Driven to Ruin

Posted by NYCYellowCabTaxi.com on March 8, 2018

Morning rush hour was in full swing, yet the deafening bang that came from Douglas Schifter’s vehicle cut through the noisy clamor of New Yorkers hustling to make it to work on time. Inside a rented Nissan sedan, the 61-year-old professional driver put the barrel end of a shotgun to his head and pulled the trigger at the eastern gate of City Hall.

It was a shot heard round the city, where drivers are increasingly feeling the pinch brought on by an influx of new ride-for-hire vehicles. With the taxi industry in the midst of transforming into an app-driven business, Schifter’s suicide was a call to respect the human behind the wheel.

“I cannot survive any longer with working 120 hours [a week]!,” Schifter, who had over 40 years of driving experience, wrote in a Feb. 5 Facebook post shortly before leaving this world. “I am not a Slave and I refuse to be one.”

Unable to make ends meet, despite living out of his car five days a week so as to always be on call, Schifter’s suicide also speaks to the wider dynamics at play between technology and capitalism and comes on the cusp of another wave of change set to transform transportation as we know it: the driverless car.

“It is too late for me so who is next?” Schifter asked.

He blamed Uber, Gov. Andrew Cuomo and two New York City mayors — Michael Bloomberg and Bill de Blasio — for destroying his livelihood. The three politicians played a decisive role in the deregulation of the taxi and livery industry in New York, making it harder for drivers like Schifter to get by. Cuomo and Bloomberg pushed more hacks onto the streets, while de Blasio has so far buckled under pressure from Uber and its competitors. He received more than half a million dollars in donations from the yellow cab companies during his first run for mayor, but once in office refused to place restrictions on app-based car services after Uber mounted a public campaign against regulation.

“He was trying to play catch up on a down-slide of the industry and I know he’s not alone,” Schifter’s brother, George, told The Indypendent. “That’s been his cause, to try and get people — the officials — to go ahead and understand the ramifications of their decision to flood the market [with ride-for-hire vehicles], to allow it to happen, in a state that has a tremendous capability of dealing out legislation, taxation and regulation, of making laws that can and do force the right thing to be done. In this case, they dropped the ball.”

Bloomberg’s Hit & Run

Under the direction of then-Mayor Bloomberg, the city began issuing 18,000 new taxi licenses in 2013. The introduction of the green-colored fleet of cabs was ostensibly done to provide greater taxi access to New Yorkers in the city’s outer boroughs, where rides for people of color were often hard to come by. But it certainly also fit under the rubric of Bloomberg’s free-market ideology. “I am going to fucking destroy your industry,” he reportedly quipped to Evgeny “Gene” Freidman, known once as the Taxi King for the numerous cabs under his domain. By allowing more cabs on the road, Bloomberg helped do just that. Uber and its doppelgangers finished the job.

There were 107,000 ride-for-hire vehicles on the city’s streets in 2017, more than a two-fold increase from when Bloomberg left office, while the number of traditional taxis has remained constant at about 14,000. Since the 1979 repeal of the Haas Act, which had prohibited the leasing of cabs, the taxi industry has increasingly relied on contract labor. Formerly designated as employees, most drivers now have to pay medallion-holding companies for the use of their vehicles, as well as shoulder the cost of gas and tolls. Uber has taken this business model and put it in hyperdrive, going as far as to force its drivers to pay sales and workers compensation taxes.

When Driving a Cab Paid Good Money

I drove a yellow cab for a year in the 1980s.

To work the night shift, you had to go into the garage for a “shapeup” at 1 or 2 in the afternoon and wait around until a cab became available, usually about two hours unless you bribed the dispatcher more than the usual $1.

We did 12-hour shifts, from jerking our way through rush-hour traffic to trying to out-hustle other cabs for the few fares out after midnight. We worked under the specter of being robbed, cruising in the wee hours with $200 in cash in your pocket and legally required to take strangers anywhere they wanted to go. But as a single man, I could make enough money to cover my rent, child support and rehearsal space for my band after working two or three nights a week.

We had a weak union, but we were still guaranteed a percentage of the meter revenue — 41 percent for beginners, eventually going up to 50 percent — plus tips and all of the 50-cent night surcharges after the first $4. A union official explained that this was the best system: If you were paid by the hour, there was not much incentive to work, but if you leased the cab, you’d lose money on a bad enough day.

