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With pandemic, NYC taxi drivers' livelihoods hang in the balance

No fare! NYC cabbies face uncertain future
No fare! NYC cabbies face uncertain future 08:51

We may tell our children in years to come that there was a time, especially if it was during rush hour on a rainy day, when you couldn't get a cab in New York City for love or money.  These days, the streets are mostly empty. It's estimated that 90% of the taxi business has dried up.

That's part of the reason why the city, with help from the National Guard, started a program that pays cab drivers to deliver food to low-income housebound residents.

Mouhamadou Aliyu, a yellow cab driver of many years standing, gets up before dawn to participate. He knows there's a health risk: "But this is my home, and yellow is what I do," he explained. "Right now, there is a pandemic. Our people, they are suffering. The city call us.  We are answering the call."

Yellow cab driver Mouhamadou Aliyu. CBS News

Drivers earn $53 a route. Each route entails about six deliveries, and it means waiting in line for hours to get fully loaded; lugging boxes of food up into crowded apartment complexes; and then cleaning up for the next run.

"It's very hard. It's very tough. Very challenging," Aliyu said.

Nine hours, most of it waiting; two delivery runs = $106 for a day's work. Not even close to the amount he needs to pay even a fraction of his monthly expenses.  

"But, we're still hopeful," Aliyu told "Sunday Morning" special contributor Ted Koppel. "We're New Yorkers. We don't give up!"

As a young immigrant from West Africa back in 1994, Aliyu saw Manhattan through rose-colored glasses: "I came here with nothing, nothing at all. This was my dream. As a yellow cab driver, to hold a medallion is like being on top of my game. This is where I want to be. This is the American dream."

In 2003, he became an American citizen. By 2004, Aliyu had learned that you don't get rich just driving a cab; to make money, he was told, you need to own the taxi – and to own it, you need a special license: a medallion.

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The city paid for ads promoting the deal as essentially risk-free; and it was New York City that has made literally billions of dollars selling these medallions at auction. When there are more buyers than medallions, the price goes up. That, in theory, is where even an immigrant cab driver could get rich: "So I said, 'Why not?' But, in order for me to place a bid to go for the medallion, I have to raise $20,000. But I have only $7,000. So, I apply for credit card. I get approved. I call them, I say, 'Can I use it for anything I want?' They say, 'Yes, it's your money. You can do whatever you want with it.'"

Koppel said, "Then you had $13,000 that you had on your two credit cards. $20,000 cash down, on a $331,000 bid."

"Yes, that would be a loan. And you have to pay for the car, gas, maintenance, all that. But still, life was good. Even I would say life was great."

Within about a year Aliyu's medallion had appreciated more than $100,000, and remarkably, the value kept rising. "Lucky me, I was able to buy a house here in the Bronx, a three-family house," He said. "So, things was good. And then, moving forward, the medallion value was going up. In 2013 the city auctioned medallion at $1,350,000."

Seven years ago – in theory, on paper – Aliyu was a millionaire.

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"The only reason that it was worth over a million dollars was that there was some other immigrant who could be taken advantage of to pay that amount," said New York Times reporter Brian Rosenthal. "And not really even pay that amount, but be trapped in a loan that would shackle them in debt for the rest of their lives."

Rosenthal won a Pulitzer Prize for his series exposing the taxi medallion scam. As he explained in the Times' documentary series "The Weekly," those medallions were money-makers … just not for the drivers.

"There was the city which sold the medallions, the brokers who collected commissions, and the bankers who wrote the loans and sold some of them for profit," he said. "And what we found in our reporting was that the value of the medallion went from $200,000 to over a million dollars, when the revenue that it had to bring in did not change at all.n Eventually, you realize that this wasn't by accident. Many insiders knew that the whole thing was a house of cards. 

"The loans were never stable," Rosenthal said, "they were never sustainable, and they were always going to be a burden that was unpayable after this bubble popped. And that's what happened."

Last summer, the New York City Council held a hearing on what was called the owner-driver crisis.  Mouhamadou Aliyu was one of the witnesses:

"Every single day, every single hour, I think about taking my own life," he told city officials. "I think about suicide. The only thing that stops me is my four kids. If I do so, what's going to happen to them? I'm supposed to be a millionaire today, and I'm proud of it. And you guys are trying to take that away from me. It's not acceptable. I'm calling on you: Please! Please! Have mercy on us. Help us."

Koppel said of Aliyu's testimony, "He speaks rather plaintively of his status as a millionaire: I'm a millionaire. He's never gonna see that day again, is he?"

"No, he's not," Rosenthal said. "I mean, he deserves it. He works very hard. I've met hundreds of these cab drivers, and they all work extremely hard."

Many of the drivers are convinced that ride-share companies – like Lyft and Uber – ruined their business. Even without them, though, said Rosenthal, the medallion bubble had to burst. 

Six months ago, said Aliyu, the medallion was worth less than $100,000. What he still owes on that medallion, however, is more than $600,000. The chances that he'll ever be able to pay that off? Slim and none. 

One slender ray of sunshine: New York State's Attorney General is preparing to sue the City of New York to the tune of more than $800 million for misleading medallion owners. It could take years, and even that sum wouldn't make the drivers whole again.

And then, of course, there's the pandemic. Well over 50 cab drivers have died from the virus since March. Most drivers these days are staying home; the few available fares just aren't worth the health risk.

Aliyu said, "There is no more sleep. There is no night. At night we chat on the WhatsApp group, we're so worried. If nothing is done, when this pandemic will be over, the yellow cab industry will be over, too, will be finished."

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Story produced by Deirdre Cohen. Editor: Steven Tyler.

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