Ride-hailing companies provided consumers with options for getting around, but the advent of Uber and Lyft also wrought financial havoc on New York City’s taxicab industry.
Amid a litany of bankruptcies, foreclosures and eviction notices, at least five drivers have committed suicide since December.
Among the dead was Yu Mein Chow, 56, who had taken out a loan seven years ago to purchase a $700,000 medallion that allowed him to operate a cab in the city. Another driver shot himself in February outside Manhattan’s City Hall after posting a message on social media faulting politicians for allowing the unchecked competition.
“Those medallions were worth more than a million before Uber came in,” said Alison Griswold, a reporter for Quartz who covers gig economy jobs like ride-sharing drivers. “A lot of drivers feel animosity toward the city,” she told CBSN. “They feel like they had this contract, where the value of the taxi medallion appreciated and so a lot of drivers who had sunk their life savings into that felt like that was their key into retirement.”
Seven of the medallions reportedly sold for under $200,000 in January.
The city’s cab industry, reliant on the market value of those once-coveted tax medallion, has been turned on its head by the proliferation of Uber, Lyft and other ride-sharing services. The competition has driven down demand for yellow cabs and significantly cut the value of the medallions.
For decades, no more than 13,000 taxis operated in New York, according to The New York Times. Now there are some 100,000, roughly two-thirds affiliated with Uber.
“There’s a lot of blame, actually, to go around,” said Harry Campbell, author of “The Rideshare Guide,” a book offering advice on driving for a ride-hailing company. “We’re seeing too much of a good thing can definitely be a bad thing,” he added of the lack of regulation that has allowed the city to be flooded with for-hire cars.
Of course, Uber drivers also don’t have it easy. Treated as independent contractors and lacking traditional benefits or employment protections, Uber drivers earn less than $10 an hour after expenses, according to a study by the Economic Policy Institute.
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