Leasing was exactly what the industry was changing to: Drivers rented the cabs per shift and also had to pay for gas. If you had a spectacular day, like three round trips to Kennedy Airport in light traffic, you could make more money, but on a slow day, you’d clock less than minimum wage after expenses. Leasing also made cabbies independent contractors and the union an illegal price-fixing scheme. By the early 2010s, driving a cab on weeknights typically paid around $100 a shift — barely minimum wage, and only $10 or $20 more than I’d averaged 30 years earlier.

The arrival of Uber and other app-based services shattered the minimal market supports for cabbies’ incomes. In a system established after several occasionally violent strikes in the 1930s, the city caps the number of yellow cabs — those who can legally pick up street hails in the southern half of Manhattan — at about 14,000, to limit competition enough for drivers to make a living. But hailing cabs by smartphone is almost as instantaneous and often less chancy. The city now has some 100,000 “for-hire vehicles.”

Uber’s business model is to flood the streets, Bhairavi Desai of the New York Taxi Workers Alliance writes in this issue of The Indypendent. As it gets a percentage of each fare and drivers pay for their own cars and maintenance, it doesn’t matter to them how little drivers make.

And I now work in journalism, another industry where technology and the ruthless hands of the market have decimated workers’ incomes and job security.

— Steven Wishnia

Gov. Cuomo has come to Uber’s defense on more than one occasion, describing the company as “one of these great inventions, start-ups, of this new economy.” Last year, he signed legislation that granted Uber and other ride-share services license to operate statewide under the authority of the state Department of Motor Vehicles.

Meanwhile, the value of taxi medallions has plummeted. In 2013, a medallion cost $1 million. Today, they are commonly auctioned for less than $200,000. Medallion holders who borrowed heavily to purchase their licenses now find themselves holding worthless documents, undercut by Uber and its competitors and unable to capitalize on their investment.

Hedge funds, seeing an opportunity to sweep up the medallions at rock bottom prices, have been purchasing them in droves. In September, bidders with MGPE, Inc., a front company for an undisclosed out-of-state hedge fund, purchased 46 medallions at just $186,000 each. The medallions had belonged to Gene Freidman, the Taxi King himself, until Citibank foreclosed.

Hands Off the Wheel

Should Uber or Lyft, utilizing predatory pricing models and flush with venture capital cash, monopolize the taxi market, what’s to stop these multi-billion dollar companies from doing away with drivers all together? Nothing it seems, but their technological ability to do so — a roadblock that Uber, along with Alphabet-subsidiary Google and the big automakers are diligently working to lift.

‘It is too late for me so who is next?’

Proponents of driverless cars argue that they will be safer, particularly since 94 percent of all traffic accidents are caused by human error. They also contend that they will reduce time and fuel usage, given that driverless cars will be able travel closer together at constant speeds and without a lot of the fuel-guzzling hardware of traditional cars. “A million fewer people are going to die a year,” Uber’s former CEO, Travis Kalanick, told Business Insider in 2016, before he was forced to resign last year amid allegations he created a toxic work environment at the company and video of him screaming at an Uber driver went viral. “Traffic in all cities will be gone. Significantly reduced pollution and trillions of hours will be given back to people — quality of life goes way up.”

Uber also expects driverless cars to bump up its profit margins.

While safety claims remain to be tested, it is possible that by doing away with typical inhibitors to vehicular travel like fatigue and intoxication, automated cars might in fact lead to an increase in emissions. It is easy to imagine someone, unable to find a parking spot in Manhattan, sending their Tesla looping around the block while they sip a few cocktails in Soho, then, hopping back on board for the long ride back to Connecticut, which, hey, isn’t such a slog now that the automated driving system does all the work.

Then there is the question of technological control. Technologists have raised concerns that Google, a company that traffics in information and makes its money selling ads, has hopped into the driverless car space. What happens should your Waymo vehicle decide to take an unexpected route home, forcing you to stop at the store of a favored advertiser?

These dilemmas aside, what will happen to the humans? Specifically, the half-million taxi and rideshare drivers in the United States, not to mention the nation’s 3 million truck drivers? It’s a quandary borne of what Peter Frase, author of Four Futures: Life After Capitalism describes as the “automation anxiety endemic to industrial capitalism.”

