallions may have been undervalued for decades, and the price spike could have been the market recognizing the true value, he suggested.

    Meera Joshi, who became chairwoman in 2014, said in an interview that she was worried about medallion costs and lending practices but was pushed to prioritize other responsibilities. Dominic Williams, Mr. de Blasio’s chief policy adviser, said the city focused on initiatives such as improving accessibility because no one was complaining about loans.

    Worries about the taxi industry also emerged at the National Credit Union Administration. In late 2011, as the price of some medallions reached $800,000, a group of agency examiners wrote a paper on the risks in the industry, according to a recent report by the agency’s inspector general.

    In 2012, 2013 and 2014, inspectors routinely documented instances of credit unions violating lending rules, the inspector general’s report said.

    David S. Yassky, the former chairman of the New York City Taxi and Limousine Commission.

    The N.C.U.A. chose not to penalize medallion lenders or impose extra oversight. It did not take any wide industry action until April 2014, when it sent a letter reminding the credit unions in the taxi market to act responsibly.

    Former staffers said the agency was still focused on the fallout from the recession.

    A spokesman for the N.C.U.A. disputed that characterization and said the agency conducted appropriate enforcement.

    He added the agency took actions to ensure the credit unions remained solvent, which was its mission. He said Congress allowed the lenders to concentrate heavily on medallion loans, which left them vulnerable when Uber and Lyft arrived.

    At the New York Department of Financial Services, bank examiners noticed risky practices and interest-only loans and repeatedly wrote warnings starting in 2010, according to the state. At least one report expressed concern of a potential market bubble, the state said.

    Eventually, examiners became so concerned that they made a PowerPoint presentation and called a meeting in 2014 to show it to a dozen top officials.

    “Since 2001, individual medallion has risen 455%,” the presentation warned, according to a copy obtained by The Times. The presentation suggested state action, such as sending a letter to the industry or revoking charters from some lenders.

    The state did neither. The department had recently merged with the insurance department, and former employees said it was finding its footing.

    The department superintendent at the time, Benjamin M. Lawsky, a former aide to Gov. Andrew M. Cuomo, said he did not, as a rule, discuss his tenure at the department.

    In an emailed statement, the department denied it struggled after the merger and said it took action to stop the collapse of the medallion market. A department spokesman provided a long list of warnings, suggestions and guidelines that it said examiners had issued to lenders. He said that starting in 2012, the department downgraded some of its own internal ratings of the lenders.

    The list did not include any instances of the department formally penalizing a medallion lender, or making any public statement about the industry before it collapsed.

    Between 2010 and 2014, as officials at every level of government failed to rein in the risky lending practices, records show that roughly 1,500 people bought taxi medallions. Over all, including refinancings of old loans and extensions required by banks, medallion owners signed at least 10,000 loans in that time.

    Several regulators who tried to raise alarms said they believed the government stood aside because of the industry’s connections.

    Many pointed to one company — Medallion Financial, run by the Murstein family. Former Gov. Mario M. Cuomo, the current governor’s father, was a paid member of its board from 1996 until he died in 2015.

    Others noted that Mr. de Blasio has long been close to the industry. When he ran for mayor in 2013, an industry lobbyist, Michael Woloz, was a top fund-raiser, records show. And Evgeny Freidman, a major fleet owner who has admitted to artificially inflating medallion prices, has said he is close to the mayor.

    Some people, including Mr. Dollar, the former N.C.U.A. chairman, said Congress excepted the taxi trade from rules because the industry was supported by former United States Senator Alfonse D’Amato of New York, who was then the chairman of the Senate Banking Committee.

    “The taxi industry is one of the most politically connected industries in the city,” said Fidel Del Valle, who was the chairman of the taxi commission from 1991 to 1994. He later worked as a lawyer for drivers and a consultant to an owner association run by Mr. Freidman. “It’s been that way for decades, and they’ve used that influence to push back on regulation, with a lot of success.”

    A spokesman for Mr. Cuomo said Medallion Financial was not regulated by the state, so the elder Mr. Cuomo’s position on the board was irrelevant. A spokeswoman for Mr. de Blasio said the industry’s connections did not influence the city.

    Mr. Murstein, Mr. Woloz, Mr. Freidman and Mr. D’Amato all declined to comment.

    The aftermath
    “I think city will help me,” Mohammad Hossain, who is in deep debt from a taxi medallion loan, said at his family’s home in the Bronx.

    New York held its final independent medallion auction in February 2014. By then, concerns about medallion prices were common in the news media and government offices, and Uber had established itself. Still, the city sold medallions to more than 150 bidders. (“It’s better than the stock market,” one ad said.)

    Forty percent of the people who bought medallions at that auction have filed for bankruptcy, according to a Times analysis of court records.

    Mohammad Hossain, 47, from Bangladesh, who purchased a medallion for $853,000 at the auction, said he could barely make his monthly payments and was getting squeezed by his lender. “I bought medallion from the city,” he said through tears. “I think city will help me, you know. I assume that.”

    The de Blasio administration’s only major response to the crisis has been to push for a cap on ride-hail cars. The City Council at first rejected a cap in 2015 before approving it last year.

    Taxi industry veterans said the cap did not address the cause of the crisis: the lending practices.

    Richard Weinberg, a taxi commission hearing officer from 1988 to 2002 and a lawyer for drivers since then, said that when the medallion bubble began to burst, the city should have frozen prices, adjusted fares and fees and convinced banks to be flexible with drivers. That could have allowed prices to fall slowly. “That could’ve saved a lot of people,” he said.

    In an interview, Dean Fuleihan, the first deputy mayor, said the city did help taxi owners, including by reducing some fees, taxes and inspection mandates, and by talking to banks about loans. He said that if the City Council had passed the cap in 2015, it would have helped.

    “We do care about those drivers, we care about those families. We attempted throughout this period to take actions,” he said.

    Federal regulators also have not significantly helped medallion owners.

    In 2017 and 2018, the N.C.U.A. closed or merged several credit unions for “unsafe business practices” in medallion lending. It took over many of the loans, but did not soften terms, according to borrowers. Instead, it tried to get money out as quickly as possible.

    The failure of the credit unions has cost the national credit union insurance fund more than $750 million, which will hurt all credit union members.

    In August 2018, the N.C.U.A. closed Melrose in what it said was the biggest credit union liquidation in United States history. The agency barred Melrose’s general counsel from working for credit unions and brought civil charges against its former C.E.O., Alan Kaufman, saying he used company funds to help industry partners in exchange for gifts.

    The general counsel, Mitchell Reiver, declined to answer questions but said he did nothing wrong. Mr. Kaufman said in an interview that the N.C.U.A. made up the charges to distract from its role in the crisis.

    “I’m definitely a scapegoat,” Mr. Kaufman said. “There’s no doubt about it.”

    Glamour, then poverty
    After he struggled to repay his taxi medallion loan, Abel Vela left his family in New York and moved back to Peru, where living costs were cheaper. 

    During the medallion bubble, the city produced a television commercial to promote the permits. In the ad, which aired in 2004, four cabbies stood around a taxi discussing the perks of the job. One said buying a medallion was the best decision he had ever made. They all smiled. Then Mr. Daus appeared on screen to announce an auction.

