Uber, Lyft and Via Offered to Make a Fund for Taxi Drivers. The New York City Council Declined It

August 2, 2018, 12:06 AM UTC

The New York City Council, considering regulations on ride-hailing apps offered by Uber and others, rejected an offer by three companies to create a $100 million fund over five years to help struggling yellow taxi drivers, according to the New York Daily News. Uber, Lyft, and Via want the council to drop rules that could be voted on next week that would freeze new driver registrations for their services. The ride-sharing companies said they would contribute $20 million a year for five years to a fund administrated by a non-profit for the relief of drivers who found themselves in dire straits.

As ride-hailing apps have risen in popularity, taxi drivers have begun facing ruinous payments for their investment in taxi cab medallions, a serial-numbered badge bolted to a vehicle that conveys the right to operate it as a taxi that can be hailed on city streets and subject to regulated prices. Medallions have seen a precipitous drop in value since ride-hailing apps began putting cars on the road. One driver quoted in the New York Times last year had interest payments of $4,816 a month, and can only make enough money to pay that interest.

At least six drivers have committed suicide in acts connected with the collapse of the market for a taxi medallion in New York City, reports the Times. Before 2014, some taxi drivers had planned to use the resale value of their medallions to fund their retirements.

The council is considering a proposal to freeze on registering new ride-share vehicles in the city while they study the services’ ongoing impact, which it may vote on as soon as next week. However, if a freeze were put in effect, the ride-hailing services would still be able to apply to add vehicles that can handle riders who rely on wheelchairs, and the Taxi and Limousine Commission would consider adding new registrations for hails in parts of the city that receive less service as a result of the legislation.

The services claim that a freezing new registrations is effectively cutting the number of cars they have on the road, because of the high turnover rate of ride-share drivers. Lyft said its turnover rate is 25% a year.

The fund attempts to defuse the furore over a dramatic drop in income for licensed yellow cab drivers—both those who own medallions and those who lease medallions or cabs out to drivers. A council spokesperson said that the firms are welcome to set up a compensation program with a non-profit without any quid pro quo, the Daily News reported.

Lyft’s Joseph Okpaku, vice president of public policy, said in a statement provided to Fortune, “City leaders have repeatedly stated that helping struggling taxi drivers is a top priority, so it is baffling that they rejected $100 million of direct support for individual taxi drivers. They are prioritizing wealthy medallion owners over taxi drivers who need help.” An Uber spokesperson said, “We do not discuss private conversations.”

Only 13,587 medallions are currently outstanding in New York City for yellow cabs, which can pick up fares anywhere in city’s five boroughs. Taxi-fleet companies and private investors—including President Donald Trump’s one-time fixer, Michael Cohen—own about two-thirds of medallions. Prices for medallions once flew astronomically high—selling for as much as $1.3 million in 2014. Now, the badges fetch as little as $200,000.