The Weekly season 1 episode 2 recap: The Myth of the Medallion

The Weekly returns with a difficult story about the financial struggles of New York City taxi drivers. Issuing a slight trigger warning for the discussion suicide both in this article and this episode.

This episode of The Weekly dives into a corrupt system that has left New York City taxi drivers in crushing debt, leading to a high rate of suicides. The episode is lead by New York Times metro investigative reporter Brian Rosenthal with some additional reporting from transit reporter Emma Fitzsimmons.

The episode covers four articles from Rosenthal that were published in May of this year (you can find them here, here, here and here). Fitzsimmons, as part of her transit beat, has been covering the large amounts of suicides by taxi drivers. As the episode shows, the suicides and financial strife are all tied to a medallion, sold by the city of New York, that allows taxi drivers to drive their own cabs as an individual business owner.

The idea was that these medallions were expensive (requiring drivers to take out loans), but would be worth it when they sold the medallions later for a higher price for money they could now retire off of. Problem is, people like Mohammad Hossain, who became a focus of this episode, were screwed in the process.

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Following Rosenthal as he reports this story, we see how Hossain bid for a medallion during a 2014 auction for the price of $853,786—which is a crazy price. Go look up what kind of a house you can buy for that kind of money. And that’s a big catch, no bank would loan you the money for that kind of a house, especially when you only bring in around $22,000 per year. But in this situation, the bank did issues the loans and issued the loans while (at times, at least) asking for no money down.

Hossain was able to pull together a $100,000 down payment, but the other $700k+ still had to be paid back in 3 years. (Again, $22,000 per year salary. That’s just not possible.) Rosenthal talks about his research and how he found that, of the 150 drivers who got medallions the same day as Hossain, 40% filed for bankruptcy. (Of the 6,000 individual medallion owners in NYC, 900 have filed for bankruptcy in the last three years.)

When asked why he hasn’t done the same, Hossain breaks down, talking about how many drivers he’s known who have killed themselves over this and saying he can’t give up, for the sake of his family. Again, these medallions were supposed to be investments that could be sold for retirement money. But, as a group of angry drivers say in the episode, no one wants to buy them.

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Rosenthal’s reporting then goes into how people were taking advantage of the drivers (many of whom were immigrants who didn’t speak English well). Rosenthal sits down with one bankruptcy lawyer who meets with and represents taxi owners explains that, technically, the banks were required to explain the contracts to the drivers (not even the part where drivers signed away their right to have a lawyer look over the paperwork).

According to studies, the medallions can’t carry a down more than $400,000. Taxi companies were intentionally driving up prices and no one cared.

Ok, my favorite part of these episodes is always the reporter confronting whatever people did the wrongdoing. Rosenthal meets with two: Larry Fisher and Matthew Daus.

Fisher was the chief loan officer at Melrose Credit Union during the height of all this. MCU made $80 mil PER YEAR in interest and fees during that time. Fisher quickly passes blame, saying too much is put on the lenders. He equates it to the 2008 housing crises (as one broker later puts it frankly, “it’s capitalism”: buy now, pay later). He does regret that people got hurt because of it, but doesn’t think there was anything that should have been done differently.

The same idea is had by Matthew Daus, the former commissioner of the Taxi and Limousine Commission—the group who was supposed to be looking out for the drivers, but who also made money off of medallion sales.

Rosenthal pressures Daus, asking why Daus didn’t find it more suspicious that banks were offering loans with 0% down. He passes blame completely, saying there was nothing he could have done about it because he can’t control the terms of deals. He also easily blames Uber’s entrance to the market as the cause of the crisis, saying the government didn’t regulate them properly.

As Rosenthal winds down the episode, he notes that Uber (and other ride share apps) didn’t cause this. It was inevitable. The price of medallions (and the amount needed to pay back the loans) kept going up while taxi salaries stayed the same. This was inevitable without someone stepping in to help the drivers.

Rosenthal attends city council vote where they voted on a bill…that was only to start studying the problem of taxi driver suicide. And that bill only said they’d form a study group. Six months later, still no steps toward any sort of study group.

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After the Time published their articles in May, more action started toward remedying the problem…sort of. New York City is investigating the brokers, New York state is looking into the lenders and the federal government is reviewing regulations. Meanwhile, Hossain still owes the bank $700,000—with no hope in sight.

It’s a rough episode of The Weekly, especially seeing how tough this manipulation has been on the mostly minority taxi community in New York City. The Weekly again does a great job depicting the amount of time and work that goes into the big stories (including a montage of Rosenthal making call after call and continuously getting rebuffed).

What do you hope to see The Weekly cover? Let us know that and all of your thoughts on The Weekly in the comments!

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