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Taxi & Limousine Commission to Vote on Proposals

Taxi & Limousine Commission to Vote on Proposals

Bhairavi Desai of NYTWA at City HallJuly 12, 2012
By Marc Bussanich, LaborPress City Reporter
The New York Taxi Workers Alliance, on the steps of City Hall on Wednesday, June 11, implored the nine-member Taxi and Limousine Commission to vote on two sets of proposals on Thursday, June 12. The board will vote yea or nay to increase taxi fares by 17 percent and vote yea or nay to eliminate the five percent transaction fee drivers pay on every credit card fare and the tightening of loopholes that the alliance says enables taxi companies to overcharge on leases.

While private companies operate the city’s taxi fleet, the city government agency, TLC, is responsible for licensing and regulating the city’s taxi medallion (yellow) taxicabs, for-hire vehicles (community-based liveries and black cars), commuter vans, paratransit vehicles and certain luxury limousines. 

Bhairavi Desai, NYTWA’s President, said in an interview that the industry is made up of two types of operators. The traditional taxi fleets or garages straight-out lease vehicles and medallions to drivers. The leasing agents, the industry’s middlemen, lease medallions to drivers, but sell vehicles to drivers to transport passengers.

NYTWA membersOne serious problem facing today’s taxi drivers is that the agents charge high financing rates on the sale of a vehicle. Desai noted that drivers have purchased cars for, say, $30,000, but end up paying close to $60,000 for the vehicle because of the high finance rates. And the drivers, who decide to go through an agent for acquiring a vehicle (according to Desai, about 40 percent of drivers turn to agents because they at least have the opportunity to own a car as opposed to leasing from a traditional garage), also have to pay the agents the costs to own a medallion.

“While the TLC regulates and caps the medallion lease, it doesn’t regulate the vehicle portion of a driver’s expenses,” said Desai.

That’s why Thursday’s vote by the TLC board is so important because it’ll be the first attempt to regulate those expenses, according to Desai. If the board votes yea for a 17 percent fare increase, that’ll mean a pay raise for the city’s taxi drivers. But the raise will quickly be negated if the board doesn’t vote to regulate the vehicle expenses.

“If these charges aren’t regulated, then in a few months the agents will just start raising their leasing charges and claim they’re vehicle expenses that are not regulated by the TLC,” Desai said.

Desai emphasized that the alliance’s position is that every other segment of the industry is regulated—drivers and fleet owners—so why not the agents?

On whether the alliance is worried about a backlash from the riding public over the fare increase, Desai explained that there may be an initial drop in ridership, but it typically bounces back, as it did after the previous fare increase of 26 percent in 2004.

“But what is our choice?” she questioned. “The only way drivers are able to get a pay raise is via a fare increase.”

During the presser, Desai noted that while there has been criticism of the fare increase, what’s gone unnoticed is that small fleet operators are raking in more than $1 million in profit while 200-plus fleets are earning $7 million in profit, and that’s after operating expenses.

“We’re out here today to call on the TLC to vote on all the proposals before them. We not only need the fares to go up, but we need them also to vote yes on eliminating the 5 percent credit card fee and on stopping the rampant overcharges on the lease amount drivers pay to the companies. Although the TLC regulates the lease that taxi garages charge, over the past eight years the garages have been charging a daily rate to weekly drivers. And the agents have been charging usury financing rates,” Desai said.

Joining the taxi workers’ alliance was the city’s Central Labor Council President, Vincent Alvarez, who said, “These workers work in an extremely difficult industry. It’s dangerous. They face unsafe experiences that so many people don’t have to face when they go to work, despite getting no pay increase over the past six years. The unions of the central labor council and all working people around the city join with the alliance in this fight to make sure that the fare increases goes to the people that most deserve it—the drivers.”

Interestingly, in attendance at the presser was Michael Woloz of the Metropolitan Taxicab Board of Trade, an industry group lobbying the TLC fiercely to vote nay on regulating vehicle expenses. He said in an interview that the taxi companies haven’t seen an increase in leases in eight years.

“The companies in our association directly employs more than 1,000 workers—mechanics, dispatchers, carwash and gas attendants and tow truck operators. How are we supposed to maintain these 24/7 operations to provide quality service to drivers and the riding public if we don’t have the means to increase leases every so often,” said Woloz.

Another issue for the taxi workers alliance is the revenue split from roof and TV advertising. Desai noted that the question of a split never comes up, and at a recent public hearing when the TLC questioned the company owners present how much they earn from advertising, they said they didn’t know.

Woloz said that rooftop advertising has remained static for eight years, which doesn’t help the taxi companies to offset any of their costs. On TV advertising, he noted, “The taxi owners have all the responsibility on installing and maintaining the equipment and paying the monthly cellular fees.”

But when asked if he could provide an approximate amount of profit the owners derive from advertising, he said, “I don’t have a figure.”

“Can you provide a ballpark figure,” LaborPress asked.

“I don’t have a ballpark figure,” Woloz said.  

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