By Vineeta Reddy
During the financial crisis in 2009, many believed that firms like AIG were “Too Big to Fail”. Such companies had such high stakes in the market and controlled the money of so many individuals that their collapse would have meant further decline of the economy, something that the US could not have handled. They were intricately wound into everyday financial interactions, making loans, and providing insurance, that their downfall would have been catastrophic. Thus, the government had no choice but to step in and bail them out in order to keep them afloat and keep businesses and the market running.
Now, 6 years after the financial panic, a NYC taxi fleet owner is claiming that his business is “Too Big to Fail” and is requesting a similar bailout from the government. He wants politicians to “guarantee taxi medallion loans, which would induce banks to extend more credit to fleet owners like him” (NYT). Prices of medallions have fallen due to companies like Uber who are competition for taxi drivers, and thus banks are now less willing to finance taxi drivers who wish to purchase them. Without them, however, the drivers are not authorized to give rides and collect fares in the state of New York. Mr. Freidman, the man asking for a bailout, is currently fighting Citibank, who is trying to take away “87 of his medallions after certain loans matured” (NYT). Without the help of the government, will the taxi industry as we know it give way to private car services like Uber? What will the city look like without the iconic yellow taxis speeding through the streets?