New York asked for US $ 810m for inflated taxi licenses

Prosecutor Letitia James criticizes New York City for selling the licenses between 2004 and 2017 through an auction system that raised their prices to unjustified levels.

From 2011, the Municipality maintained this mechanism, while an internal study had shown, according to the prosecutor, that the price of the licenses was higher than their true economic value.

Between 2004 and 2014, the average price of a license at auction rose from 283,300 to 965,000 US dollars, according to figures released Thursday by the services of Letitia James.

It then collapsed, under the effect of the massive arrival of VTC platforms (passenger vehicles with driver), mainly Uber and Lyft.

According to a survey by New York Times, more than 950 licensed taxi drivers have declared personal bankruptcy since 2016.

Today, a license can be negotiated with a taxi driver for less than US $ 200,000.

A medallion of this type identifies the 13,587 taxis authorized to transport passengers in New York. This number is determined by a law which also authorizes the purchase and sale.

Photo : Reuters / Mike Segar

The sum claimed from the City by Attorney James, namely US $ 810 million, corresponds to the revenue the Municipality receives from the sale of licenses and the resale tax.

According to the prosecutor, New York notably set up a floor price during auctions, but also allowed brokers and major players in the sector, who had dozens, or even hundreds of licenses, to agree on prices.

The New York Taxi and VTC regulatory agency even reportedly told taxi drivers that the license could be used as collateral for a loan, to encourage them to bid.

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The investigation of New York Times showed that many taxi drivers had taken out loans of several hundred thousand dollars, when the income from their activity did not allow them to consider repaying them.

In the letter sent to the City on Thursday, the prosecutor gives the Municipality 30 days to pay the requested sum, failing which she will sue her.

Asked by AFP, New York City Hall did not immediately follow up.

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