    Fifteen years later, the cabbies remember the ad with scorn. Three of the four were eventually enticed to refinance their original loans under far riskier terms that left them in heavy debt.

    One of the cabbies, Abel Vela, had to leave his wife and children and return to his home country, Peru, because living costs were lower there. He is now 74 and still working to survive.

    The city aired a commercial in 2004 to promote an upcoming auction of taxi medallions. The ad featured real cab drivers, but three of them eventually took on risky loans and suffered financial blows.
    The only woman in the ad, Marie Applyrs, a Haitian immigrant, fell behind on her loan payments and filed for bankruptcy in November 2017. She lost her cab, and her home. She now lives with her children, switching from home to home every few months.

    “When the ad happened, the taxi was in vogue. I think I still have the tape somewhere. It was glamorous,” she said. “Now, I’m in the poorhouse.”

    Today, the only person from the television commercial still active in the industry is Mr. Daus. He works as a lawyer for lenders.

    [Read Part 1 of The Times’s investigation: How Reckless Loans Devastated a Generation of Taxi Drivers]

    Madeline Rosenberg contributed reporting. Doris Burke contributed research. Produced by Jeffrey Furticella and Meghan Louttit.

    #USA #New_York #Taxi #Betrug #Ausbeutung

  • ‘They Were Conned’: How Reckless Loans Devastated a Generation of Taxi Drivers - The New York Times
    https://www.nytimes.com/2019/05/19/nyregion/nyc-taxis-medallions-suicides.html


    Mohammed Hoque with his three children in their studio apartment in Jamaica, Queens.

    May 19, 2019 - The phone call that ruined Mohammed Hoque’s life came in April 2014 as he began another long day driving a New York City taxi, a job he had held since emigrating from Bangladesh nine years earlier.

    The call came from a prominent businessman who was selling a medallion, the coveted city permit that allows a driver to own a yellow cab instead of working for someone else. If Mr. Hoque gave him $50,000 that day, he promised to arrange a loan for the purchase.

    After years chafing under bosses he hated, Mr. Hoque thought his dreams of wealth and independence were coming true. He emptied his bank account, borrowed from friends and hurried to the man’s office in Astoria, Queens. Mr. Hoque handed over a check and received a stack of papers. He signed his name and left, eager to tell his wife.

    Mr. Hoque made about $30,000 that year. He had no idea, he said later, that he had just signed a contract that required him to pay $1.7 million.

    Over the past year, a spate of suicides by taxi drivers in New York City has highlighted in brutal terms the overwhelming debt and financial plight of medallion owners. All along, officials have blamed the crisis on competition from ride-hailing companies such as Uber and Lyft.

    But a New York Times investigation found much of the devastation can be traced to a handful of powerful industry leaders who steadily and artificially drove up the price of taxi medallions, creating a bubble that eventually burst. Over more than a decade, they channeled thousands of drivers into reckless loans and extracted hundreds of millions of dollars before the market collapsed.

    These business practices generated huge profits for bankers, brokers, lawyers, investors, fleet owners and debt collectors. The leaders of nonprofit credit unions became multimillionaires. Medallion brokers grew rich enough to buy yachts and waterfront properties. One of the most successful bankers hired the rap star Nicki Minaj to perform at a family party.

    But the methods stripped immigrant families of their life savings, crushed drivers under debt they could not repay and engulfed an industry that has long defined New York. More than 950 medallion owners have filed for bankruptcy, according to a Times analysis of court records. Thousands more are barely hanging on.

    The practices were strikingly similar to those behind the housing market crash that led to the 2008 global economic meltdown: Banks and loosely regulated private lenders wrote risky loans and encouraged frequent refinancing; drivers took on debt they could not afford, under terms they often did not understand.

    Some big banks even entered the taxi industry in the aftermath of the housing crash, seeking a new market, with new borrowers.

    The combination of easy money, eager borrowers and the lure of a rare asset helped prices soar far above what medallions were really worth. Some industry leaders fed the frenzy by purposefully overpaying for medallions in order to inflate prices, The Times found.

    Between 2002 and 2014, the price of a medallion rose to more than $1 million from $200,000, even though city records showed that driver incomes barely changed.

    About 4,000 drivers bought medallions in that period, records show. They were excited to buy, but they were enticed by a dubious premise.

    What Actually Happened to New York’s Taxi DriversMay 28, 2019

    After the medallion market collapsed, Mayor Bill de Blasio opted not to fund a bailout, and earlier this year, the City Council speaker, Corey Johnson, shut down the committee overseeing the taxi industry, saying it had completed most of its work.

    Over 10 months, The Times interviewed 450 people, built a database of every medallion sale since 1995 and reviewed thousands of individual loans and other documents, including internal bank records and confidential profit-sharing agreements.

    The investigation found example after example of drivers trapped in exploitative loans, including hundreds who signed interest-only loans that required them to pay exorbitant fees, forfeit their legal rights and give up almost all their monthly income, indefinitely.

    A Pakistani immigrant who thought he was just buying a car ended up with a $780,000 medallion loan that left him unable to pay rent. A Bangladeshi immigrant said he was told to lie about his income on his loan application; he eventually lost his medallion. A Haitian immigrant who worked to exhaustion to make his monthly payments discovered he had been paying only interest and went bankrupt.

    Abdur Rahim, who is from Bangladesh, is one of several cab drivers who allege they were duped into signing exploitative loans. 
    It is unclear if the practices violated any laws. But after reviewing The Times’s findings, experts said the methods were among the worst that have been used since the housing crash.

    “I don’t think I could concoct a more predatory scheme if I tried,” said Roger Bertling, the senior instructor at Harvard Law School’s clinic on predatory lending and consumer protection. “This was modern-day indentured servitude.”

    Lenders developed their techniques in New York but spread them to Chicago, Boston, San Francisco and elsewhere, transforming taxi industries across the United States.

    In interviews, lenders denied wrongdoing. They noted that regulators approved their practices, and said some borrowers made poor decisions and assumed too much debt. They said some drivers were happy to use climbing medallion values as collateral to take out cash, and that those who sold their medallions at the height of the market made money.

    The lenders said they believed medallion values would keep increasing, as they almost always had. No one, they said, could have predicted Uber and Lyft would emerge to undercut the business.

    “People love to blame banks for things that happen because they’re big bad banks,” said Robert Familant, the former head of Progressive Credit Union, a small nonprofit that specialized in medallion loans. “We didn’t do anything, in my opinion, other than try to help small businesspeople become successful.”

    Mr. Familant made about $30 million in salary and deferred payouts during the bubble, including $4.8 million in bonuses and incentives in 2014, the year it burst, according to disclosure forms.

    Meera Joshi, who joined the Taxi and Limousine Commission in 2011 and became chairwoman in 2014, said it was not the city’s job to regulate lending. But she acknowledged that officials saw red flags and could have done something.

    “There were lots of players, and lots of people just watched it happen. So the T.L.C. watched it happen. The lenders watched it happen. The borrowers watched it happen as their investment went up, and it wasn’t until it started falling apart that people started taking action and pointing fingers,” said Ms. Joshi, who left the commission in March. “It was a party. Why stop it?”

    Every day, about 250,000 people hail a New York City yellow taxi. Most probably do not know they are participating in an unconventional economic system about as old as the Empire State Building.

