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Bad loans have killed the taxi industry long before Uber and Lyft: report

The financial hardships of the taxi market in the city may not be entirely the fault of the traveling companies – the industry was a house of cards, waiting for the collapse, according to a report.

A Sunday New York Times investigation The guilt of industry leaders who artificially inflated taxi medallions has increased fivefold over 12 years, creating a highly profitable credit market based on questionable lending practices similar to those at the center of the housing accident.

In 2013, a taxi medallion generated $ 1.3 million But last year, the market slumped and medallions sold for less than $ 250,000.

While much of the depreciation is due to the flood of Uber and Lyft riders, the report said they were exploitative loans, of which hundreds were pure interest rate drivers, who were often immigrants and their terms were unclear, with high monthly costs.

The report says that some borrowing costs have become so high that there are not enough hours left to travel in one week to make a profit and eventually have all their monthly fees paid to pay off the loans.

When the market bottomed out in 201

4, Progressive Credit Union chief Robert Familan earned nearly $ 35 million with his medal loan -profit company.

Employees were encouraged to award shaky loans with rewards and travel, the report said.

The lenders denied any wrongdoing and the city's former taxi and limousine commissioner said it was not the commission But Meera Joshi told the newspaper, "Many people have just watched it happen."

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