NY Attorney General Demands NYC Pay $810M For Taxi Crisis

NEW YORK CITY — Attorney General Letitia James wants New York City to pay $810 million for inflating the value of yellow taxi medallions and burdening drivers with massive debts, she announced Thursday.

The Attorney General's office accuses the city and the Taxi and Limousine Commission of inflating the price of thousands of medallions — which drivers must purchase to legally drive a yellow cab — and collecting the profit for about 14 years, from 2004 to 2017.

"These taxi medallions were marketed as a pathway to the American Dream, but instead became a trapdoor of despair," James said. “Government should be a source of justice, not a vehicle for fraudulent practices."

James will serve her notice of claim to the City Comptroller's office Thursday and file suit in 30 days if the full amount isn't paid, according to a press release.

Bill de Blasio spokesperson Freddi Goldstein championed the mayor's work with drivers and thrust blame on former Mayor Michael Bloomberg's administration for laying the groundwork for inflation.

“We have spent the last six years putting money back into the pockets of drivers," said Goldstein. "This crisis has been ours to solve – working tirelessly to clean up the carelessness and greed of others."

Added Comptroller Scott Stringer, “My office takes these issues very seriously and will vigorously review this claim on its merits.”

The Attorney General's office argues inflation — prices increased more than 240 percent in a decade, from $283,300 in 2004 to $965,000 in 2014 — was spurred by false promises and a problematic medallion auction process.

New York City and the TLC promoted medallion ownership "as a solid investment with steady growth," and promised drivers the medallions were could be used as collateral for loans, the Attorney General said.

TLC further inflated costs by setting up a bid minimum for an auctioning process that allowed brokers and companies to collude on pricing, argued James.

New York City allegedly raked in the $810 million by selling medallions and collecting a 5 percent tax on transfers, investigators said.

Said James, "We are taking action to ensure New York’s hard-working taxi drivers can be made whole again and are repaid the hundreds of millions the city unlawfully pocketed.”