SFMTA Didn’t Rip Off Taxi Medallion Lender

The San Francisco Municipal Transportation Agency has not reneged on its deal with a credit union to give loans to taxi drivers so they can buy medallions, the pieces of tin that make it possible to drive a taxi, a San Francisco Superior Court jury ruled on Monday afternoon.

12-member jury verdict after less than a full day of deliberation dismisses a multi-year quest by the credit union to seek millions of dollars in compensation for locket loans that lost value once Uber and Lyft have decimated the taxi industry. Dozens of lockets were seized, but no one wanted to buy one at the purchase price of $ 250,000. The last medallion sold in April 2016.

The credit union granted loans to more than 700 taxi drivers for $ 250,000 medallions as of 2010. But soon after, Uber and Lyft upstarts caused the market for taxis and drivers to collapse. struggled to make their payments, with scores in default.

The credit union sued the SFMTA in March 2018, alleging that the agency had promised to redeem the medallions if the program collapsed and blaming it for letting Uber and Lyft kill the taxi market. (Rideshare companies are regulated by the state, not by individual cities.) The case originally called for $ 28 million in damages plus $ 125 million to redeem all the loans.

The three-week trial was presided over by Judge Harold Kahn.

The jury ruled that both parties had honored the contract. They rejected the credit union’s claims that the SFMTA was forced to reduce the price of the locket loans, that the SFMTA did not make enough efforts to resell the seized lockets, and that the SFMTA should have officially declared the end of the medallion sales program.

“This case was still about a bank bailout, outright,” City Attorney Dennis Herrera said in a statement. “The City and the fund have a contract. The City did not break this contract, so taxpayers should not have been forced to bail out this bank. “

The credit union did not immediately return requests for comment.

The city’s taxi drivers, who followed the case eagerly, were disappointed with the outcome. Both sides – and the judge – made it clear that no matter what, the taxi drivers would not end up with any compensation.

“If the credit union had been successful, not a penny of that money would have gone to the drivers,” Herrera said, adding that he now hoped that “the focus could return to significant improvements in the taxi market. “.

But drivers were hoping for validation of their long-standing grievances with the city, which began selling the medallions for a quarter of a million dollars in 2010 after decades in which coveted permits were available for free, but only after drivers have spent years on a waiting list.

The drivers, who are largely working-class immigrants, enthusiastically purchased medallions, seeing them as a ticket to owning their own small business and fulfilling the American dream. Now, many believe the city and the SFMTA made millions on their $ 250,000 loans, then compounded the injustice by allowing Uber and Lyft to thrive without regulation.

Many drivers say they desperately want relief from the overwhelming burden of their medallion loans. Before the pandemic, some drivers even worked for Uber in their spare time because driving a cab did not make enough money to pay the payments.

Carolyn Said is a writer for the San Francisco Chronicle. Email: [email protected] Twitter: @csaid

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