    The city created taxi medallions in 1937. Unlicensed cabs crowded city streets, so officials designed about 12,000 specialized tin plates and made it illegal to operate a taxi without one bolted to the hood of the car. The city sold each medallion for $10.

    People who bought medallions could sell them, just like any other asset. The only restriction: Officials designated roughly half as “independent medallions” and eventually required that those always be owned by whoever was driving that cab.

    Over time, as yellow taxis became symbols of New York, a cutthroat industry grew around them. A few entrepreneurs obtained most of the nonindependent medallions and built fleets that controlled the market. They were family operations largely based in the industrial neighborhoods of Hell’s Kitchen in Manhattan and Long Island City in Queens.

    Allegations of corruption, racism and exploitation dogged the industry. Some fleet bosses were accused of cheating drivers. Some drivers refused to go outside Manhattan or pick up black and Latino passengers. Fleet drivers typically worked 60 hours a week, made less than minimum wage and received no benefits, according to city studies.

    Still, driving could serve as a path to the middle class. Drivers could save to buy an independent medallion, which would increase their earnings and give them an asset they could someday sell for a retirement nest egg.

    Those who borrowed money to buy a medallion typically had to submit a large down payment and repay within five to 10 years.

    The conservative lending strategy produced modest returns. The city did not release new medallions for almost 60 years, and values slowly climbed, hitting $100,000 in 1985 and $200,000 in 1997.

    “It was a safe and stable asset, and it provided a good life for those of us who were lucky enough to buy them,” said Guy Roberts, who began driving in 1979 and eventually bought medallions and formed a fleet. “Not an easy life, but a good life.”

    “And then,” he said, “everything changed.”

    – Before coming to America, Mohammed Hoque lived comfortably in Chittagong, a city on Bangladesh’s southern coast. He was a serious student and a gifted runner, despite a small and stocky frame. His father and grandfather were teachers; he said he surpassed them, becoming an education official with a master’s degree in management. He supervised dozens of schools and traveled on a government-issued motorcycle. In 2004, when he was 33, he married Fouzia Mahabub. -

    That same year, several of his friends signed up for the green card lottery, and their thirst for opportunity was contagious. He applied, and won.

    His wife had an uncle in Jamaica, Queens, so they went there. They found a studio apartment. Mr. Hoque wanted to work in education, but he did not speak enough English. A friend recommended the taxi industry.

    It was an increasingly common move for South Asian immigrants. In 2005, about 40 percent of New York cabbies were born in Bangladesh, India or Pakistan, according to the United States Census Bureau. Over all, just 9 percent were born in the United States.

    Mr. Hoque and his wife emigrated from Bangladesh, and have rented the same apartment in Queens since 2005.

    Mr. Hoque joined Taxifleet Management, a large fleet run by the Weingartens, a Russian immigrant family whose patriarchs called themselves the “Three Wise Men.”

    He worked 5 a.m. to 5 p.m., six days a week. On a good day, he said, he brought home $100. He often felt lonely on the road, and he developed back pain from sitting all day and diabetes, medical records show.

    He could have worked fewer shifts. He also could have moved out of the studio. But he drove as much as feasible and spent as little as possible. He had heard the city would soon be auctioning off new medallions. He was saving to buy one.

    Andrew Murstein, left, with his father, Alvin.CreditChester Higgins Jr./The New York Times
    In the early 2000s, a new generation took power in New York’s cab industry. They were the sons of longtime industry leaders, and they had new ideas for making money.

    Few people represented the shift better than Andrew Murstein.

    Mr. Murstein was the grandson of a Polish immigrant who bought one of the first medallions, built one of the city’s biggest fleets and began informally lending to other buyers in the 1970s. Mr. Murstein attended business school and started his career at Bear Stearns and Salomon Brothers, the investment banks.

    When he joined the taxi business, he has said, he pushed his family to sell off many medallions and to establish a bank to focus on lending. Medallion Financial went public in 1996. Its motto was, “In niches, there are riches.”

    Dozens of industry veterans said Mr. Murstein and his father, Alvin, were among those who helped to move the industry to less conservative lending practices. The industry veterans said the Mursteins, as well as others, started saying medallion values would always rise and used that idea to focus on lending to lower-income drivers, which was riskier but more profitable.

    The strategy began to be used by the industry’s other major lenders — Progressive Credit Union, Melrose Credit Union and Lomto Credit Union, all family-run nonprofits that made essentially all their money from medallion loans, according to financial disclosures.

    “We didn’t want to be the one left behind,” said Monte Silberger, Lomto’s controller and then chief financial officer from 1999 to 2017.

    The lenders began accepting smaller down payments. By 2013, many medallion buyers were not handing over any down payment at all, according to an analysis of buyer applications submitted to the city.

    “It got to a point where we didn’t even check their income or credit score,” Mr. Silberger said. “It didn’t matter.”

    Lenders also encouraged existing borrowers to refinance and take out more money when medallion prices rose, according to interviews with dozens of borrowers and loan officers. There is no comprehensive data, but bank disclosures suggest that thousands of owners refinanced.

    Industry veterans said it became common for owners to refinance to buy a house or to put children through college. “You’d walk into the bank and walk out 30 minutes later with an extra $200,000,” said Lou Bakalar, a broker who arranged loans.

    Yvon Augustin has been living with help from his children ever since he declared bankruptcy and lost his taxi medallion.

    Some pointed to the refinancing to argue that irresponsible borrowers fueled the crisis. “Medallion owners were misusing it,” said Aleksey Medvedovskiy, a fleet owner who also worked as a broker. “They used it as an A.T.M.”

    As lenders loosened standards, they increased returns. Rather than raising interest rates, they made borrowers pay a mix of costs — origination fees, legal fees, financing fees, refinancing fees, filing fees, fees for paying too late and fees for paying too early, according to a Times review of more than 500 loans included in legal cases. Many lenders also made borrowers split their loan and pay a much higher rate on the second loan, documents show.

    Lenders also extended loan lengths. Instead of requiring repayment in five or 10 years, they developed deals that lasted as long as 50 years, locking in decades of interest payments. And some wrote interest-only loans that could continue forever.

    “We couldn’t figure out why the company was doing so many interest-only loans,” said Michelle Pirritano, a Medallion Financial loan analyst from 2007 to 2011. “It was a good revenue stream, but it didn’t really make sense as a loan. I mean, it wasn’t really a loan, because it wasn’t being repaid.”

    Almost every loan reviewed by The Times included a clause that spiked the interest rate to as high as 24 percent if it was not repaid in three years. Lenders included the clause — called a “balloon” — so that borrowers almost always had to extend the loan, possibly at a higher rate than in the original terms, and with additional fees.

    Yvon Augustin was caught in one of those loans. He bought a medallion in 2006, a decade after emigrating from Haiti. He said he paid $2,275 every month — more than half his income, he said — and thought he was paying off the loan. But last year, his bank used the balloon to demand that he repay everything. That is when he learned he had been paying only the interest, he said.

    Mr. Augustin, 69, declared bankruptcy and lost his medallion. He lives off assistance from his children.

    During the global financial crisis, Eugene Haber, a lawyer for the taxi industry, started getting calls from bankers he had never met.

