For years, a generation of New York City taxi drivers who wanted to own their own cabs were channeled into exploitative loans that left them deeply in debt, or even bankrupted. The city, which reaped hundreds of millions of dollars from the practice, ignored their plight.

On Tuesday, for the first time, the city announced a concrete plan to aid the drivers, who have been battered even more by the pandemic.

Mayor Bill de Blasio announced a plan to spend $65 million of the money that the city expects to receive from the federal stimulus package to help restructure the loans that drivers obtained to buy medallions, the city permits that let them own their own cabs.

The plan was not the full bailout that taxi drivers had wanted. It would still leave them in debt, with large monthly payments. But if successful, the program could eliminate hundreds of millions of dollars owed by drivers who fell victim to abusive lending practices and then were further devastated by the emergence of ride-hailing companies such as Uber and Lyft and a big dip in passengers during the coronavirus outbreak.

“This new plan will be a difference-maker for many, many drivers,” Mr. de Blasio said during a news conference.

Critics, however, immediately took aim at the plan, saying it did not nearly go far enough.

“The mayor’s proposal is a disgrace and fails to deliver the significant relief drivers deserve,” said the city comptroller, Scott Stringer, who has endorsed a more ambitious proposal that could forgive much more debt with less city money. “There is no excuse not to address the crisis with a real solution. We have the means — we just need the will to meaningfully act.”

Still, the new plan marks the most significant step toward helping the city’s cabdrivers since a spate of suicides drew global attention to their financial struggles in 2018 and 2019.

As The New York Times reported in a series of articles, a group of taxi industry leaders had artificially inflated the price of a medallion to more than $1 million from about $200,000. They channeled immigrant drivers into loans they could not afford, creating a buying spree that drove up the price of the permits, and then extracted hundreds of millions of dollars before the bubble burst.

During the bubble, government officials worsened the problems by exempting the industry from regulations. The city also chose to fill budget gaps by selling medallions and running ads promoting the permits as “better than the stock market.”

The city could still face a lawsuit from the state attorney general, Letitia James, whose office investigated the crisis in response to the Times series and found the city was chiefly responsible. Ms. James announced last year that unless the city bailed out cabdrivers, she would sue the city for $810 million and give it to drivers. Her office did not respond to a request for comment about whether the mayor’s plan answered her findings.

Taxi industry leaders have long denied wrongdoing, describing their tactics as normal business practices and noting that regulators approved their methods. They have blamed the industry’s financial crisis exclusively on ride-hailing companies.

In recent years, competition from Uber, Lyft and other companies has reduced the amount of revenue that cabdrivers can make by driving. And in the last year, the pandemic has almost entirely crippled the industry, leading many drivers to stop working entirely.

As of January, the latest month for which data is available, revenue for the industry was down 80 percent over the same month a year earlier. That was better than in the worst days of the pandemic in New York in March and April — but not by much.

Many drivers who own their cabs have gotten by because of the federal government’s enhanced unemployment program, as well as assistance from the Paycheck Protection Program, neither of which will provide support on a long-term basis.

The new plan from City Hall, called the Taxi Medallion Owner-Driver Relief Fund, will provide up to $29,000 in no-interest loans to each of the estimated 3,000 drivers who purchased their own medallion. (Thousands of other drivers work for large fleets that control more than 5,000 other medallions.)

Frequently Asked Questions About the New Stimulus Package

The stimulus payments would be $1,400 for most recipients. Those who are eligible would also receive an identical payment for each of their children. To qualify for the full $1,400, a single person would need an adjusted gross income of $75,000 or below. For heads of household, adjusted gross income would need to be $112,500 or below, and for married couples filing jointly that number would need to be $150,000 or below. To be eligible for a payment, a person must have a Social Security number. Read more.

