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In the shadow of Uber's rise, taxi driver suicides leave cabbies shaken

"What Uber and Lyft have done is come into the industry and wreck it," a Chicago taxi driver said.
Image: Nnamdi Uwazie
Nnamdi Uwazie said he drives seven days a week, 15 hours a day, and after he pays the cab company the $475 weekly lease fee, he rarely has more than a few hundred dollars left to feed his family.Alyssa Schukar / for NBC News

Take it from veteran Chicago cabby Nnamdi Uwazie: The shock waves from the recent suicides of five New York City taxi and livery drivers are being felt in the Windy City as well.

So is the desperation that drove a struggling limo driver to kill himself with a shotgun outside City Hall in Manhattan two months ago.

"We were all talking about what happened in New York and how it could happen here because it's so hard to be a cab driver in Chicago," Uwazie told NBC News. "So many people's livelihoods are gone. It is only by the grace of God we are still here."

For cab drivers like Uwazie, the culprit in Chicago, as in New York, it's ride-sharing services like Uber and Lyft that have revolutionized the industry and siphoned off customers, while not having to comply with the same stringent regulations as taxi drivers.

The wave of suicides that claimed the life of livery driver Douglas Schifter and four others appears to be limited to New York, but taxi industry insiders say drivers across the country face the same pressures — especially those in big cities who invested hundreds of thousands of dollars in taxi medallions that have rapidly lost their value with the rise of the ride-sharing services.

“It’s an economic crisis across the industry and across the country,” said Bhairavi Desai, executive director of the New York Taxi Workers Alliance, a union for cabbies.

Uwazie, 55, a Nigerian immigrant, has been driving for over a decade and said the last few years have been especially hard because of the arrival of Uber.

"What Uber and Lyft have done is come into the industry and wreck it," Uwazie said. "It's not that they should not be in it, but they should be regulated like taxi cabs."

Uwazie said he drives seven days a week, 15 hours a day, and after he pays a cab company the $475 weekly lease fee, he rarely has more than a few hundred dollars left to feed his family.

“It is actually difficult now to survive in this industry,” Uwazie said. “I have three kids and they depend on me. I have to put food on the table and pay the bills. There is a lot of pressure on me.”

The medallion problem

Uwazie said he knows several Chicago drivers who died of heart attacks or strokes after struggling financially.

Image: A Chicago taxi medallion
Many immigrants saw securing a taxi medallion as the fulfillment of their American Dream.Alyssa Schukar / for NBC News

“The drivers are underwater and if they can’t refinance, they are giving up their medallions,” said Uwazie, who had hoped to one day buy his own medallion but is now glad he didn't. “Those medallions were supposed to be their 401(k)s, but everything has been flushed down the drain."

In a measure of how shaken drivers in Chicago are by what happened in New York, The Chicago Dispatcher, a monthly newspaper for cab and livery drivers, placed an ad for a suicide prevention hotline on page 3 of the April edition.

Taxi medallions are permits that cities issue to cap the number of cabs on the road. Until the past several years, the value of the medallions seemed to keep rising as large taxi companies, individual operators and other investors bought them up.

Many immigrants saw securing a taxi medallion as the fulfillment of their American Dream, and they financed them as they would a mortgage, assuming they would only grow in value over time.

In 2014, the price of a New York City medallion topped $1 million. That year, they went for $700,000 in Boston, $400,000 in Philadelphia, and $300,0000 in Chicago.

But with the advent of outfits like Uber and Lyft, which cracked the cab monopoly by enabling consumers to hail rides from any registered driver using smartphones, loans for medallions dried up as the prices plummeted. Last year, more people used Uber than yellow cabs in New York City, according to the city’s Taxi & Limousine Commission, or TLC.

It’s an economic crisis across the industry and across the country.

Meanwhile, cabbies and cab company operators have been unloading their medallions, the chief reason being bankruptcy. At a recent auction, the bidding for five New York City taxi medallions put up by the Aspire Federal Credit Union started at $150,000, and none sold for more than $200,000, Crain’s New York reported.

The situation in Chicago is no better. Three years after the city allowed Uber and Lyft to operate, hundreds of cab drivers are frantically trying to unload their medallions, and hundreds more are in foreclosure, said Cab Drivers United, the local union.

“There isn’t any financing available anymore,” said Charles Goodbar, a Chicago lawyer who used to help secure loans for medallion buyers and owns 58 of them himself.