    Mr. Haber had written a template for medallion loans in the 1970s. By 2008, his thick mustache had turned white, and he thought he knew everybody in the industry. Suddenly, new bankers began calling his suite in a Long Island office park. Capital One, Signature Bank, New York Commercial Bank and others wanted to issue medallion loans, he said.

    Some of the banks were looking for new borrowers after the housing market collapsed, Mr. Haber said. “They needed somewhere else to invest,” he said. He said he represented some banks at loan signings but eventually became embittered because he believed banks were knowingly lending to people who could not repay.

    Instead of lending directly, the big banks worked through powerful industry players. They enlisted large fleet owners and brokers — especially Neil Greenbaum, Richard Chipman, Savas Konstantinides, Roman Sapino and Basil Messados — to use the banks’ money to lend to medallion buyers. In return, the owners and brokers received a cut of the monthly payments and sometimes an additional fee.

    The fleet owners and brokers, who technically issued the loans, did not face the same scrutiny as banks.

    “They did loans that were frankly insane,” said Larry Fisher, who from 2003 to 2016 oversaw medallion lending at Melrose Credit Union, one of the biggest lenders originally in the industry. “It contributed to the price increases and put a lot of pressure on the rest of us to keep up.”

    Evgeny Freidman, a fleet owner, has said he purposely overbid for taxi medallions in order to drive up their value.CreditSasha Maslov
    Still, Mr. Fisher said, Melrose followed lending rules. “A lot of people tend to blame others for their own misfortune,” he said. “If they want to blame the lender for the medallion going down the tubes the way it has, I think they’re misplaced.”

    Mr. Konstantinides, a fleet owner and the broker and lender who arranged Mr. Hoque’s loans, said every loan issued by his company abided by federal and state banking guidelines. “I am very sympathetic to the plight of immigrant families who are seeking a better life in this country and in this city,” said Mr. Konstantinides, who added that he was also an immigrant.

    Walter Rabin, who led Capital One’s medallion lending division between 2007 and 2012 and has led Signature Bank’s medallion lending division since, said he was one of the industry’s most conservative lenders. He said he could not speak for the brokers and fleet owners with whom he worked.

    Mr. Rabin and other Signature executives denied fault for the market collapse and blamed the city for allowing ride-hail companies to enter with little regulation. “It’s the City of New York that took the biggest advantage of the drivers,” said Joseph J. DePaolo, the president and chief executive of Signature. “It’s not the banks.”

    New York Commercial Bank said in a statement that it began issuing medallion loans before the housing crisis and that they were a very small part of its business. The bank did not engage in risky lending practices, a spokesman said.

    Mr. Messados said in an interview that he disagreed with interest-only loans and other one-sided terms. But he said he was caught between banks developing the loans and drivers clamoring for them. “They were insisting on this,” he said. “What are you supposed to do? Say, ‘I’m not doing the sale?’”

    Several lenders challenged the idea that borrowers were unsophisticated. They said that some got better deals by negotiating with multiple lenders at once.

    Mr. Greenbaum, Mr. Chipman and Mr. Sapino declined to comment, as did Capital One.

    Some fleet owners worked to manipulate prices. In the most prominent example, Evgeny Freidman, a brash Russian immigrant who owned so many medallions that some called him “The Taxi King,” said he purposefully overpaid for medallions sold at city auctions. He reasoned that the higher prices would become the industry standard, making the medallions he already owned worth more. Mr. Freidman, who was partners with Michael Cohen, President Trump’s former lawyer, disclosed the plan in a 2012 speech at Yeshiva University. He recently pleaded guilty to felony tax fraud. He declined to comment.

    As medallion prices kept increasing, the industry became strained. Drivers had to work longer hours to make monthly payments. Eventually, loan records show, many drivers had to use almost all their income on payments.

    “The prices got to be ridiculous,” said Vincent Sapone, the retired manager of the League of Mutual Taxi Owners, an owner association. “When it got close to $1 million, nobody was going to pay that amount of money, unless they came from another country. Nobody from Brooklyn was going to pay that.”

    Some drivers have alleged in court that lenders tricked them into signing loans.

    Muhammad Ashraf, who is not fluent in English, said he thought he was getting a loan to purchase a car but ended up in debt to buy a taxi medallion instead.

    Muhammad Ashraf, a Pakistani immigrant, alleged that a broker, Heath Candero, duped him into a $780,000 interest-only loan. He said in an interview in Urdu that he could not speak English fluently and thought he was just signing a loan to buy a car. He said he found out about the loan when his bank sued him for not fully repaying. The bank eventually decided not to pursue a case against Mr. Ashraf. He also filed a lawsuit against Mr. Candero. That case was dismissed. A lawyer for Mr. Candero declined to comment.

    Abdur Rahim, a Bangladeshi immigrant, alleged that his lender, Bay Ridge Credit Union, inserted hidden fees. In an interview, he added he was told to lie on his loan application. The application, reviewed by The Times, said he made $128,389, but he said his tax return showed he made about $25,000. In court, Bay Ridge has denied there were hidden fees and said Mr. Rahim was “confusing the predatory-lending statute with a mere bad investment.” The credit union declined to comment.

    Several employees of lenders said they were pushed to write loans, encouraged by bonuses and perks such as tickets to sporting events and free trips to the Bahamas.

    They also said drivers almost never had lawyers at loan closings. Borrowers instead trusted their broker to represent them, even though, unbeknown to them, the broker was often getting paid by the bank.

    Stan Zurbin, who between 2009 and 2012 did consulting work for a lender that issued medallion loans, said that as prices rose, lenders in the industry increasingly lent to immigrants.

    “They didn’t have 750 credit scores, let’s just say,” he said. “A lot of them had just come into the country. A lot of them just had no idea what they were signing.”

    The $1 million medallion
    Video
    Mrs. Hoque did not want her husband to buy a medallion. She wanted to use their savings to buy a house. They had their first child in 2008, and they planned to have more. They needed to leave the studio apartment, and she thought a home would be a safer investment.

    But Mr. Hoque could not shake the idea, especially after several friends bought medallions at the city’s February 2014 auction.

    One friend introduced him to a man called “Big Savas.” It was Mr. Konstantinides, a fleet owner who also had a brokerage and a lending company, Mega Funding.

    The call came a few weeks later. A medallion owner had died, and the family was selling for $1 million.

    Mr. Hoque said he later learned the $50,000 he paid up front was just for taxes. Mega eventually requested twice that amount for fees and a down payment, records show. Mr. Hoque said he maxed out credit cards and borrowed from a dozen friends and relatives.

    Fees and interest would bring the total repayment to more than $1.7 million, documents show. It was split into two loans, both issued by Mega with New York Commercial Bank. The loans made him pay $5,000 a month — most of the $6,400 he could earn as a medallion owner.

    Mohammed Hoque’s Medallion Loans Consumed Most of His Taxi Revenue
    After paying his two medallion loans and business costs, Mr. Hoque had about $1,400 left over each month to pay the rent on his studio apartment in Queens and cover his living expenses.

