After KQED aired a radio story on Sept. 27 about the suffering of taxi drivers, the San Francisco City Attorney’s Office requested this statement be added to the story: “The City and the Credit Union have a contract. The City has not broken that contract, so taxpayers should not be forced to bail out this bank because of the investment choices the bank made.”
The city attorney’s office did not respond to a request for comment on any questions related to the taxi drivers and their debt.
While the credit union is now on the hook for deciding to partner with the city to help taxi drivers, those drivers are now on the hook for buying into what was a money-making scheme for the city.
Cashing in on medallions
Taxi medallions used to be free, awarded by seniority. Drivers would wait on a list for over 20 years for their chance to get one. And for decades, taxi medallions were a sure bet, a way to have a stable, middle-class life. Drivers could earn $30 or $40 an hour after expenses. They could also make passive income by leasing out their medallion to other drivers. It was the de facto cab driver retirement plan.
But then, in 2010, to make money after the financial crisis, then-mayor Gavin Newsom decided to start selling medallions, and some 700 taxi-driving families bought them.
When Ed Lee became mayor in 2011, he embraced Uber and Lyft. Medallion values plummeted along with the earnings of taxi drivers. They couldn’t make enough money on the road to pay their loans, and suddenly there were no buyers for medallions. Those who had bought into the system were stuck with the debt.
Mayor London Breed and her administration haven’t taken steps to alleviate debts for these drivers. Over the years, neither Newsom nor Breed has responded to multiple requests for comment on the issue.
I have been following the plight of San Francisco taxi drivers in the medallion system for almost a decade. Many drivers shackled to the medallions have lost their life savings, their homes and their health. Several have died from stress-related illnesses, some in their cars while waiting for a fare.
Mounting debt
Two years ago, before the pandemic, I went to the San Francisco International Airport taxi lot to talk with drivers. There were several hundred cabs parked in a line, waiting for passengers. It could take over three hours to get a single fare.
For most of the drivers I talked with, like Ali Asghar, the dream had always been to get a medallion. At the lot that day, Asghar told me he threw a big party when he got the chance to buy a medallion.
“I was happy. My family was happy. We celebrated," Asghar said. "I feel that was the happiest day in my life. I hug my wife. I hug my kids.”
When I spoke with Asghar two years ago, he said he was already on the edge. At night he would wake up in a cold sweat, go in to stare at his kids and wonder what kind of future he could give them now.
When the pandemic began, taxi work completely dried up. Asghar, like many other drivers, had to start working for the app companies that destroyed their livelihoods. He’s driving for Lyft and Uber, along with DoorDash and Amazon.
If drivers default on their loans, they will lose everything they already paid into the medallion, often their entire life savings. Drivers like Ali Alikhani do whatever they can to make payments.
Two years ago, Alikhani told me he was using his Social Security to pay for his medallion. He had already paid $165,000 into the loan. “This job destroyed my life,” he told me.
When I contacted Alikhani recently, he told me he’s still in the same exact situation. He’s sending about three-quarters of his Social Security check every month to the medallion loan. That leaves just a few hundred dollars a month for him to live on.
Alikhani said he’s lucky he owns his home. Namdev Sharma lost his house to the medallion. Sharma told me that when he had to sell his house, he sat his kids down.
“I told them I was losing this house," Sharma said. "They did not know there was corruption in America.”
The drivers have always told me that city officials assured them that the medallion was a good investment.
Ejaz Ahmed, who drove a cab for over 30 years, said, “All the SFMTA [San Francisco Municipal Transportation Agency] stuff was convincing to the average drivers that the medallion price will remain the same.” He said the message from City Hall was that drivers would always be able to sell their medallion and get out whenever they wanted to.
The decade of economic devastation is putting a physical strain on cab drivers. Over the years I have interviewed drivers who have not only lost their homes, but who are living in homeless shelters. I interviewed the children of a driver who had died in his cab. Two years ago, in a dark cab at the airport taxi lot, Abdelellah Alhimsi showed me his ruined teeth.
Alhimsi was so stressed he had broken his night guard and didn’t have money to buy a new one. Without the guard he started cracking his teeth. He’d broken a half dozen teeth by the time I talked to him.
I don't know what happened to Alhimsi since I spoke with him two years ago. He hasn’t responded to calls or emails. The other cab drivers I am in touch with don't know what happened to him, either.
There is a general feeling among the drivers I've interviewed over the years: that the city probably would have tried harder to do something if they were white, not immigrants and people of color.
Last shred of hope
I recently got back in touch with Namdev Sharma. He’s been working at the United States Postal Service to pay his medallion loan. Like many of these drivers, he's still doing whatever he can with the hope of not losing all the money he paid into the loan.
“I invested my whole life savings money,” he said. “It’s almost $90,000 I paid to the bank. I don’t want to lose that money.”
Sharma and a group of taxi drivers used to go to City Hall every week for nearly three years to plead for help. But the community of drivers fighting for justice is now breaking down under the weight of the debt. Drivers are taking other jobs. Some are leaving the country, and some are disappearing altogether.
Sharma said drivers see the current lawsuit as one final chance. “I have like a 10% hope, not a 90%. They will refund our money or not,” Sharma said.
There is no clear way drivers would see any refund from this case. The taxi drivers are not a party to the lawsuit. If the credit union wins, it may decide to forgive the amount drivers still owe on the loans. A ruling on the lawsuit is expected in mid-October.
Drivers who are more savvy about the legal system hope that the lawsuit could give them an opening. Because of this suit, there is now public testimony of events, like former city officials talking about how Uber and Lyft posed a threat to the medallion system and how something should have been done. Drivers hope those testimonies and a favorable ruling by the judge could open the door for them to take further legal action against the city.
