The thing is, if you run the numbers cab drivers have made this investment and it has been a great investment for a long time. But on 10-20 year timelines who can account for way Uber/Lyft changed everything?

I'm not that familiar with the regulations and history around medallion systems, but I can see what the parent post is getting at:

Why does a taxi driver need to take out a loan/risk to work?

When I take a job, there's risk with options or shares maybe, but I don't incur literal debt to begin work. It's the legal framework around medallions and private contracting that even put that risk on individuals.

> Why does a taxi driver need to take out a loan/risk to work?

This isn’t about a taxi driver... it’s about owning a taxi medallion. You don’t need a loan to drive a taxi. If you want to just drive the taxi, you can work for an existing company. But the company does need a medallion for your taxi.

This is much more like starting your own business. With a medallion, you can work your own taxi on your own time schedule - which is the main benefit to the owner. It’s also an asset that you can rent out to others when you aren’t using it.

So, taking a new job isn’t the right analogy. Think more like starting your own company (or more accurately, borrowing money to start your own company). There is significant freedom in that, but it also carries risk.

There is an easier way. It is possible to shift balance of protection to the borrower. As an absurd example: allow borrower to deny his loan. The troubles with too big loans will end instantly, because lenders will think not just twice, but thrice and even ten times.

This absurd way is absurd, but lawmakers could make it gentlier in a reasonable way. Give a consumer more protection, shift more risks unto lender's side and viola, you need not to pay fees for a legal help, while system works much more reliable, because lender would pay from his own pocket for a stupid loan. Borrower mistanderstood terms of a loan and couldn't pay? So lets write off 90% of his debt, let him pay remaining 10%. Who is the dumb one now? Not the borrower who couldn't understand the terms of the loan, but a lender who hadn't bothered to make terms to be crystal clear to the borrower.

I'm not sure does it counts as a govermental regulation, I believe not, because government needs to tweak system a bit, and then system would regulate itself. In any case it is the easiest way. But lenders do not agree of course.

What you are describing is how unsecured loans work now. It’s not like people keep paying when they don’t have money.

When a natural-person is involved a voice recording of a good summary of what you are agreeing with should be mandatory by _regulation_, there should be a notarized recorded statement saying something like "I Mohammed Hoque agree to pay 1.7 million dollars before 4 years from today [...]"