    Estimated monthly revenue $11,845

    Gas $1,500

    Income after expenses $1,400

    Vehicle maintenance $1,300

    Medallion loan 1 $4,114

    Insurance $1,200

    Car loan $650

    Credit card fees $400

    Medallion loan 2 $881

    Other work-related expenses $400

    By the time the deal closed in July 2014, Mr. Hoque had heard of a new company called Uber. He wondered if it would hurt the business, but nobody seemed to be worried.

    As Mr. Hoque drove to the Taxi and Limousine Commission’s downtown office for final approval of the purchase, he fantasized about becoming rich, buying a big house and bringing his siblings to America. After a commission official reviewed his application and loan records, he said he was ushered into the elegant “Taxi of Tomorrow” room. An official pointed a camera. Mr. Hoque smiled.

    “These are little cash cows running around the city spitting out money,” Mr. Murstein said, beaming in a navy suit and pink tie.

    He did not mention he was quietly leaving the business, a move that would benefit him when the market collapsed.

    By the time of the appearance, Medallion Financial had been cutting the number of medallion loans on its books for years, according to disclosures it filed with the Securities and Exchange Commission. Mr. Murstein later said the company started exiting the business and focusing on other ventures before 2010.

    Mr. Murstein declined numerous interview requests. He also declined to answer some written questions, including why he promoted medallions while exiting the business. In emails and through a spokesman, he acknowledged that Medallion Financial reduced down payments but said it rarely issued interest-only loans or charged borrowers for repaying loans too early.

    “Many times, we did not match what our competitors were willing to do and in retrospect, thankfully, we lost the business,” he wrote to The Times.

    Interviews with three former staffers, and a Times review of loan documents that were filed as part of lawsuits brought by Medallion Financial against borrowers, indicate the company issued many interest-only loans and routinely included a provision allowing it to charge borrowers for repaying loans too early.

    Other lenders also left the taxi industry or took precautions long before the market collapsed.

    The credit unions specializing in the industry kept making new loans. But between 2010 and 2014, they sold the loans to other financial institutions more often than in the previous five years, disclosure forms show. Progressive Credit Union, run by Mr. Familant, sold loans off almost twice as often, the forms show. By 2012, that credit union was selling the majority of the loans it issued.

    In a statement, Mr. Familant said the selling of loans was a standard banking practice that did not indicate a lack of confidence in the market.

    Several banks used something called a confession of judgment. It was an obscure document in which the borrower admitted defaulting on the loan — even before taking out any money at all — and authorized the bank to do whatever it wanted to collect.

    Larry Fisher was the medallion lending supervisor at Melrose Credit Union, one of the biggest lenders originally in the industry, from 2003 to 2016.
    Congress has banned that practice in consumer loans, but not in business loans, which is how lenders classified medallion deals. Many states have barred it in business loans, too, but New York is not among them.

    Even as some lenders quietly braced for the market to fall, prices kept rising, and profits kept growing.

    By 2014, many of the people who helped create the bubble had made millions of dollars and invested it elsewhere.

    Medallion Financial started focusing on lending to R.V. buyers and bought a professional lacrosse team and a Nascar team, painting the car to look like a taxi. Mr. Murstein and his father made more than $42 million between 2002 and 2014, disclosures show. In 2015, Ms. Minaj, the rap star, performed at his son’s bar mitzvah.

    The Melrose C.E.O., Alan Kaufman, had the highest base salary of any large state-chartered credit union leader in America in 2013 and 2015, records show. His medallion lending supervisor, Mr. Fisher, also made millions.

    It is harder to tell how much fleet owners and brokers made, but in recent years news articles have featured some of them with new boats and houses.

    Mr. Messados’s bank records, filed in a legal case, show that by 2013, he had more than $50 million in non-taxi assets, including three homes and a yacht.

    The bubble bursts

    At least eight drivers have committed suicide, including three medallion owners with overwhelming loans.
    The medallion bubble burst in late 2014. Uber and Lyft may have hastened the crisis, but virtually all of the hundreds of industry veterans interviewed for this article, including many lenders, said inflated prices and risky lending practices would have caused a collapse even if ride-hailing had never been invented.

    At the market’s height, medallion buyers were typically earning about $5,000 a month and paying about $4,500 to their loans, according to an analysis by The Times of city data and loan documents. Many owners could make their payments only by refinancing when medallion values increased, which was unsustainable, some loan officers said.

    City data shows that since Uber entered New York in 2011, yellow cab revenue has decreased by about 10 percent per cab, a significant bite for low-earning drivers but a small drop compared with medallion values, which initially rose and then fell by 90 percent.

    As values fell, borrowers asked for breaks. But many lenders went the opposite direction. They decided to leave the business and called in their loans.

    They used the confessions to get hundreds of judgments that would allow them to take money from bank accounts, court records show. Some tried to get borrowers to give up homes or a relative’s assets. Others seized medallions and quickly resold them for profit, while still charging the original borrowers fees and extra interest. Several drivers have alleged in court that their lenders ordered them to buy life insurance.

    Many lenders hired a debt collector, Anthony Medina, to seize medallions from borrowers who missed payments.

    The scars left on cabs after medallions were removed.

    Mr. Medina left notes telling borrowers they had to give the lender “relief” to get their medallions back. The notes, which were reviewed by The Times, said the seizure was “authorized by vehicle apprehension unit.” Some drivers said Mr. Medina suggested he was a police officer and made them meet him at a park at night and pay $550 extra in cash.

    One man, Jean Demosthenes, a 64-year-old Haitian immigrant who could not speak English, said in an interview in Haitian Creole that Mr. Medina cornered him in Midtown, displayed a gun and took his car.

    In an interview, Mr. Medina denied threatening anyone with a gun. He said he requested cash because drivers who had defaulted could not be trusted to write good checks. He said he met drivers at parks and referred to himself as the vehicle apprehension unit because he wanted to hide his identity out of fear he could be targeted by borrowers.

    “You’re taking words from people that are deadbeats and delinquent people. Of course, they don’t want to see me,” he said. “I’m not the bad guy. I’m just the messenger from the bank.”

    Some lenders, especially Signature Bank, have let borrowers out of their loans for one-time payments of about $250,000. But to get that money, drivers have had to find new loans. Mr. Greenbaum, a fleet owner, has provided many of those loans, sometimes at interest rates of up to 15 percent, loan documents and interviews showed.

    New York Commercial Bank said in its statement it also had modified some loans.

    Other drivers lost everything. Most of the more than 950 owners who declared bankruptcy had to forfeit their medallions. Records indicate many were bought by hedge funds hoping for prices to rise. For now, cabs sit unused.

    Jean Demosthenes said his medallion was repossessed by a man with a gun. The man denied that he was armed.

    Bhairavi Desai, founder of the Taxi Workers Alliance, which represents drivers and independent owners, has asked the city to bail out owners or refund auction purchasers. Others have urged the city to pressure banks to forgive loans or soften terms.

    After reviewing The Times’s findings, Deepak Gupta, a former top official at the United States Consumer Financial Protection Bureau, said the New York Attorney General’s Office should investigate lenders.

    Mr. Gupta also said the state should close the loophole that let lenders classify medallion deals as business loans, even though borrowers had to guarantee them with everything they owned. Consumer loans have far more disclosure rules and protections.

    “These practices were indisputably predatory and would be illegal if they were considered consumer loans, rather than business loans,” he said.

