Keeping Your Head Above Water

(Original edit of article written for Taxi magazine).

New York City yellow cab drivers have been having it tough for a while. Like many taxi groups around the world, their trade has been hit by unfair competition from organisations like Uber. The situation in New York is particularly bad because in the past, drivers paid huge amounts of money to buy access into a trade where numbers are restricted.  Each taxi needs a licence medallion. The medallion system restricts numbers, and by 2014 they cost up to one million dollars to buy. Drivers can lease a medallion for $100 per shift, but in the past drivers took out loans to buy medallions when times were better and are now finding it hard to make the loan repayments. The arrival of Uber, Lyft, &c. have greatly reduced trade and taxi drivers aren’t making enough money to cover their loans. Some drivers have committed suicide over the worry.

Debt isn’t something you hear discussed in the cab caffs, but many of us have been affected by it at points in our lives. I’m managing to keep my head above water, but there have been some grim times.

London drivers don’t have to buy medallions; but a cab loan, or the weekly rental, takes a big chunk out of our pay. I was soon in trouble when I joined TfL as a Knowledge examiner in 2011. I was on a decent wage, but I was only a few months into a finance deal on a new cab and I had to find £768 every month. That was the basic cab loan; my fuel bill driving in from Northampton every day was colossal. I had to work one or two days on the cab at weekends after five days at TfL just to pay the loan. And although TfL paid my train season ticket from Northampton – yes, very generous – I had to wait four weeks for my first pay packet. I was also shocked how much I was deducted for tax, National Insurance and pension.

I dug myself into a hole. It isn’t always easy to admit you have a problem, but I eventually sought help from a debt charity. They consolidated my various debts and loans into one agreed monthly payment. Even with a large debt, it can be spread out and managed. They helped explain things with the banks.  My main bank put my account on “Control”. All that really meant was that I couldn’t get an overdraft. Just as well really, as that helped me to get into difficulty in the first place.

I eventually recovered, but I faced another financial meltdown when the cab’s engine and gearbox needed replacing in October 2018. Before I could get straight, the cab failed its licensing inspection in March 2019. I had to spend a king’s ransom on bodywork. It would have ruined me had I not been able to cash in a small pension I took out when I started out in the late 1980s. I only take a week each year on a proper going-away holiday, but problems with the cab forced me to have several weeks off. I’m sure some drivers have been ruined by similar events. Having enforced holidays costs us dearly.

Having a bad credit rating makes it difficult to get further credit, but once you get straight and start making payments on time you credit rating improves quickly. After a few years I managed to obtain a credit card, and my credit Iimit has been raised a few times. I try to pay the full amount every month to avoid exorbitant interest payments.  I used to dread official-looking envelopes arriving from companies I didn’t recognise. I still do, but mostly because I think it might contain a photo of my cab on a yellow box junction and a demand for payment – as it did only last week when a photo arrived showing my cab touching a yellow box junction on Cricklewood Broadway.  I don’t open letters straight away if I think they might contain something nasty. I wait until I’ve finished work for the week. I recently received a letter from Huddersfield. I don’t know anyone in Huddersfield, or knowingly have any business dealing with anyone in Huddersfield. When I eventually found the courage to open the letter I saw it was from my bank offering me a credit card. Times have certainly changed for me, though I’m not complacent. I also know where to find help if I need help. Unforeseen things happen, particularly when you’re self-employed and are dependent on an expensive vehicle for your livelihood. It’s important not to overreach yourself with cab loans, and to be realistic about your earning capability. You need to base your financial projections on your worst day rather than your best day, and sometimes that figure needs to be reviewed.

You need to be honest with yourself if you are getting into difficulties. Admitting you are in trouble is difficult. It affects your pride; but it’s usually best to speak to your family about any problems and have them on your side too.

If anyone reading this gets into financial difficulties, I can recommend a free service from the organisation that helped me get back on the straight and narrow, Step Change.

 

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