RT @brianmrosenthal: NEW: Over the past year, a spate of suicides has revealed a financial crisis in New York's cab industry. Officials have blamed Uber, but much of the crisis can be traced to a handful of taxi tycoons. Here’s the real story, based on 10 months of reporting: https://t.co/v6HSWNO4EI
Look at Evgeny Freidman's puckered face.
Those tiny pursed lips look just like a sphincter.
A shitty, up-bidding sphincter.
A sphincter-lipped up-bidder.
A fraudulent sphincter face.
Probably learned the tactic on ebay among all the stool gobblers that live there.
If you would have read the article, you would have seen that they pushed applicants to lie about income, and preyed on non-English speaking citizens who didn’t understand the kind of deals they were signing.
Put that on top of the fact that this is an asset that had gained value for over 8 decades before technical disruption and it created a perfect storm.
Yes, they were a shitty investment retrospectively, but there were also some bad actors at play. On top of the market fallout with UBER and Lyft. A medallion could make or break a family in New York, there was nothing inherently shitty about investing in one in 2010.
The incentives were designed to artificially inflate the price of the medallions. The local govt, for many years, pumped the price in part by deceiving the buyers about the true demand at auctions, and constantly raising the required minimum bid. They also used medallions to solve local govt debt problems since NYC govt can just invent more of these things out of thin air. Then they encouraged wild financing mechanisms that looked a lot like what happened in the housing market from 2004 to 2008. Right around the time of the housing collapse, I had heard investment firms were buying up these medallions as investment vehicles whose supply was well controlled.
I guess I’m fine with letting the cabbies eat their losses so long as the bankers who lent them money don’t get bailed out like they did in 2008. It should be taken at face value at this point when the govt and the banks get together to convince you to borrow money for an “ever rising” investment, you should run the other way as fast as possible. Of course, the govt officials should never be held responsible. All they were doing was taking care of their political problems on the backs of duped idiots. If you don’t like it, quit being an idiot. Responsible govt is too much to ask. I imagine that’s what was taught at Trump U...assuming something was taught.
So let’s say you’re 17 and filling out an employment setup form, and the HR person gets to ethnicity and starts pressing you on your background. You finally mention that you think you’re great grandmas mother was 1/2 Native American. The HR person is thrilled, and tells you to check the “appropriate” box.
Now, you’ve committed a form of fraud, but it was at the instruction of someone who knows more than you about this business, and as far as you know is there to help you.
A scenario where your BANK LENDER tells you to put a different number down “because you’ll want to include your future taxi revenue” or something along those lines is extremely easy to imagine, especially for a citizen who may not have taken out a huge loan in their life.
These people were looking for opportunity, thought they were doing what was best for their family, and got screwed over. Try to have some empathy for how someone might end up in this situation.
I’m not saying they’re not ultimately responsible, they are. 100%. Being conned isn’t a get out of jail free pass, just look at the tragic MLM stories that get shared on Reddit.
But to say they weren’t conned is dishonest, IMO.
Yeah, fuck them for trying to survive in this hellscape, where the upper echalon bleeds the last dimes out of the population so they can buy a 2'nd bigger yacht where they can dock their first tinier yacht. This is obviously the way the world is supposed to work.
JkidAllergic to socio-economic bullshit4 weeks ago
They got these loans decades ago before uber ever existed.
Buying into a state-backed monopoly and then being upset when the monopoly starts to collapse is absurd. The medallion system only existed under the implicit threat of govt violence against anyone who ignored it and competed against medallion monopolyists. Taxi drivers werent conned, they're just upset that NYC declined to violently shut down competition.
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.
More than you know. I was thinking as how Nixon did so Much for America while GOP dud their best to help demonise him while lionising Reagan. It's pretty crazy - so 45 was probably picked because he can always blame incompetence or criminality while he does necessary global trade (in their eyes) things with china for corporations or re: mil-industrial complex in Mid East .
It's very unsurprising how close 45 hews to what an establishment democrat would have done just the media outlets spin it differently for their respective markets.
The media was very tough on him until he appointed Bolton . Then they praised him for bombing Syria etc. It's pretty sick really. Anyone who believes other countries like U.K. Etc are any different is deluded.
...and while these immigrants' negative perception of African-Americans caused them to drive passed Black cab hailers in what could be seen as an ode of solidarity to the racial hierarchy; it was this same White supremacy that turned around and saddled them with debt and chauffeured them into a self-imposed yellow cab of slavery.
It's not all of them but to those that look down on the underclass of the USA to beseech "butter biscuits" and admiration from the oppressor class, here's a big middle finger to you. The devil doesn't have allies, if he hasn't used and abused you it's not because you have his favor, it's because he hasn't gotten around to it yet.