Buying insurance through the government program known as COBRA would temporarily become a lot cheaper. COBRA, for the Consolidated Omnibus Budget Reconciliation Act, generally lets someone who loses a job buy coverage via the former employer. But it’s expensive: Under normal circumstances, a person may have to pay at least 102 percent of the cost of the premium. Under the relief bill, the government would pay the entire COBRA premium from April 1 through Sept. 30. A person who qualified for new, employer-based health insurance someplace else before Sept. 30 would lose eligibility for the no-cost coverage. And someone who left a job voluntarily would not be eligible, either. Read more

This credit, which helps working families offset the cost of care for children under 13 and other dependents, would be significantly expanded for a single year. More people would be eligible, and many recipients would get a bigger break. The bill would also make the credit fully refundable, which means you could collect the money as a refund even if your tax bill was zero. “That will be helpful to people at the lower end” of the income scale, said Mark Luscombe, principal federal tax analyst at Wolters Kluwer Tax & Accounting. Read more.

There would be a big one for people who already have debt. You wouldn’t have to pay income taxes on forgiven debt if you qualify for loan forgiveness or cancellation — for example, if you’ve been in an income-driven repayment plan for the requisite number of years, if your school defrauded you or if Congress or the president wipes away $10,000 of debt for large numbers of people. This would be the case for debt forgiven between Jan. 1, 2021, and the end of 2025. Read more.

The bill would provide billions of dollars in rental and utility assistance to people who are struggling and in danger of being evicted from their homes. About $27 billion would go toward emergency rental assistance. The vast majority of it would replenish the so-called Coronavirus Relief Fund, created by the CARES Act and distributed through state, local and tribal governments, according to the National Low Income Housing Coalition. That’s on top of the $25 billion in assistance provided by the relief package passed in December. To receive financial assistance — which could be used for rent, utilities and other housing expenses — households would have to meet several conditions. Household income could not exceed 80 percent of the area median income, at least one household member must be at risk of homelessness or housing instability, and individuals would have to qualify for unemployment benefits or have experienced financial hardship (directly or indirectly) because of the pandemic. Assistance could be provided for up to 18 months, according to the National Low Income Housing Coalition. Lower-income families that have been unemployed for three months or more would be given priority for assistance. Read more.

The city’s plan is not nearly enough to bail out the drivers, who each owe about $500,000 in loans on average. But it is expected to be enough to allow drivers to strike deals with their lenders, many of which are eager to recoup as much debt as quickly as possible.

Several lenders, including the largest holder of medallion loans, the private equity firm Marblegate Asset Management, have already indicated that they would be willing to whittle loans to a range of about $250,000 to $300,000 in exchange for a down payment.

On Tuesday, a Marblegate spokesman applauded the plan. “This proposal recognizes that taxis are a critical part of New York City’s infrastructure, and provides owner-drivers meaningful relief that will help them restructure their loans — lowering their monthly payments and bolstering their economic prospects, while stabilizing the industry,” he said.

Aloysee Heredia Jarmoszuk, the head of the city’s Taxi and Limousine Commission, which oversees the industry, said during the news conference that she had already spoken with several lenders.

“I expect the lenders will participate,” said Ms. Heredia Jarmoszuk, who was appointed by the mayor last year in part to fix the crisis. “We believe this program is a win-win for everyone.”

Advocates for taxi drivers said they, too, expect lenders to participate. But they said that was because the plan was a windfall for the banks without helping the drivers.

“All that this plan is going to do is going to get immediate cash into the hands of the lenders, while the risk remains on the borrowers’s necks,” said Bhairavi Desai, the head of the Taxi Workers Alliance, which represents drivers. “This is absolutely a bailout — for the lenders. It does nothing to help the borrowers.”

Several members of the City Council also criticized the mayor’s plan, saying they had not been consulted before it was announced. Stephen Levin, a Brooklyn Democratic councilman who served on a task force that studied the issue last year, said the task force’s original plan would have provided much more relief at a lower cost.

That plan would have created a public-private partnership to raise money to help drivers.

“This is a huge missed opportunity,” Mr. Levin said. “But I am glad they are doing something.”

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