    Last year, amid eight known suicides of drivers, including three medallion owners with overwhelming loans, the city passed a temporary cap on ride-hailing cars, created a task force to study the industry and directed the city taxi commission to do its own analysis of the debt crisis.

    Earlier this year, the Council eliminated the committee overseeing the industry after its chairman, Councilman Rubén Díaz Sr. of the Bronx, said the Council was “controlled by the homosexual community.” The speaker, Mr. Johnson, said, “The vast majority of the legislative work that we have been looking at has already been completed.”

    In a statement, a council spokesman said the committee’s duties had been transferred to the Committee on Transportation. “The Council is working to do as much as it can legislatively to help all drivers,” the spokesman said.

    As of last week, no one had been appointed to the task force.

    On the last day of 2018, Mr. and Mrs. Hoque brought their third child home from the hospital.

    Mr. Hoque cleared space for the boy’s crib, pushing aside his plastic bags of T-shirts and the fan that cooled the studio. He looked around. He could not believe he was still living in the same room.

    His loan had quickly faltered. He could not make the payments and afford rent, and his medallion was seized. Records show he paid more than $12,000 to Mega, and he said he paid another $550 to Mr. Medina to get it back. He borrowed from friends, promising it would not happen again. Then it happened four more times, he said.

    Mr. Konstantinides, the broker, said in his statement that he met with Mr. Hoque many times and twice modified one of his loans in order to lower his monthly payments. He also said he gave Mr. Hoque extra time to make some payments.

    In all, between the initial fees, monthly payments and penalties after the seizures, Mr. Hoque had paid about $400,000 into the medallion by the beginning of this year.

    But he still owed $915,000 more, plus interest, and he did not know what to do. Bankruptcy would cost money, ruin his credit and remove his only income source. And it would mean a shameful end to years of hard work. He believed his only choice was to keep working and to keep paying.

    His cab was supposed to be his ticket to money and freedom, but instead it seemed like a prison cell. Every day, he got in before the sun rose and stayed until the sky began to darken. Mr. Hoque, now 48, tried not to think about home, about what he had given up and what he had dreamed about.

    “It’s an unhuman life,” he said. “I drive and drive and drive. But I don’t know what my destination is.”

    [Read Part 2 of The Times’s investigation: As Thousands of Taxi Drivers Were Trapped in Loans, Top Officials Counted the Money]

    Reporting was contributed by Emma G. Fitzsimmons, Suzanne Hillinger, Derek M. Norman, Elisha Brown, Lindsey Rogers Cook, Pierre-Antoine Louis and Sameen Amin. Doris Burke and Susan Beachy contributed research. Produced by Jeffrey Furticella and Meghan Louttit.

    Follow Brian M. Rosenthal on Twitter at @brianmrosenthal

    #USA #New_York #Taxi #Betrug #Ausbeutung

  • Do transportation network companies decrease or increase congestion ?
    https://advances.sciencemag.org/content/5/5/eaau2670

    Transportation network companies (TNCs) have grown rapidly in recent years. In 2016, TNCs were 15% of all intra-San Francisco vehicle trips, which is 12 times the number of taxi trips (1), while in New York in 2016, TNC ridership equaled that of yellow cab and doubled annually between 2014 and 2016 (2). TNCs are on-demand ride services where rides are arranged through a mobile app to connect the passenger with a driver, often a private individual driving their personal vehicle (3). The (...)

    #Lyft #Uber #urbanisme

  • Uber and Lyft increased traffic delays in San Francisco by 40 percent
    https://www.newscientist.com/article/2202011-uber-and-lyft-increased-traffic-delays-in-san-francisco-by-40-

    Uber and Lyft drivers are on strike to demand regulated fares and livable wages, in the lead-up to Uber’s initial public offering on the stock exchange on 10 May. Now there is some more bad news for these services : they haven’t lived up to claims of reducing traffic congestion. In San Francisco, rides through these two services increased traffic delays by 40 per cent over a six-year period, according to a new study. “We collected information on where and when exactly these trips occur and (...)

    #Lyft #Uber #urbanisme

  • Uber strike: Drivers around the world turn off app ahead of IPO - CNN
    https://www.cnn.com/2019/05/08/tech/uber-strike/index.html

    Uber drivers around the world are logging out of the company’s app to protest its compensation policies ahead of a blockbuster public offering.

    Strikes are scheduled for Wednesday in major US cities, as well as parts of the United Kingdom, Australia and South America. The message from participants: Uber needs to offer its drivers job security and higher wages.
    Uber is expected to go public Friday on the New York Stock Exchange. The debut could raise roughly $10 billion for the ride-hailing company.
    Uber and its rival Lyft (LYFT) have long argued their drivers are independent contractors. That status means workers in many countries don’t get the same rights as employees.

    “Drivers are at the heart of our service — we can’t succeed without them,” Uber said in a statement.

    “Whether it’s more consistent earnings, stronger insurance protections or fully-funded four-year degrees for drivers or their families, we’ll continue working to improve the experience for and with drivers,” it added.
    The strike action kicked off in London at 7 a.m. local time and will last until 4 p.m., according to James Farrar, a spokesperson for the Independent Workers Union of Great Britain, which advocates for people working in the gig economy.

    Uber and Lyft drivers strike for better pay

    The union wants UK drivers and customers to avoid the Uber app during the protest. It expects thousands of drivers to participate, based on the numbers that have joined its private drivers’ branch, Farrar said.

    One driver on strike in London, Muhumed Ali, said he wants Uber to boost fares and take a smaller cut of sales.

    “The drivers are the ones who are running the business,” said Ali, who’s been driving for Uber for four years and says it’s his primary source of income. “We are collecting pennies.”

    Backing from politicians in Britain’s Labour Party, including opposition leader Jeremy Corbyn, could help encourage customers to stay away, according to Farrar.

    Uber cannot be allowed to get away with huge payouts for their CEOs while refusing to pay drivers a decent wage and respect their rights at work. Stand with these workers on strike today, across the UK and the world, asking you not to use Uber between 7am and 4pm. #UberShutDown
    — Jeremy Corbyn (@jeremycorbyn) May 8, 2019

    Other cities are expected to join the protests. Drivers are pushing for better treatment and improved conditions, but the specific demands vary by organizing group.

    Uber drivers protest outside the Uber offices in London.
    In San Diego and Los Angeles, drivers are slated to cease working for 24 hours. In Atlanta, workers plan to log off for 12 hours. And in New York City, a two-hour strike was planned for the morning commute.
    In addition to powering off their apps, drivers will hold rallies held in strategic locations such as outside local Uber offices.
    In the United Kingdom, protests are scheduled to take place outside Uber offices in London, Birmingham, Nottingham and Glasgow.

    Independent Workers Union of Great Britain
    https://iwgb.org.uk

    #Uber #Streik #London #USA

  • When a Town Takes Uber Instead of Public Transit - CityLab
    https://www.citylab.com/transportation/2019/04/innisfil-transit-ride-hailing-bus-public-transportation-uber/588154

    Ihr Gemeinde hat keine öffentliches Busnetz, sie brauchen aber eins? Kein Problem, Uber macht das. Sofort, unkompliziert, flexibel, alle sind froh. Dann kommt der Erfolg. Und dann wird es teuer. So geschehen in einer Gemeinde in Kanada.

