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Credit Union Holding Taxi Medallion Loans Shutters, Leaving Drivers in Limbo

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For years, taxi drivers in New York City, many of them immigrants, have taken out loans against their taxi medallions, the treasured city documents that allow drivers to legally operate a taxicab. A taxi medallion was viewed as safe and secure collateral for those loans.

Since 2013, however, and the arrival of app-based ride-hailing services like Uber and Lyft, the value of those medallions has plummeted and along with it the fate of the biggest holder of medallion loans, Queens-based Melrose Credit Union. Paired with a history of mismanagement, the downturn shoved Melrose to the brink of collapse, and in February of last year, it was officially placed into NCUA stewardship, the federal agency that oversees credit unions.

In a little-noticed statement last month, the NCUA announced that it had “made the decision to liquidate Melrose and discontinue its operations after determining the credit union was insolvent and had no prospect for restoring viable operations.” Many of Melrose’s assets and liabilities were transferred to the Teachers Federal Credit Union (TFCU). But an NCUA spokesman John Fairbanks confirmed that the medallion loans had not. Instead, they have remained with the federal government for servicing and collection.

That has left the future of perhaps as much as $833 million in loans in doubt as well as that of the often desperate drivers who borrowed against their medallions.

“The NCUA’s Asset Management and Assistance Center is managing the portfolio of taxi-medallion-secured loans, which includes servicing,” Fairbanks wrote in an email to Documented. He said that Melrose members had been notified about the liquidation, but declined to discuss whether the terms of any loans had changed, saying the information was confidential.

The exact number and total value of outstanding medallion-backed loans isn’t clear. Documents filed by Melrose with the NCUA in June listed 2,682 “non-real estate secured commercial loans,” which Fairbanks confirmed is the designation that taxi medallion-secured loans would fall under. Given Melrose’s history in the taxi medallion business, it’s likely most if not all of these are medallion-backed loans. Melrose listed their total value at just over $833 million, down from $1.24 billion in June of last year.

Whether the medallions are now worth more or less than the debt isn’t clear. But many drivers took out loans in the six figures. The drop in medallion values could mean that many drivers are under water on the loans—meaning they owe more than the medallions are worth. Many in the taxi industry say such financial distress contributed to a rash of driver suicides over the summer.

The New York City Council recently passed measures limiting the proliferation of app-based for-hire vehicles, but the changes might only slow the medallions’ devaluation, not stop it. Drivers have also complained that Melrose became less receptive to renegotiation after it fell under the stewardship of the federal government.

Standing outside a City Council committee on for-hire vehicles hearing on Tuesday, Bhairavi Desai, the president of the New York Taxi Workers Alliance — a union that represents 18,000 drivers — said that “once [Melrose] was taken over by the government, it became more aggressive. It was uncooperative with the drivers.” Desai said she didn’t yet know whether the NCUA directly would be more open to negotiation.

That Council committee hearing included the introductions of multiple bills related to taxi drivers. These include Int 1069-2018, which calls for the Taxi and Limousine Commission (TLC), the body that regulates the industry in New York City, to “study the problem of medallion owners with excessive debt due to the decline in medallion value” and then “determine appropriate actions to address such problem;” and Int 1081-2018, which would require the TLC to “establish one or more driver assistance centers to provide services and information to drivers, including financial counseling, mental health counseling and referrals to non-profit organizations for additional assistance.”

If these bills were to become law, they could task the TLC with assisting drivers and acting as a de facto middleman between taxi drivers drowning in debt and the federal government. In an email, a spokeswoman for the TLC said it was “too early” to gauge the impact that the Melrose dissolution might have on drivers or on the agency.

Manhattan Council member Mark Levine, who introduced the TLC study bill and co-founded and ran a community credit union before his election, said that NCUA itself was “partly culpable” for Melrose’s travails by allowing such a concentration of medallion-backed debt to be held in one place. “In order to sell these loans to a responsible lender, [NCUA] are going to have to give that institution the flexibility to refinance them, which could be a lifesaver for the drivers but also could be good for the institution long-term,” Levine said.

Levine said he hadn’t yet spoken directly to anyone at NCUA about their plans, but that it was his understanding that TFCU had refused to accept the medallion-backed loans. The TFCU did not return requests for comment; a voicemail message left with the legal department at Melrose was not answered.

“That’s only going to tighten the vise on drivers, and the fact that [TFCU] refused these assets as part of their assumption of the failed Melrose Credit Union should make us worried that these loans are going to be stuck with NCUA indefinitely,” Levine said.