Foreign drivers come to the USA with no preconceived racial issues as they mostly come from homogeneous countries that have no racial issues.
The reality is that taxi drivers need to hustle. They figure out the best locations and passengers through experience.
In my old hometown of Washington, DC, a huge chunk of taxi drivers are Ethiopian (they have a little taxi collective that helps them get financing/etc.) Maybe they're self-loathing racists against their own skin color... or maybe they just want the best fares.
I hardly think that foreign, ethnic drivers refusing to service black fares was a deliberate "ode of solidarity to racial hierarchy."
A brown taxi driver from Bangladesh likely has no desire to ally himself with some white overclass.
Racism it may be, and problematic and in need of repair as it is - it's far more likely that the answer is simply one of economics.
Like it or not - British rule of India also rested on them hijscking their odious caste system based on "whiteness"
It's doubtful that taxi immigrants esp Bangladeshi benefited from they but it permeates the regions thinking. Their upper caste elites are just as bad as ours . The MBA bubble was part due to them monkey see monkey do of our elites. There is no value in an MBA. Similarly MEIN KAMPF of a certain Adolfo Hitlerio famed Italian business genius was bestseller FOR A WHOLE FUVJING YEAR. Because "he was a great manager, like Steve jobs"
Their elites are as bad as ours & they have kept their underclass as down and challenged as possible
But it's not just economics because African-Americans can pay fares just like everyone else, it's not as if a trip from Point A to Point B makes more money if the passenger is a White American. Fact is, a lot of immigrants especially from countries with anti-Blackness in their culture e.g. South Asians come here and try their best to assimilate into White society because they associate Whiteness with money and power.
So they exude sycophant behaviors e.g. reinforcing the racial hierarchy in hopes to gain favor from the dominant White society...we see it with all types of immigrants from Africa, to East Asia, and etc. Some of these immigrant groups got accepted into White society like Irish and Italians and now they reap the full benefits of the system.
This is why terms like "People of Color" and "Minorities" are losing favor with African-Americans because it lumps African-Americans in with immigrants who come here and exhibit anti-Black behaviors while kissing up to the dominant society. It's good when you see them get stepped on by the dominant society like we have for hundreds of years...
>...it's not as if a trip from Point A to Point B makes more money if the passenger is a White American.
It does if white people tip more/at all.
You can examine the socioeconomic reasons for the lack of tipping if you like, but ultimately if an easily identifiable group gets a reputation (deserved or not) for being poor tippers, you run into some difficult game theory problems.
This same issue extends into other tipped service areas as well, such as waiters and bartenders.
I'm pretty sure that was massive industry regulations (medallions/unions) and the general populace hated using cabs due to resultant behavior over their market monopoly. Rideshares are a much better option its just that simple.
The article deals with this head on. Average annual earnings per driver has dropped 10% from peak. Medallion price is down 90%. This is mostly a story about a. credit bubble and predatory lenders and brokers. It is only secondarily about new sources of competition.
In NYC the medallions for taxis have been restricted to roughly 15,000 since about WWII. Uber is a private chauffeur company so isn't counted under that limit. The price of medallions has since cratered.
Zerohedge is melodramatic as always.
A medallion is still worth hundreds of thousands of dollars and the prices are basically what they were in the 2000s. It's a long way from the record setting highs but medallions are still extremely valuable.
And if the record sales are basically bullshit publicity stunt numbers to begin with, the prices have fallen even less.
Yeah. I get that it isn't counted under that limit. What I'm saying is, is that there is a larger supply of taxi like services, so the 15,000 medallions aren't going to be worth as much. People aren't going to be using real taxi's as much, so taxi drivers make less money. Then since taxi's don't make as much people are less willing to pay for the medallion. This would make the price drop.
I live on Manhattan and Uber is a dream come true. Why? Because I could travel 60 blocks for $4-6, which is basically same price as the nasty Subway. The same trip would cost me about $30-50 using a Taxi.
So yeah, people are using Taxis less because all the investor money is heavily subsidizing my $40 rides.
But this is not going to continue. Uber/etc prices will become normal at some point and what we end up having is a choice between opening up an app and waiting, or simply hailing a taxi immediately. Taxis have a huge convenience advantage.
And these days, Taxi companies have very similar apps to Uber that anyone who wants to use an app to hail a ride can do so...
As prices converge, Taxi business will pick up and so will the medallion prices. That's my theory anyway.
They end up encouraging people to not take public transport and drivers to be on the road so ends up being worse for congestion.