    Will das jemand in Deutschland?

    Das Rechenexempel zeigt, dass es egal ist, wie der private vermittler oder Beförderer heißt. Öffenliche System werden mit zunehmendem Erfolg immer billiger, private immer teurer. Ergo sind private Anbieter gut für Zwischenlösungen bis zum Aufbau eines funktionsfähigen öffentlichen Nahverkehrssystems. Wer sie beauftragt, muss den Zeitpunkt des Wechsels zur öffentlichen Lösung von Anfang an planen, sonst schlägt die Kostenfalle zu.

    Noch dümmer ist es, wenn öffentliche Angebote privatisiert werden. Dann wird es auch bei eingeschänktem Service sofort teuer.

    LAURA BLISS APR 29, 2019 - Innisfil, Ontario, decided to partially subsidize ride-hailing trips rather than pay for a public bus system. It worked so well that now they have to raise fares and cap rides.

    In 2017, the growing Toronto exurb of Innisfil, Ontario, became one of the first towns in the world to subsidize Uber rides in lieu of a traditional bus. Riders could pay a flat fare of just $3-$5 to travel to community hubs in the backseat of a car, or get $5 off regular fares to other destinations in and around town.

    People loved it. By the end of the Uber program’s first full year of service, they were taking 8,000 trips a month. Riders like 20-year-old Holley Hudson, who works for daycare programs at YMCAs around the area, relied on it heavily, since she doesn’t drive. To get to the college course practicums she was taking when the service launched, “I used Ubers on a Wednesday, Thursday, Friday basis,” she said.

    Now “Innisfil Transit” is changing its structure. As of April 1, flat fares for the city-brokered Ubers rose by $1. Trip discounts dropped to $4, and a 30-ride monthly cap was implemented. Town leaders say this will allow Innisfil to continue to cover costs.

    But Hudson and others see the changes as harmful, and a strange way of declaring success. As cities around the world turn to Uber, Lyft, and other apps as a quick fix for mobility service gaps, what’s now happening in Innisfil may be a good example of the risks.

    Innisfil’s journey with Uber began in 2015. Thickening traffic and an expanding population of seniors, students, and carless adults all signaled the need for some sort of shared mobility option in town. Just 45 minutes north of Toronto, the once-agricultural hamlet has recently ballooned in population, growing 17 percent from 2006 to 2016 to 37,000 residents.

    But as local leaders studied options for a fixed-route bus service, the cost/benefit analysis didn’t seem to add up. One bus to serve a projected 17,000 annual riders would cost $270,000 in Canadian dollars for the first year of service, or about $16 per passenger. And designing the system would be a drawn-out process.

    So instead, Innisfil did as so many people do when they’re in a hurry and facing a cumbersome bus ride: It hailed an Uber instead.

    “Rather than place a bus on the road to serve just a few residents, we’re moving ahead with a better service that can transport people from all across our town to wherever they need to go,” Gord Wauchope, then the mayor, said at the time.

    That logic is informing ride-hailing partnerships in dozens of communities across North America, all testing the notion that companies like Uber and Lyft can supplement or substitute for traditional service in some fashion. In certain cases, ride-hailing is replacing bus routes wholesale. In others, it’s responding to 911 calls, paratransit needs, and commuters traveling the last leg of a transit trip. Innisfil’s program was unique, in that the city branded the Uber partnership not as a complement to public transit, but as transit itself in a town without existing bus lines.

    Adoption of Innisfil Transit was fast and steady: The program racked up 86,000 rides in 2018. Nearly 70 percent of respondents to a city survey said that they were satisfied or more than satisfied with the new service—figures that would be the envy of any traditional public transit agency.

    But that popularity meant costs grew for the town. So now residents will have to cover more of their own trips. “It’s the growing ridership and popularity of the service,” town planner Paul Pentikainen said. “It’s been a great success, but there are also challenges with working with a budget.”

    “I would never get on a bus in Toronto and hear the driver say, ‘Sorry, but you’ve hit your cap.’”
    Normally, though, raising transit fares when ridership is growing is backwards logic. While passenger fares almost never cover the full cost of service, more passengers riding fixed-route buses and trains should shrink the per-capita public subsidy, at least until additional routes are added. On a well-designed mass transit system, the more people using it, the “cheaper” it gets.

    But the opposite is happening in Innisfil. Only so many passengers can fit in the backseat of an Uber, and the ride-hailing company, not the town, is pocketing most of the revenue. With per-capita costs essentially fixed, the town is forced to hike rates and cap trips as adoption grows. But this can create a perverse incentive: Fare bumps and ridership drops tend to go hand-in-hand on traditional systems.

    Cities are changing fast. Keep up with the CityLab Daily newsletter.
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    The trip cap in particular bothers Hudson, who continues to rely on the Uber service as her primary mode of transportation. She expects that she’ll burn through her allotted 30 trips in a couple of weeks. The city has an application for residents to qualify for an extra 20 trips per month, but Hudson doesn’t plan to file. She’s opposed to the idea on principle.

    “I would never get on a bus in Toronto and hear the driver say, ‘Sorry, but you’ve hit your cap,’” Hudson said. “Uber was supposed to be our bus.”

    Hudson emailed town officials to complain about the new trip limit. In a reply, a city councillor named Donna Orsatti wrote that the cap had been implemented because “the system was being abused by those in the youth bracket who were using Uber at $3 to go to Starbucks (as an example), purchase a drink, then go back to school or meet their friends.”

    That sounded oddly judgmental to Hudson’s ears. And it’s not how public transit is supposed to work: “We shouldn’t be criticized for where we’re going,” she said.

    In an email to CityLab, Orsatti explained her intentions. The cap was never meant to restrict residents, but rather “to ensure it is available to all residents to allow them transportation to essential service areas,” she wrote. And Pentikainen acknowledged that, while the rate structure might work differently from traditional transit, Uber still makes more sense for Innisfil. The city’s subsidy for the program grew from $150,000 in 2017 to about $640,000 in 2018, and for 2019, it has allocated another $900,000. On a per trip basis, Pentikainen said, it’s still a lot cheaper than the projected bus costs, and more equitable.

    “It’s a service that the whole town has access to, versus providing a service that only those who can walk to bus stops can,” he said.

    Pentikainen says that—despite Orsatti’s email—no city report called out Starbucks-toting teens for “abusing” the system. But he did note that the cap was partly designed to discourage short-distance trips that can be accomplished on foot or bike for most people.

    According to an Uber spokesperson, the ride-hailing company also advised the city to implement the cap as a way to control costs.

    Uber has touted the success of the Innisfil program as it invites other cities to adopt its model. Part of the attraction is that ridership is sinking on public transit systems across North America, as on-demand transportation apps has boomed. City decision-makers sometimes opt for Lyft and Uber as a way to lure travelers back, or to cut costs on low-performing routes. In other cases, the rise of ride-hailing is used as a bad-faith justification for further slashing bus service.

    Success has been mixed for transit agency/ride-hailing marriages. Many programs have seen weak ridership, and cities can find themselves hamstrung in their ability to make adjustments, since ride-hailing companies are famously guarded about sharing trip data. Some, including Pinellas County, Florida, which subsidizes certain Uber trips, have heard complaints that municipal discounts don’t go very far as the on-demand transportation giant has raised its own fares.