Source: https://documentedny.com/2018/09/19/credit-union-holding-taxi-medallion-loans-shutters-leaving-drivers-in-limbo/

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Uber, lyft and other taxis

Lyft Is Another Step Closer to Driverless Ridesharing

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Ridesharing company Lyft (NASDAQ: LYFT) inched a little bit closer toward self-driving ridesharing last week when it said in a blog post that it’s adding Chrysler Pacifica hybrids to its autonomous vehicle (AV) testing fleet and opening a new self-driving vehicle test facility.

The new facility, located in East Palo Alto, California, will allow the company to increase the number of AV tests it can run. It will also let the company test how the systems do with different road configurations, including intersections, merging lanes, traffic lights, and similar challenges. The company said in the post that the new facility will let Lyft “further accelerate the speed of innovation.”

Lyft says that it’s driving four times more autonomous miles per quarter than it was just six months ago and has about 400 employees worldwide working on self-driving tech. That figure is likely to expand, considering that Lyft has more than 40 autonomous vehicle job openings listed on its website.

In addition to the new facility, Lyft said that it’s adding Pacifica minivans to its AV fleet, which is the same vehicle that Waymo, Alphabet’s self-driving car company, uses for its public self-driving ridesharing project and AV tests. Lyft said that, “The minivan’s size and functionality provide our team with significant flexibility to experiment with the self-driving rideshare experience.”

Why does all this matter for Lyft’s autonomous-vehicle future? Because to have a successful, public self-driving ridesharing fleet in the coming years, Lyft needs to lay the groundwork right now.

Isn’t Lyft already doing AV testing?

Lyft is, of course, already working on AV testing. The company’s original self-driving test facility has been up and running since early 2018. The company also started a partnership with Waymo earlier this year to test autonomous ridesharing. Additionally, Lyft also works with Aptiv, an AV tech company, and together they’ve created “the largest publicly available commercial self-driving program in the country” and have completed more than 75,000 rides through the partnership.

But the recent announcements by Lyft show that the company is taking its AV focus a bit further. The Pacifica minivans have been used by Waymo’s AV ridesharing program in Phoenix for more than a year now, making them a proven choice for shuttling around ride-hailing passengers. Lyft may not be ready to launch a wide-scale autonomous ridesharing service just yet, but testing out these vehicles likely means that it’s moving past earlier stages of AV testing and is now looking at how its next-generation self-driving tech can handle new vehicles.

Why this matters for Lyft

Lyft and other ride-hailing companies, including Uber, are keeping a close eye on self-driving developments and testing out the technologies themselves because it could eventually become an integral part of their business model. Research from Intel predicts that the AV ridesharing market could be worth $3.7 trillion by 2050.

Additionally, as regulations surrounding ridesharing drivers continue to increase, Lyft is likely looking to AVs to eventually replace some human drivers. Just a few months ago, the state of California introduced a bill that could pave the way for independent contractors, including Lyft’s drivers, to be reclassified as employees. If a version of the bill becomes law and other states follow California’s lead, it could significantly increase operating costs for Lyft. That could be bad news for the company, which is unprofitable right now and hoping to be in the black just two years from now.

While Lyft’s announcements may not seem all that significant right now, investors should know that these baby steps moving the company closer to AV ridesharing could have huge results in the coming years. For now, investors should be pleased that Lyft is beefing up its own AV testing. Each move the company makes now means that it’ll be much more ready for a self-driving ridesharing future.

Source www.nasdaq.com

By Chris Neiger

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Uber, lyft and other taxis

Uber fined $650 million by New Jersey over driver classification

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New Jersey is the latest state to say Uber’s drivers should be classified as employees rather than independent contractors. The state’s Department of Labor and Workforce Development said that because of this misclassification, the ride-hailing company owes it roughly $650 million in unemployment taxes and disability insurance, according to Bloomberg Law.

The Department of Labor reportedly has been trying to get unpaid employment taxes from Uber going back as far as 2015, according to documents obtained by Bloomberg Law. It said the company owed the state $523 million in overdue taxes along with another $119 million in interest and penalties for the last four years. Uber disputes these findings.

“We are challenging this preliminary but incorrect determination,” an Uber spokesman said in an email. “Because drivers are independent contractors in New Jersey and elsewhere.”

Driver classification is an issue that government regulators have been taking a closer look at over the past year. California passed a law in September that could require Uber and other on-demand companies to reclassify their drivers as employees instead of independent contractors. The law is set to go into effect Jan. 1. New York, Oregon and Washington state have considered similar legislation.

Uber, Lyft and several other tech companies have vowed to fight the California law, collectively putting more than $90 million behind a ballot initiative that’ll take the issue to voters next November. Many drivers have said this move is a slap in the face as they struggle to earn a living wage.