Interesting. On the other hand, the availability of rideshare has encouraged me to not buy a car or motorcycle, which doesn't decrease idle time, but does decrease car use. On the other hand, when I do use rideshare it obviously does cut in to public transit use (because that would be my only alternative when I'm not biking somewhere), but mostly when service is poor. My last ride helped get me to a poorly served area (train to a train to a bus to a half mile walk). The few rides before that got me home late at night.
It really just sounds like a lot of people made bad decisions to take out huge loans to invest in medallions. The city should’ve been more careful when promoting the permits, but you’d expect anybody taking out a gigantic loan to buy an asset like that to understand the risk they’re taking. Maybe I skimmed through it too quickly, but I didn’t see anything particularly bad. Just a bunch of people speculating on taxi medallions with money they didn’t have going broke when it didn’t work.
What an insane interpretation of the situation. The true crooks are the government and their over reliance of medallions. How anyone can see this as a indictment of capitalism is beyond me. In a "capitalist system" the only loan would have been for buying a damn car.
This is a story about corrupt government, not predatory capitalism. By artificially restricting the supply of taxis, municipalities made a little bit of money for themselves, ultimately paid for by consumers in the form of much higher fares, inability to even get a taxi at times, and the generally horrible experience of taking a taxi created by lack of free business competition. The rise of ride sharing apps is capitalism finding a way to save us from that whole mess. It’s just a bit of a shame that some of the people left holding the bag after the whole rotten system collapsed were average joes.
Edit: ouch, we’ve got some big fans of regulatory capture out there. ;-)
>This is a story about corrupt government, not predatory capitalism.
Why would government make a situation of super high profits and opportunity for some taxi company? Because it got influenced and bribed by that company. "Government" is just a tool and you have to look at who profits.
But" muh Frankfurt school Dogma. " but "muh myopia" etc
These people tell socialists to "go to Russia" wtf
Isn't it easier for libertarian man children to go to Somalia rather than me travel back in time to defect a perfect communist Russia that never existed?
Well a bit of both. Corrupt government in keeping supply artificially small, but predatory lending and debt slavery is a huge issue all across America (especially for academic debt, which is guaranteed). Let's bring back much looser bankruptcy laws (thanks Bush II for [nixing](https://en.wikipedia.org/wiki/Bankruptcy_Abuse_Prevention_and_Consumer_Protection_Act) them) and put the onus back on lenders to lend toward more sustainable economic situations, rather than guarantee debt and inflate prices and force people into wage garnishment.
Exactly. That's the entire point. If bankruptcy rules were lax like they used to be, putting the onus on lenders to lend to those who would be more likely to *actually pay back the debt in a sustainable way* then yes, STEM majors would have a much easier time getting loans.
Do you see the effect this would have on schools? The programs they offer? And the price of tuition?
Absolutely. With the current situation, where the government makes the loans, there are no grade requirements, progress requirements, and so on. Could you imagine the world where you have to earn next semester's loan by your grades in this one?
You're going to be crucified for running against the anti-capitalist grain, but you're entirely right.
Public driving services should be regulated to require insurance and prohibit dangerous drivers, etc - but this is the perfect story of those regulations being enacted poorly and resulting in unintended consequences.
Regardless of how this sub wants to spin this, it has nothing to do with capitalism at all - and everything to do with a good old boys network feeding off of and supporting an exploitative government regulating scheme.
Eventually, sheer market pressures caused a blowout.
You can't shit on consumers forever. Eventually somebody comes along and offers a better service.
Regulatory capture tends to suppress the best functioning of the private sector by favoring one interest group within the regulated industry. In this case city governments like NYC protected medallion owners from competition by artificially limiting the number of medallions available. That protection from competition was so valuable, in fact, that the city found it could charge a million dollars just for permission to operate a cab.
Exactly. The government created a rent seeking balloon. If the government was regulating the number of madalions, it should have also kept control of the price. There isn't enough hours in the day for a driver to pay off a nearly $2 million loan. These ride share guys aren't perfect either, but at least they're not forcing a driver into an insane debit just for the privilege to work!
They don't have to, but people looking to do it as a primary income source are likely also looking to get a car for it. Their terms and conditions are not great. [https://www.reddit.com/r/uberdrivers/comments/4srs2j/is\_it\_worth\_it\_to\_lease\_a\_carfinance\_through\_uber/](https://www.reddit.com/r/uberdrivers/comments/4srs2j/is_it_worth_it_to_lease_a_carfinance_through_uber/)
Yeah, that's a bad deal, but understandable. If they provide the car, you have to get more expensive commercial insurance. And you can't get around it by using a normal lease, because that contract would forbid using the car for commercial use. The only way it works that I can see is getting a good used Crown Victoria!