    Now that both Uber and Lyft have filed initial public offerings, industry analysts predict that the costs of these services—which have been heavily subsidized by their billions in venture capital backing—will creep steadily upwards as public investors expect returns. And city governments and commuters who come to rely on ride-hailing as a social service won’t have much control.

    In Innisfil, Uber fares have held steady, according to Pentikainen. And the company has shared certain data upon request. As the city grows and ride-hailing services evolve, it will continue to evaluate the best way to mobilize its residents, Pentikainen said. Eventually, Innisfil might be interested in adopting Uber’s latest transit-like offering, which is called Uber Bus. Similar to the microtransit startup Via and its failed predecessors Chariot and Bridj, riders are scooped up in larger vans at designated locations on a schedule that is determined based on demand.

    And if Uber ever raised fares to the point where riders could no longer rationalize the costs, the city would go back to the drawing board. In some parts of town, Pentikainen said, they might even consider a regular fixed-route bus. “There are a range of ways to consider efficiencies from the town’s perspective,” he said. “All along, this was a starting point. We have to react along the way.”

    Still, the idea of further changes made in reaction to the app’s contingencies worries Hudson. That doesn’t sound like very reliable service for her, nor for the older people and students she sees riding in Ubers en route to school and doctor’s appointments. If Innisfil makes further tweaks, Hudson says she might consider getting her license in order to avoid the stress. But she fears more for what could happen to those who can’t.

    “Uber was supposed to be our public transit,” she said. “Now we have to think about whether we can take an Uber or not.”

    #Kanada #ÖPNV #Bus #Taxi #Uber #disruption #Rekommunalisierung

  • How #blockchain could prevent companies like Facebook from manipulating users
    https://hackernoon.com/how-blockchain-could-prevent-companies-like-facebook-from-manipulating-u

    Technology products have changed the way we live, eat, interact, and commute. We shop through Amazon instead of going to physical stores. We order Uber or Lyft ride before leaving our home instead of trying our luck to get a taxi on the street. We use GrubHub to order delivery online. We make new friends through Tinder. We use Airbnb to find a place to stay when traveling. We search on Google when we have questions to ask.What changes our lives the most is the way we interact with one another. People often open their social apps like Facebook, Twitter, or WeChat first thing in the morning before getting out of beds. We often see people on their phones during social events. It is amazing to learn that more than 2.3 billions of people are using Facebook on a daily basis in 2019. Yet, (...)

    #artificial-intelligence #ai-on-blockchain #ai #decentralization

  • Ahead of IPO, Uber’s Losing Less—but Growing Less Too | WIRED
    https://www.wired.com/story/ubers-losing-less-moneybut-growing-less-too

    THE YEAR OF the gig economy IPO continues, as Uber on Thursday made public its first bit of official paperwork with the Securities and Exchange Commission, a sign that the firm is preparing to list its shares on the New York Stock Exchange. The filing shows a sprawling transportation business with operations in 63 countries and 700 cities, providing 5.2 billion rides in 2018—roughly one for every person in Europe and Asia.

    Uber pulled in $11.3 billion in revenue in 2018, a 42 percent jump over the year before. And though its operating losses are still heavy—$3 billion in 2018—the company has slowed the bleeding, at least a bit, bringing operating losses down from $4.1 billion in 2017. Uber had 91 million active users at the end of 2018, 23 million more than a year earlier. Revenue growth, however, fell by half in 2018. This is due in part to the increasing might of Lyft, which is now snapping up users faster than its larger rival, but also because of tightening competition in meal delivery, where Uber’s big success story, Eats, is no longer growing as quickly.

    Still, the company is reportedly expected to go public at a valuation of $90 billion to $100 billion, which would make it the largest US tech IPO in the past half-decade. (Facebook went public in 2012 at a $104 billion valuation.)

    Uber is ride-hail; Uber is e-scooters and ebikes; Uber is a burgeoning delivery business; Uber is trucking and logistics software; Uber wants to build a fully functional self-driving car. And Uber only wants to get bigger: “Today, Uber accounts for less than 1 percent of all miles driven globally,” CEO Dara Khosrowshahi wrote in a letter included in the filing. “Because we are not even 1 percent done with our work, we will operate with an eye toward the future.”

    But the filing also depicts a company struggling to recover from its messy past. The company said it lost “hundreds of thousands” of customers in early 2017, when its drivers continued to operate in airports during protests against the Trump administration’s immigration restrictions on visitors from Muslim countries; that led to the #DeleteUber campaign. The filing notes reams of bad press stemming from accusations of sexual harassment, discrimination, and a then-toxic company culture. It also references, obliquely, investigations into its Greyball tool, software that attempted to circumvent regulation in cities that did not want the company operating on its roads. These events prompted, if not presaged, today’s tech-lash. And from a business standpoint, the company says that history has made it more difficult for Uber to retain users, stay on the right side of important city and federal regulators, and to avoid writing very large checks to lawyers, who are representing Uber in lawsuits and investigations around the world.

    Now, as it prepares to go public, Uber faces critical questions. What happens if the company fails to achieve profitability … ever? Uber believes it will need to invest in finding new users, be they riders, drivers, restaurants, or shippers—and use incentives, discounts, and promotions to do it. (More than $3 billion, over a third of total operating costs, went to sales and marketing last year.) It will need to pour money into new markets and operations. It will need to keep finding new employees and drivers. It will have to write checks for expensive “flying taxi” and autonomous vehicle research along the way. (The company acknowledges in the filing that it expects a competitor such as Waymo, General Motors/Cruise, Tesla, Apple, or Zoox to “develop such technologies before us.”)

    “Many of our efforts to generate revenue are new and unproven, and any failure to adequately increase revenue or contain the related costs could prevent us from attaining or increasing profitability,” the company writes in its filing.

    What happens if regulators decide Uber’s drivers are no longer independent contractors, but employees entitled to benefits and more intense oversight? Today, Uber faces litigation and driver protests challenging its core business model all over the globe. The filing notes that more than 60,000 drivers have entered into (or expressed interest in entering into) arbitration over employee misclassification, which the company writes “could result in significant costs to us.” The company also expects to spend significant money recruiting and retaining drivers in the years ahead.

    #Uber #disruption #Börse #Spekulation #IPO

  • Automation and the Sharing Economy
    https://hackernoon.com/automation-and-the-sharing-economy-de19658e45c?source=rss----3a8144eabfe

    Human production is in the midst of a sea-change. The growth in global connectivity, coupled with advancements in automation is giving rise to a new economy, the sharing economy.Sharing #economics is not a new phenomena. In fact, the modern sharing economies catalyzed by #uber and Lyft, often touted as innovative, are a derivation of the most primitive economic structure: trade and barter. The Uber and Lyft S-1s have shed light on the vulnerabilities in the economics that underpin their business model. This has brought about discussion with respect to the long-term viability of these businesses, and at a cursory evaluation of the financials, it makes sense that people would draw that conclusion. The problem with that analysis, however, is that it takes a nearsighted view of a long term (...)

    #cryptocurrency #sharing-economy #hackernoon-top-story