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Chicago Cab Drivers Protest Rising Foreclosures

CHICAGO (CBS) -- Dozens of cab drivers protested Tuesday morning outside the office of LOMTO Federal Credit Union's Chicago legal representatives, 661 W. Grand.

"I say lawsuits, you say no, no! Taxis, taxis, you say yes, yes!" chanted protestors.

Chicago's roughly 2,000 taxi cab-driving, medallion owners are affected by what they are calling a foreclosure crisis.

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Dozens of cab drivers protested Tuesday morning against rising foreclosures. (WBBM/Lisa Fielding)

"We've been suffering from a lot of unfair practices," said Nmamdi Uwazie, Representative, Cab Drivers United/AFSCME Local 2500.

"Over 100, 120 have been foreclosed upon and taken to court. We are here to let LOMTO know that this isn't the making of the drivers. It's the competition. It's the ride sharing situation," he said. "It is making it very, very hard for the drivers to fulfill their own obligations. We are asking for a way it can be restructured so drivers can pay for the medallion and take care of their families."

Since October, lenders have filed lawsuits against at least 107 medallion owners who have fallen behind on loan payments, by to the union's count.

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One sign read, "my medallion is my life: life savings, retirement, family's future. (WBBM/Lisa Fielding)

Uwazie said the falling value of medallions has impacted credit markets and more taxi drivers are falling into foreclosure.

"You have to have a medallion to practice as a taxi driver in Chicago. It's valued between $360,000 and $400,000 a few years ago. Now it's only valued at about $44,000," he said.

Uwazie said the union has gone to the city to urge less regulations and reduce the burden on small taxi owners.

"For you to be a cab driver, you have to go to class, take an exam, know the geography of the city, you have to go for a drug test, pay a fee and again, taxis also have to be green, environmentally friendly. The city mandated every medallion owner to have an environmentally friendly automobile," he said.

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Another sign read, "Taxi Service Matters." (WBBM/Lisa Fielding)

In June 2014, the City of Chicago enacted a two-tier regulatory system that opened the taxi market to tens of thousands of for-hire vehicles.

The Union said the taxi industry is over regulated and its created unfair competition between ride share operators like Uber and Lyft, and cab drivers, many of whom invested hundreds of thousands of dollars in medallions.

Uwazie said his business has been cut in half since ride sharing came to town.

"Now, even if you put into 14-16 hours a day, you can't make even half of what you used to," he said.

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Nmamdi Uwazie said the falling value of medallions has impacted credit markets and more taxi drivers are falling into foreclosure. (WBBM/Lisa Fielding)

Unable to keep up with loan payments coupled with high operating costs, hundreds of taxi owner/operators are facing foreclosure on their medallions.

Uwazie said thousands more are likely to face the same fate unless the city takes substantial action to reduce the burden on small taxi owners.

LOMTO is one of the leading lenders in the taxi industry. Drivers are calling on LOMTO to stop the foreclosures while the union works with the city to enact relief measures that will allow drivers to survive and compete.

"We are asking this law firm to stop the foreclosures. It's hurting families. Let us see where we can restructure these loans," he said.

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"I say lawsuits, you say no, no! Taxis, taxis, you say yes, yes!" chanted protestors outside the office of LOMTO (WBBM/Lisa Fielding)

According to union statistics, 39 percent, or about 2,700 of Chicago's medallions are owned by individuals who own four or fewer taxis.

Nine-hundred medallions are currently in foreclosure with more than 700 are surrendered to the city.
While the median net income per medallion was $19,000 in 2013, as of 2016 it stands at -$4,000.

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