Evgeny Freidman, known as Gene, said in an interview Thursday that the taxi industry, like the financial industry, was too big to fail. He would like the city to guarantee taxi medallion loans, which would induce banks to extend more credit to fleet owners like him, and he compares this approach to the federal government’s actions to save large banks and insurers in 2008.

“I still see Bernanke saying, ‘I hate A.I.G.; I don’t want to give them any more money, but I have to,’ ” he said, referring to the former Federal Reserve chairman Ben Bernanke and the large insurer that was bailed out in 2008.

Mr. Freidman’s problem is not unlike that of any homeowner who bought real estate in the early part of the century thinking prices could only go up. In New York, medallions, the license that is required to operate a yellow taxi, are fixed in number, and their price rose for decades because of increased demand and restricted supply.

Prices peaked in 2013, not just in New York but also in other large markets like Boston and Chicago. Prices have declined as taxis have faced competition from car service apps like Uber. At the top, the price for New York mini-fleet medallions, which may be owned by nondrivers, was over $1.2 million.

Medallions have typically been financed with debt, but creditors have become skittish because of falling prices. The lack of access to credit has caused medallion sales to slow to a trickle as buyers have faced great difficulty finding financing; this has also made it difficult for medallion owners facing loan maturities to sell.

Brett Berman, a lawyer for Mr. Freidman, issued a six-page letter on Thursday with a warning to creditors, city officials and other “stakeholders” in the taxi industry: “Should you fail to act and permit or contribute to Mr. Freidman’s failure, such action or inaction will have an effect on the medallion industry across the country.”

Mr. Freidman is currently locked in litigation with Citibank, which is trying to seize 87 of his medallions after certain loans matured. Ronn Torossian, Mr. Freidman’s spokesman, declined to say exactly how many New York medallions Mr. Freidman owns. According to the letter, entities related to Mr. Freidman control one-sixth of New York’s mini-fleet taxi medallions, which would mean approximately 1,000 of them. They would be worth around a billion dollars even after recent price declines.

Mr. Freidman said the disruption from sharply falling medallion prices and seized-up credit markets would hurt governments, which collect revenue from taxes on medallion sales and taxi fares. He said it would also harm riders, with taxis being taken out of circulation as their medallions were foreclosed on. He contends that the whole situation is “artificial” and that government intervention to prop up the lending market would cause prices to return to “normal.” Government guarantees for owners like him might allow him to maintain the value of his assets and continue to produce revenue from them.

Of course, there are a few problems with his argument. The first is that there was nothing “normal” about a New York taxi medallion costing more than a million dollars. Before medallion prices started falling in 2013, they more than quadrupled in a decade

Read more: One of New York City’s largest taxi fleet owners is asking for a bailout

Source: nytimes.com