MARY LOUISE KELLY, HOST:
A taxi medallion used to be a great investment. More than a dozen cities sold these permits to operate cabs. And medallion values rose to hundreds of thousands of dollars - even more than a million dollars in New York City. Then along came Lyft and Uber, and the market for medallions melted down. KQED's Sam Harnett reports on what that is doing to cab drivers in San Francisco.
SAM HARNETT, BYLINE: Yana Kiziryan's son looks just like his grandfather Edward.
YANA KIZIRYAN: Hey, Eddy.
HARNETT: What's his name?
HARNETT: Hey, Eddy.
KIZIRYAN: Edward after my dad.
HARNETT: Yana's family's Armenian. In 1991, they came to the U.S. as refugees from Azerbaijan.
KIZIRYAN: We got really lucky that the U.S. took us in.
HARNETT: Yana's Dad Edward drove taxi. He loved it and dreamed of owning a medallion. These little tin permits used to be awarded on seniority. But to try to balance the transportation budget after the 2008 financial crisis, San Francisco started selling them for $250,000. That was still a good deal with a medallion. Drivers could make between five and seven grand a month. Edward got a loan and bought one.
KIZIRYAN: He thought if anything ever happens to me - if I were to die, the family would be set. It was like his retirement plan.
HARNETT: But then Lyft and Uber flooded the streets with cars. They operated without medallions or a cap on how many vehicles could be on the road. That drove down prices for rides and earnings for all kinds of drivers. Edward's income plummeted. His blood pressure began to go up, and he started gaining weight.
KIZIRYAN: He became increasingly just restless and nervous. And there were months where they didn't have quite enough to pay all of their bills, and, like, I would help them out sometimes.
HARNETT: Two years ago, the family was out of town, and Edward stayed home to drive. He went to the airport, like he did every day.
KIZIRYAN: You know, his friends at the airport right away noticed something was wrong because he said, oh, I'm not feeling well. I'm going to go home. And they looked at him. And I guess he was like green or something. And they were like, no, you're going to the hospital.
HARNETT: Edward's aorta had torn, and he soon passed away. He was just 59 years old. The market for taxi medallions in San Francisco is frozen. Not one has been bought or sold for over two years. The city recently held a meeting with drivers. Almost all the drivers want the same thing - for the city to buy back the medallions - drivers like Inder Jitghotra and Magdi Yousef.
INDER JITGHOTRA: Me, my brother, we bought six medallions in the beginning. We are under the water. Some family members want to file for bankruptcy. We have no other option.
MAGDI YOUSEF: I already suffer two heart attacks. I feel like I'm dying slowly. This medallion is killing me slowly.
HARNETT: Around 700 drivers bought medallions, making the city about $63 million. Over 150 of these drivers have now defaulted on these toxic assets. Kate Toran manages the taxi program for the city.
KATE TORAN: If Kate Toran, director of taxis and accessible services, had a magic wand and could say this can all go away, of course - who wouldn't want to do that?
HARNETT: The city is considering a few changes to thaw the medallion market. But unlike New York City, it hasn't put a cap on the number of Lyfts and Ubers on the road. The city is also not talking about buying back the medallions, which Toran estimates would cost $160 million.
TORAN: That's not on the list of recommendations at this point. I think that's unlikely.
HARNETT: After Edward's death, Yana Kiziryan's family was still plagued by the medallion. No one wanted to buy it from them. So they defaulted on their loan and took a massive hit on their credit. Yana wants the city to do something for the other drivers. Many are still out there on the road just trying to break even on the little pieces of tin they invested their lives in. For NPR News, I'm Sam Harnett.
(SOUNDBITE OF DEXTER'S "CHARDONNAY")
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