Goodbar recalled an immigrant cabbie, Joseph Slivo, who used every penny he had to make a down payment on a medallion and then found himself unable to keep up the loan payments because he wasn’t making enough on the road.

“He turned his medallion in and a week later he was dead" of a heart attack, Goodbar said. “It’s sad. This was a family man, a dedicated driver."

Yu Mein Chow, a New York City cabbie who was found drowned in the East River in May, had taken out a loan seven years ago to buy a $700,000 medallion and was also struggling, The New York Times reported. His family believes he killed himself.

Uber, in a statement, expressed condolences to the Chow family but said he was the victim of predatory lenders and economic change.

“Drivers who own individual medallions have been left behind by change and exploited by lenders, and we support action that eases their financial burden," the company said.

Uber also defended the company's practices in New York, saying Uber drivers are not poaching the main territory served by yellow cabs, which is Manhattan.

"Uber has worked hard to grow the transportation pie, ensuring that all New Yorkers can get a ride in minutes, particularly in neighborhoods outside of Manhattan that have been long ignored by yellow taxis and underserved by public transit,” the spokesperson said. “The majority of our trips are happening in the Bronx, Staten Island, Queens and Brooklyn."

'A deeper crisis'

John Boit, spokesman for the Taxicab, Limousine & Paratransit Association, a national group, said operators like Uber aren't solely to blame for undermining what had been a respectable living for generations of drivers — New York's City Hall also deserves blame for not protecting those who had invested in driving careers, he said.

“The city enriched itself with billions of dollars in medallion sales and then allowed a massive influx of new drivers, clogging the streets and bringing down income industrywide,” he said. “The current situation makes it impossible for many to repay their debts. What the drivers need now is a fair solution for their investment in city medallions and a level playing field for the future."

The New York City Taxi Workers Alliance, the local yellow cab union, has called for changes including capping the number of for-hire vehicles operating in the city.

Mayor Bill de Blasio has not yet taken a position on the requested changes.

"These are painful stories and heartbreaking losses that no words will heal," Austin Finan, a de Blasio spokesman, said. "The pressures faced today by taxi and for-hire vehicle drivers are enormous. Alongside the council and the TLC, we’re taking a sober look at how to make it easier for drivers to make ends meet in this tough environment.”

This year, the Chicago City Council passed some reforms aimed at helping beleaguered cabbies, like extending limits on vehicle age, which Uber supported.

But taxi drivers still face a different set of fees and rules than Uber drivers. Taxi drivers in Chicago pay more than $2,000 per year in city fees and taxes, while Uber pays an annual $10,000 fee to the city for permission to operate.

Lilia Chacon, a spokeswoman for the office of Chicago Mayor Rahm Emanuel, said the ride-share industry is subject to additional taxes beyond the licensing fee and insisted the city has been trying to respond to the concerns of cabbies.

"The city has a continuous dialogue with the taxi industry," Chacon said in an email. "We will always seek to listen to and address the taxi industry's concerns and remain open to additional reforms to streamline and improve the industry."

But in a city where clout is king, Uber has a direct line to the mayor.

Emanuel's former chief of staff Lisa Schrader now works for Uber. And the Hollywood talent agency headed by Emanuel's brother, Ari, is a big investor in the company.

Before Schifter, the New York livery driver, killed himself in February, he waged what The New York Times called a “one-man campaign to stop Uber from putting his fellow black-car drivers out of business.” He posted a note on Facebook saying he could no longer make a living and blamed the city for not doing more to rein in Uber.

“I am sure there are people feeling pain in cities all over the country,” said Neil Weiss, who is editor of Black Car News, which covers the for-hire vehicle industry in New York. He edited the columns that Schifter wrote for the trade publication and considered him a friend.

In 2013, when there were 47,000 for-hire vehicles in New York, drivers could recoup their initial investment of a car, insurance and licensing and then make a living, Weiss said. Now there are more than 100,000 for-hire vehicles, and about two-thirds of those are Uber rides, according to the TLC.

“Studies have shown that Uber drivers themselves earn below the minimum wage,” said Desai of the New York Taxi Workers Alliance. “There is a deeper crisis here that is destroying the lives and livelihoods of full-time drivers.”

If you or a loved one are looking for help, please call the National Suicide Prevention hotline at 1-800-273-8255.