In a recent Credit Union Journal opinion article, Ride-hailing stalled taxi loans – could it jump-start CU lending?, Richard Gallagher, CEO of Oak Tree Business Systems, Inc., discusses the disruption that ride-hailing companies have caused to the taxi industry and to medallion loans. Here is an excerpt from the article:
"Ride-hailing companies were a disruption. The taxi industry, in particular, was hit hard. Lawsuits were filed, but most of them were unsuccessful. It’s not because taxi companies had a weak case, though. The concerns were legitimate. Obtaining a taxi medallion was a lifeline for owners. Many would purchase one in hopes of driving for 10 years or so, then selling for a nice profit. The license fees vary, but you could expect to pay anywhere from $80,000-$200,000 to get started."
From the perspective of a credit union, there may be an opportunity to jump-start lending for drivers who are seeking to become a driver for one of these ride-hailing companies. Richard Gallagher explains that "lending to drivers for ride-hailing services could be a boon for credit union lending for three main reasons, and they all have to do with market expansion and competition." Continue reading on Credit Union Journal.
Credit unions hoping to capitalize on this opportunity must start by ensuring their consumer lending forms are up to date and integrate easily with a variety of data processors. Make sure your consumer lending package is current and stands compliant to lend to potential borrowers who work as drivers for Uber, Lyft and the like.