Uber’s and Lyft’s business models depend on bringing aboard hundreds of thousands of independent contractors, whose labor is typically cheaper than that of employees. That’s because Uber and Lyft drivers supply and maintain their own cars and also pay for their own health care and benefits, such as sick days or overtime pay.New Jersey is the latest state to say Uber’s drivers should be classified as employees rather than independent contractors. The state’s Department of Labor and Workforce Development said that because of this misclassification, the ride-hailing company owes it roughly $650 million in unemployment taxes and disability insurance, according to Bloomberg Law.

The Department of Labor reportedly has been trying to get unpaid employment taxes from Uber going back as far as 2015, according to documents obtained by Bloomberg Law. It said the company owed the state $523 million in overdue taxes along with another $119 million in interest and penalties for the last four years. Uber disputes these findings.

“We are challenging this preliminary but incorrect determination,” an Uber spokesman said in an email. “Because drivers are independent contractors in New Jersey and elsewhere.”

Driver classification is an issue that government regulators have been taking a closer look at over the past year. California passed a law in September that could require Uber and other on-demand companies to reclassify their drivers as employees instead of independent contractors. The law is set to go into effect Jan. 1. New York, Oregon and Washington state have considered similar legislation.

Uber, Lyft and several other tech companies have vowed to fight the California law, collectively putting more than $90 million behind a ballot initiative that’ll take the issue to voters next November. Many drivers have said this move is a slap in the face as they struggle to earn a living wage.

Uber’s and Lyft’s business models depend on bringing aboard hundreds of thousands of independent contractors, whose labor is typically cheaper than that of employees. That’s because Uber and Lyft drivers supply and maintain their own cars and also pay for their own health care and benefits, such as sick days or overtime pay.

 

“New Jersey is sending a message that the state’s labor laws aren’t dictated by corporations,” Bhairavi Desai, executive director of the New York Taxi Workers Alliance, said in a statement. “It’s a stinging rebuke of the architects of the gig economy, and we hope it permeates across other sectors.”

Even if Uber’s drivers were determined to be employees rather than independent contractors, Uber said the $650 million New Jersey tax fine would be too high — particularly if it’s based on what the company has earned in the state. Uber didn’t disclose the revenue it generated in New Jersey over the past four years, but its combined revenue for all the markets where it operated in 2018 was $11.3 billion.

 

 

 

Source www.cnet.com

By Dara Kerr

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Adams Clinical removes hurdle to clinical trial participation

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How Adams Clinical increased retention and streamlined operations by switching to Uber.

One of the hardest parts of conducting a clinical trial is identifying willing participants. Once a participant is identified, strict qualifications and an often-lengthy time commitment limits who can participate, and a lack of access to transportation can make it difficult for participants to commit to and complete the study. To help improve recruitment and retention rates, Adams Clinical offered taxi rides to their participants. However, this solution became a burden on operational efficiency since taxis were only accessible to participants who lived close by and required the staff to pay at the end of each ride.

Finding the perfect transportation solution with Uber Health

To expand their transportation offering, Adams Clinical became an early beta partner with Uber in 2016. The team started using Uber’s web dashboard to arrange and pay for rides for participants with just a few clicks. Over the three years of this partnership, the switch to Uber Health simplified operational management, while reducing time spent on recruitment with increased retention rates. The easy-to-use Uber Health dashboard tracked all the rides and processed payments from one centralized interface, allowing the staff to arrange rides without the hassle of paying at the end of each trip. This flexibility, plus the extensive reach of Uber driver-partners in the Boston area, provided Adams Clinical with the transportation solution needed to successfully manage their participants in need of rides—which removed the headache from recruiting and retaining their study participants.

The result: Improved retention rates, simplified financial records, and an overall lift in team morale

By teaming with Uber Health, Adams Clinical enjoys a number of key benefits including:

• Expanded Recruitment—Using Uber Health cut down the length of enrollment by providing a larger pool to recruit from, resulting in a 5 to 10 percent reduction in recruitment time over the last two years. 

• Centralized Billing—All rides are charged to one company credit card, which is then processed at the end of each month to streamline the amount of administrative effort required.

• Reliable Service—Each ride is tracked in the dashboard so the team knows when the participant will be arriving to help keep the rest of the study on schedule.

• Improved Retention—In the first two years of the partnership with Uber, Adams Clinical estimated up to 20 percent fewer people dropped out of a trial when transportation was arranged to and from the clinic.

• Financial Accountability—Details for each ride are available in the dashboard, and can be downloaded to a spreadsheet, offering convenient management with trial-specific reporting per participant.

• Easy to Use—Using Uber Health has been easy for both staff and participants, even among populations without smartphones or passengers new to Uber.

 

by Kendall Brown

Source uber.com

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