From the cotton mills in 19th century England to the assembly lines in 1970s Detroit, “as long as there has been industrial capitalism, there has been that drive to economize on labor, to increase profits, to make more with less by needing fewer workers,” Frase told The Indy. “The question always, whether we’re talking about the Luddites or the automation of cars, is who benefits? Uber has driverless cars, who benefits from that? Is it the people who used to be taxi drivers or is it just the CEO and stockholders of Uber? It’s a political question and it’s a class question.”

Moving Right Along

Current laws governing automobile safety were written assuming humans are driving our cars and trucks, but perhaps not for long. New federal legislation intended to govern the deployment of driverless cars was approved with bipartisan support by the House of Representatives last fall. A similar measure received the approval of the Senate’s Commerce, Science, and Transportation Committee. Both pieces of legislation would grant the Department of Transportation the authority to preempt a patchwork of state laws governing automated vehicles and allow automakers to circumvent certain safety requirements like brake pedals.

Illustration by David Hollenbach.

The Trump administration is supportive of the new laws, though the Senate bill has been held up in the wider body due to concerns the exemptions it contains — lifting airbag requirements, for instance — are too broad. Sen. Ed Markey (D-Mass) has also raised the alarm that the Senate’s bill does little to protect consumer privacy or guard against the potential for cyber attacks.

Yet technology companies and auto manufacturers don’t anticipate these impediments will remain in place for long.

Ford Motors has plans to roll out a line of fully automated cars by 2021. Not to be outdone, General Motors filed a petition in January with the National Highway Traffic Safety Administration (NHTSA) through its subsidiary Cruise to grant it a waiver to federal safety standards in order to deploy 2,500 driverless cars as part of a rideshare program it expects to launch in San Francisco next year. The vehicles lack brake pedals or steering wheels, similar to cars already tested by Google’s Waymo at lower speeds.

‘This is why God created labor unions.’

NHTSA is reviewing General Motors’ application. If current driverless car legislation is approved on Capitol Hill, it will allow the agency to issue 100,000 such exemptions per automaker per year.

For its part, NHTSA doesn’t seem too keen on developing safety standards. Under the direction of Transportation Secretary Elaine Chao, it issued new guidelines for automated cars last year. The guidelines are voluntary. Echoing the mostly-bipartisan enthusiasm for the vehicles at the Detroit Auto Show earlier this year, Chao said her goal is to lift “barriers to the safe integration” driverless automobiles.

A former Secretary of Labor under George W. Bush, Chao had little to offer in the way of consolation for drivers whose jobs are at risk. “In the long run, new technologies will create different types of jobs, but the transition period can be very difficult for dislocated workers,” she said, before inviting people to a career fair staged by the Michigan Economic Development Corporation at the auto show.

Where are the brakes?

It’s not that driverless cars mean an immediate pink slip for America’s hacks, bus drivers and truckers. There will still be an intermediary period where a human will need to be on hand. Driving will simply require a different set of skills. Yet it is easy to imagine a day when an Uber arrives and the driver’s seat is empty.

“Obviously, there is going to be a transition period,” said Larry Willis, president of the AFL-CIO’s 32-union Transportation Trades Department. “But they’re not doing this because it is a ‘gee-that’s-really-neat’ concept. They’re doing this to save money, cut costs and build their profits. That’s what companies do, but that’s why God created labor unions.”

How Europe Took on Uber and Won

In the wake of Douglas Schifter’s suicide, the debt-strangled livery driver who took his life on Feb. 5, the time has come to make sense of the endless tragedy of American drivers’ exploitation.

The note left by Schifter on his Facebook page explains the reasons for his gesture and offers a lesson in democratic literacy: the situation is not going to change by itself, transformative action must be taken. “I know I am doing all I can,” reads Schifter’s note. “The rest is up to you. Wake up and resist!”

Despite the defeatist rhetoric of the U.S. media, the exploitative car-sharing industry can be beat. Let’s take a look at how this has been accomplished elsewhere in the world.

UberPOP, the service that can turn virtually anyone with a driving license into a professional driver, is illegal in most European countries. This victory over digital capitalism was crowned by the European Court of Justice on Dec. 20. Brussel’s magistrates ruled that Uber is “more than an intermediation service” and should be regulated as every other transport provider.