Unlicensed cabs were dangerous before cell phones and GPS tracking. The taxi medallion system was adopted because "gypsy cabs" were price gouging, and occasionally robbing and kidnapping people.
Reasonable regulation became regulatory capture when the supply wasn't allowed to grow to match demand. Part of the motivation was concern about traffic congestion, but the price of a taxi medallion reached 1.3 million dollars, that's an obvious mismatch between supply and demand.
*note- I used an offensive term because "gypsy cab" is a term people can google, but the Rom are real people, it isn't actually right to refer to a criminal practice using an ethnic slur.
It got that way because individuals were hoarding the medallions and leveraging their value to buy more medallions. The city was not charging 1.3 million, that's just what they ended up selling at auctions for.
Seems fair. I can’t believe anybody who experienced life before Lyft and Uber would want to go back to expensive, undependable, untrustworthy taxi cab rides. Remember not being able to get a cab when it rained or when an event finished? Getting cheated by licensed cabbies who took you for a long, out of your way ride or claimed that the meter was broken? Thank god the ride-sharing competition has forced even yellow cabs to step up their game.
Uber and Lyft are no more capitalist than the previous model. The predation the article refers to is purely capitalist in nature and the solution isn't more capitalism (as you claim). Again, may pure, unfettered market forces be the uninsured, un-inspected and predatory chariot on which you ride.
Uber may be fucking over its workers, but it's not "a million dollars of debt in one day"-level fucking over its workers. Uber drivers who don't feel like it's worth it can just stop. Taxi drivers are locked into the system. I agree Uber should improve its system but I don't think it's even remotely comparable to what happened with medallions.
I'm not saying you're wrong. I agree. I just want to point out that Uber is bleeding money and that's why their stock is doing poorly.
When will they do well? When they don't need employees driving.
Their current prices do not reflect the actual costs and that's with underpaying their workers.
I find the idea that those companies can transition to driverless cars to be a long shot. Right now, they are an app. That's it. They manage software, not physical infrastructure. They depend on their contractors to use their own vehicles and insurance.
So, they are depending on other companies to make progress in driverless tech, then they need laws to change so that they can use that tech, they would need to purchase and roll out and maintain fleets of vehicles, which includes insurance and every vehicle would need cameras, so lots of data storage or people will be pissing, shitting, destroying, fucking, and littering their vehicles without recourse. That's an entirely different business model than their current one and much, much more logistically difficult and expensive to maintain. Good luck to them, but I don't see it happening.
I'm expecting that the rental car agencies to jump in as soon as there are driverless cars. Their relationships with the manufacturers and leasing probably puts them into a better position to absorb the huge capital costs of having a fleet of driverless cars available.
That's a good point. It does seem like those companies are in a much better position to succeed. Maybe Uber/Lyft are just trying to stay afloat as market leaders in ride hailing software to eventually be purchased by them for their brand recognition, but I'm just talking out of my ass on that.
Well, if I had money to play in the stock market, I'd be looking to snap up stocks of AVIS if I heard rumors of them in talks with Google or Apple.
We are ALL talking out of our asses most of the time -- you recognizing that is just wisdom!
>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.
This was Michael Cohen's line of work, wasn't it? Once again, rich scoundrels are taking advantage of average working people. There should be a law against this practice. It is an unfair business practice that victimizes workers for the benefit of scoundrels.
That’s not the problem, the problem is we tell every capitalism is the answer, “survival of the fittest” and all that bs but as soon as a company had a more convenient/cheaper alternative for the consumer, we need to save the taxi drivers and sign new legislation to cause more traffic in NY. Why not just buy back the medallions and let them start their life over?
Do taxis also try and rip you off anywhere you go? Have a cab pull up and try and charge you $30 for 8 blocks. Not to mention they drive like douches. There’s no reason to support the taxis they state should’ve bought the medallions back if they really cared.
Having an artificial cap on taxis controlled by medallions is just asking for price inflation and manipulation. If the regulating body doesn't recognize this inevitability then they have no business regulating anything.
Absolutely, financial laws should assume the parties are complete morons. We should do what we can to protect those who are intelligence challenged.
(Although even in spite of that assumption idiots will still screw themselves)
Very much this because a written contract ignores the context in which it was signed. How many times have any of us been sitting there after a few hours of negotiation for a new car and just say fuck it I’m tired and hungry it’s probably fine? It assumes we are unchanging perfect logic machines instead of flaky semi functional emotional powder kegs.
Contracts are complicated, so often people rely upon others with more expertise to explain it to them. It requires trust. Unfortunately if you trust the wrong person, they will not explain it to you in realistic terms, and this is what happened.