Rusting medaillions

With a procedural vote last Wednesday, the city Taxi & Limousine Commission enacted rules for its $65 million fund to write down the loans of taxi medallion owner-drivers who’ve spent years struggling under the weight of a rapidly devaluating asset for which they paid handsomely.

The program is worth trying but, thanks to various constraints, it looks unlikely to do what’s necessary to throw a lifeline to thousands of drivers drowning in deepest debt. Perhaps that’s why, despite having been in operation for months, the TLC has so far brokered restructurings for only 90 drivers. While another 1,000 are at some stage of the process, it is unclear how many will ultimately sign the dotted line.

The New York Taxi Workers’ Alliance, which calls the TLC plan an unworkable sham, wants the city itself to back outstanding loans in exchange for a restructuring of the debt down to a maximum of $145,000 with a top monthly payment of $800. If a medallion holder defaults, taxpayers would pick up the tab.

We give the TWA, whose work we generally appreciate, points for trying.

But lenders, who need to accept the terms for any restructuring, would only consider such a model with a full and legally bulletproof city guarantee for covering defaulted debt; the city understandably won’t offer that without clarity on the total cost. Nobody knows for certain what backstopping every loan would mean, but we’re guessing it would yield very high default rates, with many cabbies rushing to wash their hands of an industry turned upside down by a flood of Uber and Lyfts, then by COVID.

The better bet is to do whatever possible to make the current plan work, renegotiating terms and providing additional funding if and when some drivers find themselves underwater even after a restructuring. Meanwhile, if lawmakers like Sen. Chuck Schumer and Rep. Ritchie Torres really believe a debt guarantee is the best solution — as they’ve both maintained — they should find the cash in Washington. The feds have deeper pockets than we do.