Several years of social uproar, however, were needed to counteract the deregulatory wave orchestrated by gig-economy lobbyists.

On June 20, 2015, France experienced a wave of Uber-inspired protests that featured overturned cars and tires set on fire from Marseille to Paris. U.S. pop singer Courtney Love was caught up in the unrest and tweeted her frustration, claiming to feel “safer in Bagdad.” On Jan. 27, 2016, a Paris court ordered Uber to pay 1.2 million euros($1.5 million) to a taxi union and in July of last year the company was found guilty by French court of starting an ‘illegal’ car service.

Riots rang through the streets of Rome, in Feb. 2017, where a coalition of cab driver organizations held protests for seven days. The uproar in Italy’s capital saw cherry bombs and clashes with police. A country-wide ban of all Uber services (including Uber Black, Lux, Suv, X, XL, Select and Van) was issued two months later. The Italian court decision, later thwarted by the company’s appeal, ruled that Uber constituted unfair competition among transportation services.

Several months before the European Court of Justice ruled that Uber is in fact a transport company subject to regulation and licensing by E.U. countries, authorities in London ruled in September 2017 that Uber is not a “fit and proper’”operator and announced that its license would not be renewed. A British employment tribunal followed that ruling by mandating Uber consider its drivers “workers” and not “independent contractors,” thus allowing them access to the minimum wage and holiday pay.

Indeed, it is on the very semantics of exploitation that digital capitalism is waging its class struggle. “I refuse to be a Slave,” declared Douglas Schifter in his last note. In a decade when Silicon Valley’s billionaires rewrite the English vocabulary to rebrand exploitation and disenfranchise workers, time is ripe to call out worker abuse, and to fight back.

— Federico di Pasqua

Willis wants any driverless car legislation Congress passes to exclude commercial vehicles. But in the long term, he knows he’s facing a challenge. Ultimately he says something similar to a federal trade adjustment assistance program that offers training and financial assistance to workers who have lost jobs due to cheap imports is called for — only one that is effective. In the past, he says, particularly after NAFTA, “trying to prove your job was impacted by trade was difficult, the benefits that workers received were limited and it just wasn’t really set up in a way to make sure there were jobs for those who were displaced really through no fault of their own.”

The call to save jobs, however, is a “defensive battle and it’s a losing battle,” says Peter Frase. “It’s pitting one set of workers against everyone else who can see this new technology coming along and will wonder, ‘Why are these people being such jerks and resisting it.’”

He compares the situation facing drivers to that of fast food workers who have fought through the national Fight for $15 campaign to raise wages. Critics, including numerous fast food franchises, warned them to pipe down with their demands, otherwise, they would be replaced by iPads at cash registers. Low and behold, touchpad technology is slowly being integrated into the service industry. Borrowing from the Danish sociologist Gøsta Esping-Andersen, Frase calls this the “decommodification of labor.”

“We live in a society where our labor and therefore our selves are a commodity,” Frase says. “Our access to a livelihood is dependent on our ability to sell our labor.” When our labor is decommodified by technology, demands for positive rights such as universal healthcare and the more recent concept of a universal basic income (UBI) become all the more crucial. Our right to exist and persist shouldn’t be contingent on our ability to work, especially as automation increasingly displaces our need to do so. Hence, rather than rallying to preserve jobs on the endangered species lists, Frase asserts the labor movement must push for strengthening the welfare state.

Frase cautions that UBI, the idea that everyone deserves a minimum stipend on which to live, has its limits, pointing out that under capitalism a large chunk of whatever is dolled out would likely go toward lining the pockets of landlords and others who control the necessities of life. But having less of a concern for where the next paycheck will arrive from could free up more time for political organizing, fighting for another system — that “Star Trek” future that is waiting for us.

In the interim, says the AFL-CIO’s Larry Willis, “We’ve looked at UBI. We’ve looked at what other nations have done and what we’ve done in this country to deal with shifts in the economy, but I think we should be focused on trying to create a good job market and good job opportunities. People want to work. They want to earn a living. That is engrained in the ethos of this country.”

This is reader-supported news. Make a contribution today!

