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Taxi Drivers Win Pay Raise and Lease Caps

Taxi Drivers Win Pay Raise and Lease Caps

Taxicab workers listen to roll call voteJuly 13, 2012
By Marc Bussanich, LaborPress City Reporter
The New York Taxi Workers Alliance was the first association to enter the ranks of the AFL-CIO since the 1960s, and at a Taxi & Limousine Commission hearing on Thursday, July 12, all sectors of the taxi industry in the city will now be under regulation for the first time. It was a great victory for taxi drivers who have been struggling against fleet garages and leasing agents over the amount they pay for medallions and vehicle expenses.

The nine-member board, comprised of five commissioners selected by the City Council and the Council Speaker, and four appointed by the Mayor, voted in favor of a 17 percent fare increase by a count of six to two, with one abstention. In addition, the board voted, by a count of five to four, to cap leases on vehicles, which the alliance says the industry has been overcharging drivers for dubious charges for the past eight years. Also, the TLC board voted to create a health and disability fund out of six cents from every trip and the five percent transaction fee drivers have paid on every credit card fare will be replaced with a flat $10 fee per shift.   

David Yassky votes yes for fare increaseThe alliance characterized today’s victory in a press release as a victory of David winning against Goliath, but in the same breath, ironically, thanked Mayor Michael Bloomberg “for his unwavering support,” who recently was overruled by a State Supreme Court judge for stripping from the city’s Comptroller’s office the power to set prevailing wages for about 10,000 building trade workers working for the city.

Nonetheless, the alliance was grateful to the TLC’s Chairman, David Yassky, who said during a hearing at the TLC offices on 33 Beaver Street that it was time to raise fares for taxi rides so that taxi drivers can earn a livable wage. In his opening remarks, Yassky said, “We have been assigned the responsibility of setting the taxi fare. And that can be an uncomfortable responsibility for people like me who believe that market forces work rather than government setting prices by dictate. But I submit to you it’s the right thing to do.”  

Yassky justified his case, and vote, by saying that setting a price is a zero sum game because the seller always wants a lower price while the buyer always wants a higher price. He noted that, as uncomfortable as it is, it is the TLC’s job to set prices.

“We strictly limit the number of people who can own taxis (currently 13,247). Many more people want to drive taxis, and we know this because every day we see people trying to do it. Just last month alone, 684 vehicles were seized because drivers were transporting passengers illegally.”

Yassky highlighted drivers’ struggles when he noted that drivers’ salaries are being siphoned by rising gas prices and credit card processing fees.

“A driver today is taking home only $130 over a 12-hour shift. It’s time for a raise,” said Yassky.

The fare increase will increase a driver’s pay to about $170 during a 12-hour shift.

“Drivers aren’t going to get rich, but with the fare increase, they’ll earn enough at least to pay the rent and put food on the table,” said Yassky.  

Yassky also addressed what he said were concerns raised by the industry that the lease cap proposal equals a cut in revenue that will hurt them. 

“The current lease cap is $800 per week for a regular car and $842 per week for a hybrid. The rule before us changes it to $1,072 a week for a regular car and $1,114 for a hybrid. Someone might say it should be more, but you can’t honestly say that’s a cut.” 

The roll call for the fare increase, however, didn’t occur without a bit of drama and performance. Remarkably, Commissioner Frank Carone simultaneously argued that drivers deserved an increase, but questioned whether the TLC had the authority to grant a fare increase. He cited Section 2304, Part C of the City Charter as the basis for his argument (he said Section 5204, but that section doesn’t exist in the City Charter as amended through December 2009, 

Carone said, “The criteria I believe the commission must follow to consider whether a fare increase is warranted, and if so, how much, is the authority granted by [Section 2304] of the city charter. I tried to keep my mind focused on that section of the law so that I can make an objective determination on a very difficult vote. The press has framed the question of whether or not the drivers deserve a raise. However, the question is more of, is it a philosophical one or is it one that allows us the authority to make such a determination?”

He added, “So looking at [Section 2304], which governs this analysis, its not wether or not one segment of the industry deserves a raise. While that is extremely important and the answer to that is yes, of course. But looking at this objectively….I don’t believe the right criteria in its totality has been met. So my vote is no based on the grounds of [Section 2304].” 

Section 2304, Part C that Carone read during his speech reads:  

“In determining the rates of fare, the commission may consider all

facts which in its judgment have a bearing on a proper determination,
with due regard among other things to the time and distance of travel,
to the character of the service provided, to the gross revenues derived
from operation, to the net return derived from operation, to the
expenses of operation including the income of drivers or operators, to
the return upon capital actually expended and the necessity of making
reservations out of income for surplus and contingencies, to the number
of passengers transported, to the effect of fares upon the public and in
relation to the fares for other forms of public transportation, and to
the fares and practices with respect to similar services in other cities
of the United States.”

Commissioner Elias Arout, who, like Carone, said drivers deserved a raise, abstained because he feared that the current proposal will decrease the revenues of taxi fleets and that’s just not fair.

“The proposal to give everything to the drivers is lopsided and will backfire in the end by hurting drivers, owners and the riding public. I can’t vote against a fare increase because drivers deserve it, but I’m compelled to abstain on voting because the proposal is not fair and balanced.” Arout suggested that the Chairman “go back to the drawing board, get this right, get a fair lease cap package that I can vote on and I’m sure we can accomplish this over the summer and vote again in September.”  

NYTWA’s President, Bhairavi Desai, who wept with joy after the roll calls, said “Because of today’s vote, everybody in the industry will have to follow the rules, not just drivers. Today is a triumph for a workforce of 50,000 men and women who’ll realize that taxi workers will have a livable income and health disability fund, as well as a legal and equal right that will forever change the status quo in this industry for a better future for a new generation of drivers.”

In response to the taxi owners walking in and out of the room and walking in the hallways possibly trying to get the ear of commissioners before the votes, Desai said, “We just defeated the 1 percent. We don’t have their money, their lobbyists and public relations people. All we have is truth and justice and today is evidence that working people can still win in this society. The medallion lobby is one of the most powerful corporate lobbies in this city. We beat them fair and square.”

Michael Woloz of the Metropolitan Taxicab Board of Trade was OK with the fare increase vote, but none too happy with the vote on the lease cap.

“We’re pleased that drivers are getting a well-deserved pay increase, but we’re very disappointed with the lease cap vote. We feel that a lopsided proposal was passed today. We’re going to seriously look at our options moving forward.”

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