'We Were Wiped Out': New Yorkers Preyed on Chicago Cabbies

Source: New York Times

‘We Were Wiped Out’: New Yorkers Preyed on Chicago Cabbies

By Brian M. Rosenthal
Photographs by Alyssa Schukar
Oct. 4, 2019

In the fall of 2006, Chicago held an auction to sell taxi medallions, the permits that let people own and operate cabs. Hundreds of bids poured in, including some offering to pay much more than expected. The city raised millions of dollars. Officials declared the sale a success.

But there was something strange about the auction: None of the winning bidders lived in Chicago.

Almost all of them lived hundreds of miles away, in New York.

Over the next decade, New York taxi industry leaders — fleet owners, brokers and financiers — steadily seized control of Chicago’s medallion market and squeezed it for huge profits. Using tactics honed in New York, they made millions of dollars, but they ultimately helped to leave the industry in tatters and the lives of immigrant drivers on the edge of ruin.

New Yorkers used a similar playbook in several cities across the United States: They inflated medallion prices, provided high-risk loans to buyers and collected interest and fees before the bubbles burst and the markets collapsed. Medallion prices rose sevenfold in some places, soaring to $700,000 in Boston, $550,000 in Philadelphia, $400,000 in Miami and $250,000 in San Francisco.

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Read more: https://www.nytimes.com/2019/10/04/nyregion/taxi-medallions-chicago.html