A New York Times investigation revealed what really burst the taxi medallion bubble. The recent deaths of many New York City taxi drivers by suicide has drawn attention to their debt burdens and financial struggles in a swiftly changing economy. While city officials blamed competition from transportation apps like Uber and Lyft for drivers’ misfortune, the main problem was that powerful industry leaders intentionally drove up the price of taxi medallions over the last decade, reaping massive profits while artificially inflating a bubble that eventually burst. In particular, the Taxi and Limousine Commission, charged with regulating the industry, instead became its biggest “cheerleader.” The industry’s practice of pushing drivers into extortionate loans generated huge profits for bankers, investors, fleet owners, and debt collectors—everyone but the drivers. At the market’s height, independent medallion buyers, who are also drivers, were typically earning about $5,000 a month, all but $500 of which was paid right back to their loans. “I don’t think I could concoct a more predatory scheme if I tried,” said Roger Bertling of Harvard Law School’s Predatory Lending and Consumer Protection Clinic. “This was modern-day indentured servitude.” Ultimately, the scheme depleted mostly immigrant families of their savings, loaded drivers with debt they could never repay, and caused nearly a thousand independent medallion owners to file for bankruptcy, while “thousands more are barely hanging on.”
Ford Motor Co. announced yesterday that it will lay off thousands of workers this summer, with 800 layoffs by the end of June and 7,000 worldwide by the end of August. Last year, 1,500 Ford workers took voluntary buyouts, while the CEO Jim Hackett received a 6% raise, bringing his total compensation to nearly $18 million per year. Besides Ford, General Motors announced earlier this year that it would lay off 4,000 white collar workers and eliminate 1,700 hourly positions in an Ohio plant.
President Trump complained to Fox News this week that the E-Verify system to ensure that employees are legally authorized to work is too onerous for employers. The Trump Organization only announced in January that it planned to begin using E-Verify on its properties, after news reports revealed that its businesses have relied on undocumented workers for years. Trump’s sympathy for employers belies the true motivation behind his administration’s cruel immigration policies, wrote Eric Levitz in New York Magazine. “Simply put, an immigration agenda that allows companies to hire undocumented workers — but makes such workers as vulnerable and disempowered as possible — is an agenda that maximizes the incentive for employers to hire undocumented laborers over native-born Americans,” Levitz wrote. “After all, an undocumented worker who is too afraid of ICE to report workplace safety violations or wage theft can be exploited even more ruthlessly than one who is not.”
Postmates, an app-based delivery service, eliminated its minimum fee per job for delivery workers. Until last weekend, Postmates guaranteed its workers at least $4 per delivery, but now pay rates are calculated based on the number of pickups, dropoffs, minutes, and miles during a worker’s shift and vary based on city. Postmates said the reason for the change in its fee structure was so that workers “always know exactly what you’re earning.” But some workers are asking for the minimum guarantee back and a pay structure that’s actually transparent.