Uber, Lyft take down not just cab drivers, but also lenders

Posted at 11:45 AM, Jul 15, 2017
and last updated 2017-07-15 11:45:57-04

NEW YORK (AP) -- The ride-hailing apps that are disrupting travel in cities around the world have also disrupted the economics of what once seemed a watertight investment - a New York City taxi medallion.

The value of the medallions that confer ownership of a yellow cab has dropped from $1.3 million in 2014 to less than half that now.

Some medallion owners owe more on their loans than the medallions are worth, a situation that's analogous to the housing crisis of a decade ago.

Financial institutions have also been affected, with three New York-based credit unions that lend money for medallions placed into conservatorship.

One of them, LOMTO Federal Credit Union, was placed into conservatorship by the National Credit Union Administration on June 26 "because of unsafe and unsound practices."