Council Member David Yassky, chair of the Council’s Committee on Small Business, unveiled a new report on the state of taxi drivers under the current brokerage system, “Running on Empty: How taxi brokers in New York City are evading the lease caps at the expense of working drivers.”
Council Member Yassky was joined by Bhairavi Desai, executive director of the New York Taxi Workers Alliance, and dozens of hard working New York City taxi drivers at the press conference held on the steps of City Hall on Monday.
Currently, two out of five taxi drivers on the road lease their vehicles from licensed brokers, while the Taxi and Limousine Commission (TLC) does little to regulate this sector of the industry.
The absence of regulation has led brokers to circumvent an $800 per week medallion lease cap by charging drivers double the actual cost of the vehicle over the life of the standard contract.
According to the Taxi Workers Alliance, these biased contracts result in the average taxi driver working six to eight hours of every 12-hour shift to cover the costs associated with leasing the car and medallion for that shift.
“Currently, 40 percent of taxi drivers are being charged $38,000 for a vehicle that would cost $19,000 on the open market by licensed brokers who operate in a largely unregulated environment,” Council Member Yassky said.
“By circumventing the medallion lease cap through onerous fees and drastically overcharging for vehicles, licensed brokers are exploiting hard working New Yorkers who are already feeling strapped due to the economic crunch. The report we’re unveiling today will shine a light on these injustices, and lay out practical solutions to help solve the problem.”
“Taxi drivers are having their incomes gutted because the companies operate without any real regulatory oversight,” Taxi Workers Alliance executive director Bhairavi Desai said.
“Especially in these economic times and for workers without any health care or pension, we need regulations to protect drivers’ hard-earned incomes. If DOV operators were to go out of business, New Yorkers would be left without 40 percent of taxis on the roads.”
In addition to overcharging for vehicles, the report identifies several problems areas with the standard contract available to drivers through the brokerage system: no reasonable exit clause for the driver, unreasonable insurance provisions that put an undue burden on the driver, and the occurrence of brokers pulling medallions and vehicles from drivers during the life of a contract.
Drivers are subject to such inequities because they are largely independent contractors and have no collective bargaining ability, according to Yassky, as well as a lack of TLC regulation. To that end, the report recommends a uniform leasing contract with terms established by the TLC.
The report comes on the eve of the Taxi and Limousine Commission’s budget hearing on Thursday, March 26, during which the Commission will be asked to address the overcharging of drivers and to differentiate between hybrid and non-hybrid vehicle lease caps. Currently, there are more than 47,000 licensed taxi drivers in the City of New York.