✰PREMIUMSpotlight: How are yellow taxis doing in 2025?

After a decade of turbulence and hardship for yellow taxi drivers, the page seems to have turned on the worst of the medallion crisis and ride-share surge. The pandemic is over, and ride-hailing numbers are inching back toward their previous highs.

But a new era brings new challenges. In the coming years, cabbies will have to confront a long-unstable insurance system that threatens to collapse and shoulder the financial strain of new accessibility requirements and electric vehicle demand — all while facing an uncertain future in which driverless cars may dominate the streets.

Once again, in 2025, the resiliency of one of New York's oldest cultural traditions will be put to the test.

Insurance

All taxi drivers in the city are required to have insurance. By far the largest provider is the American Transit Insurance Company (ATIC).

ATIC provides insurance for over 60% of for-hire vehicles in the city, which includes some 74,000 taxis and rideshare cars. They are one of the few private insurers who cover the specialty needs of for-hire vehicles and they may be on the verge of collapse.

ATIC has reported steady losses for years, leading to insolvency and over $700 million in net losses by the second quarter of 2024. Without sufficient money in reserves, ATIC has managed to stay afloat by using incoming premiums to cover its past claims, leaving a backlog that puts thousands of drivers at risk in the event of an accident.

Were ATIC to fail, thousands of taxis, Ubers and Lyfts would be forced off the road until they can acquire new insurance — a tall task given the paucity of eligible providers in the city. During that time, tens of thousands of drivers would lose their primary or sole source of income, and hundreds of millions of dollars in anticipated claims would go unpaid.

"Absent a substantial capital infusion, [ATIC] can only use current premiums to pay…past claims. If this situation is not resolved, ATIC is at significant risk of failure," wrote Bernard Ganley, a deputy superintendent for insurance at the New York State Department of Financial Services, in a letter to ATIC's Chief Compliance and Risk Officer.

American Transit has denied wrongdoing, pointing to "rampant insurance fraud and escalating costs." However, Bernard Ganely reports that "there remains no reasonable business justification" for some of ATIC's largest business moves, which were "used to benefit their affiliates and management."

State regulators are currently investigating a solution. In the meantime they've approved two premium rate increases for ATIC, minimizing losses for the cash-strapped company but antagonizing the Taxi Workers Alliance. In order to pay for premium hikes, taxis have to increase fare costs for a consumer base that already recoils from cab prices.

The governor's office has suggested legislation that would reduce the required personal injury protection coverage for drivers in the city's Taxi and Limousine Commission from $200,000 (four times higher than the rest of the state) to $50,000. Personal injury protection, also called "no-fault insurance," covers the expenses of pedestrians, cyclists, drivers and passengers injured in a vehicle crash, regardless of who is at fault. New York City Council Member Carmen De La Rosa, who sponsored the bill, says the aim is to reduce overall costs for drivers.

Opponents of the bill argue that passing off health expenses to the victim of a crash is not a solution. "Reducing available insurance coverage, which protects injured victims, puts New Yorkers at risk and creates a dangerous precedent," said Victoria Wickman, president of the New York State Trial Lawyers Association.

While officials with ATIC, the governor's office and the Department of Financial Services work to find a solution, approximately 60% of the city's yellow taxi drivers wait anxiously to learn whether or not they will lose their livelihoods.

Rising costs

Year by year, it is becoming more expensive to operate a taxi in New York City.

In 2013, the city agreed to a settlement with accessibility advocates, stipulating that half of all taxis on the road be wheelchair accessible by 2020. The city missed the 2020 deadline, and then missed the 2023 compliance extension. In August 2024, Judge George Daniels of the Southern District of New York ruled that the 50% threshold must be met by March 2025, and 100% of the yellow taxi fleet must be made accessible by 2028.

The new mandates mean that the Taxi and Limousine Commission (TLC) will only approve a yellow taxi medallion owner if their car is equipped with the required accessibility features, including a wheelchair ramp. Additionally, taxis will have to be retrofitted with accessibility equipment every time they complete a certification and inspection, which is required at least once every 7 years. In all likelihood, many taxis will have to be converted regardless of inspection in order to meet the March deadline.

Accessibility upgrades can cost as much as $90,000. After the original 2013 ruling, the TLC created a Taxicab Improvement Fund to assist with conversion costs. According to the TLC, the fund has distributed more than $235 million between 2015 and 2023. They also provide an upfront payment of $14,000.

But taxi drivers say it is not enough, and the brunt of the cost will end up falling on them. The New York Taxi Workers Alliance has warned that cabbies may end up spending $70,000 – $90,000 to meet the accessibility mandate. These costs, in addition to the monthly mortgage payments on their medallions, are an untenable option for most cabbies.

"The TLC is trying to use an iron fist to force drivers to convert," Bhairavi Desai, president of the New York Taxi Workers Alliance, told THE CITY. "What it's going to do is lead to bankruptcies."

"I owe $680,000 in that medallion, and it's hard for me to get [an accessible car] right now because my bill is going to be almost $6,000 a month," taxi driver Naider Henry told Spectrum News. "And I have my life to take care of."

An uncertain future

The "hidden costs" of taxi ownership don't stop with accessibility upgrades. Drivers must handle the costs of maintaining a rapidly aging fleet. A spike in cashless payments translates to more transaction fees from credit cards. And the possibility of electric vehicle (EV) conversion looms large.

Already, Ubers and Lyfts in NYC are required to be fully electric by 2030. While these requirements only apply to the "High-Volume For-Hire Vehicle" sector — or app-based ride-share companies — the Taxi and Limousine Commission has suggested that expanded charging infrastructure resulting from this initiative will facilitate future transitions for other TLC-regulated fleets, including yellow taxis.

To drivers, this means additional costs. Financial incentives for yellow taxi drivers are limited compared to those available to rideshare companies, including insufficient subsidies for purchasing EVs and challenges with accessing charging infrastructure.

Working as a taxi driver is expensive. For decades, the costs of maintenance were offset by a steady, reliable source of income. But it's unclear what lies in store for taxi ridership in the city.

New York City has already begun to roll out a permitting process for companies testing self-driving cars on the roads. "Autonomous vehicles aren't just coming, they're here — they've been successfully operating across the country for years," said Meera Joshi, New York City deputy mayor for operations.

Waymo, a robotaxi startup in San Fransisco, reported over 4 million fully autonomous commercial rides in 2024. Amazon's Zoox has launched an autonomous shuttle in Las Vegas. It's only a matter of time before these companies turn their sights on the largest taxi market in the country — New York City.

After the last technology breakthrough in the taxi industry, cabbies lost their jobs to Uber and Lyft drivers. The next breakthrough may just give their jobs to cars without drivers.