Credit union suing San Francisco over 'worthless' taxi medallions

SAN FRANCISCO (KGO) -- Taxi medallions used to be prized possessions in San Francisco - a license to own a business.

They cost a quarter of a million dollars in San Francisco, but there a big question -- are they worth it?

As companies like Uber and Lyft take an increasing share of passengers, the taxi medallion's worth is decreasing.

Find a line of waiting taxis in San Francisco, walk up, ask a question, and you will hear their tale of woe. "If I know what was going to happen, I'd never do it," said Ibrahim Awwad.

"Do you feel like a sucker?" we asked Ahmad Massadjedi.

"I'm sure I do. I am," he said.

And all for trying to better himself by purchasing a San Francisco Taxi Medallion. They used to be in limited supply. Owning one was like owning a business. Then, in 2010, San Francisco's Municipal Transportation Agency sold 700 medallions at $250,000 each as a method of generating revenue.

It was just before Uber and Lyft cars and drivers flooded city streets, saddling new owners with high mortgage payments for those medallions. "It's worth nothing," said Ibrahim. "Who wants to buy a $250,000 medallion? Nobody. I blame the city."

So does the San Francisco Federal Credit Union, which originally made a deal with the city's Municipal Transportation Agency to finance those loans. One of six has foreclosed. This week, the credit union filed suit against the city for $125 million.

"It left taxi medallion owners holding the bag," said attorney Jonathan Joseph. "No one is suggesting what the MTA should have done but it should have done a lot more than it did. It could have regulated Uber and Lyft."

The MTA has no comment on the suit, and referred ABC7 News to the City Attorney's office. "We are reviewing it," said a spokesman.