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Photo (top): OFF-DUTY: Tariq, an NYC cab driver, takes a break from behind the wheel. Credit: Erin Sheridan.

16 thoughts on “Driven to Ruin”

Bella swan on March 11, 2018 at 5:04 am said:

sometimes i feel is cab right to use .
CreditCardCabbie on March 11, 2018 at 10:23 am said:

In decades cabdrivers are did one thing; driving a yellow cab, much as they could to make enough money to survive, and didn’t focus how to make things better, they believed the TLC will do that, because they are the ones who’s controlling everything in the taxi industry. Well, greed is out control, and as we know it TLC also to connected to other powerful group of people, that’s why $ 11 credit card processing free taken, doesn’t matter if you make only $40 dollars or 200, and how many of you take home $200 these days, and how many hours you work for that, and spit of seconds you could lose that, because cops are everywhere, and they are notorious about writing tickets. Cabbies sure they’re make mistakes, every human does that, even the president, but giving them a summons for just about anything (just ask any cabdriver about that!) cost well over $100 and up! And don’t forget, cabbies are working minimum 10 hours in the most congested and polluted (toxic fumes from every vehicles) city, and no stopping anytime, no restroom, no standing environment, and top of that, they have that most annoying taxi-TV in the back! Did I mention the slow credit card processing, and taxi apps?
Dean on March 11, 2018 at 9:58 pm said:

The worst commissioner in the history of NYC.
LYYFT on March 14, 2018 at 7:39 pm said:

LYFT IS TEAMING UP WITH AUTOMATIVE INDUSTRY GIANT, MAGNA DEVELOP SELF DRIVING CARS AND GETTING $200 MILLION …M G A – GM- GOOGL.
LYYFT on March 17, 2018 at 7:35 pm said:

LYFT TEST MONTHLY SUBSCRIPTION MODEL FOR ON DEMAND RIDES .THE PROGRAM PROVIDES UP TO 30 RIDES WORTH $15EACH .USING THE NORMAL RATES FOR $199 PER MONTH AND THERE’S A $399 PER MONTH VERSION FOR UP TO 60 RIDES.
gas on March 18, 2018 at 12:38 pm said:

hey larry take a look at the top of the page. YellowCabNYC.com. You are not my brother. You are a menace and that’s all.
LYYFT on March 18, 2018 at 1:11 pm said:

i am not looking for a brother . just telling the news what is your name
Dean on March 21, 2018 at 2:36 pm said:

Another NYC taxi owner committed suicide… For G-d sake stop this incompetent TLC Commissioner. She is a murderer.
Virgilio Carballo on April 23, 2018 at 10:29 pm said:

Who are all those corrupt and spineless NYS and NYC politicians who have taken political contributions from ride hailing companies and have caved in and shamelessly surrendered their souls by letting these leeches operate with immunity to the detriment, specially of individual taxi medallion owners? Montreal, Quebec, London and Austin Texas sided with the working people. So ride hailing companies are not invincible.
Dc Taxi on April 30, 2018 at 2:23 am said:

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Weekly driver on May 6, 2018 at 8:51 pm said:

NYTWA’ testimony at the Committee Hearing (Video)
https://youtu.be/kdfYbqkmfeI
David Pollack on May 17, 2018 at 3:57 pm said:

Love that you allow a car service to advertise here
Weekly driver on June 3, 2018 at 7:05 pm said:

What’s up taxi guys? Low energy, nothing to share, and cab driving is taking away your happiness? Nobody know what to do and how to make positive changes in the taxi industry? Are we communicating, are you guys really care? Waiting for the TLC to make miracles?
Tampa Airport Taxi on June 8, 2018 at 10:01 pm said:

Thanks for writing and sharing this blog.I really liked the way you have explained and emphasized on the need of content management online.The ingredients listed by you will be very helpful for me as i work for Brand management and Corporate communications at Synechron.
Edward Ng on September 11, 2019 at 8:53 pm said:

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Thomas on March 18, 2022 at 11:03 pm said:

Is anybody recording the fact that yellow cabs pay 2 to 3 times more than Uber and Lyft and congestion taxes per day. If someone could please notify the Post so we can figure out how much they’re stealing from the yellow cab business. By the way I mean New York State and city

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Driven to Ruin

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