By Adam Dunn
This is the first part of a Cobrapost series on taxi drivers in New York by columnist Adam Dunn.
Market forces make strange bedfellows.
With gas prices swirling around $3 a gallon, two trade groups which do not normally see eye to eye—the League of Mutual Taxi Owners (LOMTO) and the New York Taxi Workers Alliance (NYTWA)—find themselves singing the same song.
A little ditty called “Gas Surcharge”.
Make no mistake—the two groups don’t work together, and it’s not clear whether they even like each other. But they have a common cause in lobbying the industry regulator, the Taxi and Limousine Commission (TLC), to take steps to alleviate the burden of runaway fuel prices on all taxi drivers, be they lease drivers or owner-operators.
Richard Kay, the CEO of Federal credit union no.1532 affiliated with LOMTO, summed up the situation. “On this particular issue, we have some common ground, because the gas situation affects all drivers the same way, no matter if they’re owner-drivers or lease drivers, it doesn’t make any difference,” he said. “The gas is paid for by the drivers in all cases. Every driver is affected the same way.”
LOMTO is an association of fleet owners. Its members, many of whom drive themselves or are retired drivers, own their medallions. The NYTWA represents drivers who lease their medallions through brokers or garages.
Needless to say, the NYTWA (which lobbies for driver benefits such as health insurance, which currently does not exist) does not always see things as LOMTO does.
Speaking on behalf of the NYTWA, Bhairavi Desai, the group’s director, put it this way: “We're glad to see that after years of fighting alone for drivers' rights. This time, we're being joined by LOMTO.”
But in recent weeks that tune’s been changing, and for once both groups are in the same key. On September 8th, at a spirited public hearing at the TLC offices on 40 Rector Street, the heads of both groups spoke as one to the commission—give drivers a $1 per-fare surcharge to offset the price of fuel as long it remains above $3 per gallon.
Note: both groups said drivers.
The fuel frenzy has effectively wiped out gains in take-home driver pay stemming from the 2004 fare increase, both groups say. The cost of gas is eroding what little income is left to drivers after their lease and maintenance costs.
Take the case of Javaid Tariq, for instance. Two nights ago, he handed off his taxi to his partner after clocking 95 miles on one shift. It cost him $36 to tank up; after making his required payments, Javaid went home with just under $30.
On the subway.
Drivers like Javaid bear the brunt of spiraling fuel costs.
At the TLC hearing, NYTWA members sat in a tense row. One driver held a
homemade sign that read: since 1996, cab
fares up less than 50%, gas prices up 300%!
The LOMTO crew was just behind them, looking no friendlier to the commissioners.
Vincent Sapone, LOMTO’s managing director, has called repeatedly for a surcharge. “Most cities already have a surcharge [for their taxi fleets], the liveries [black on-call radio cars] already have two surcharges, they don’t have to ask permission from the TLC,” he said. “Far’s I know, UPS has a surcharge. Fedex has a surcharge. The airlines have a surcharge. Trucking businesses are getting a surcharge. Why are we any different?
“The bottom line is, we have the lowest cab rates in the country, and our expenses are just as high if not higher, because demands are higher for both owners and drivers,” he continued. “A surcharge isn’t forever, it’s just until the gas gets down to a certain level…[Right now] it’s costing our guys $18-24 a day more.”
New York City would hardly be leading the way if it instituted the surcharge. According to a report published by the Associated Press this month, Washington, DC has instituted a $1.50 surcharge for the next four months. Philadelphia put in a thirty-cent-per-mile hike in July, and is mulling over another one now. Baltimore adopted a surcharge in June; Los Angeles will shortly adopt both a surcharge and a rate hike.
At the time of the hearing the TLC had three petitions for a surcharge including LOMTO’s, which predated Hurricane Katrina’s waltz through Gulf oil refineries. At the hearing itself he pressed the TLC for a surcharge to mediate volatile fuel prices for all drivers, not merely owner-operators.
The hubbub comes in the midst of another fuel-related issue: the introduction of hybrid vehicles into the taxi fleet. Under Intro 642, the TLC, in response to a mandate from the City Council, is giving owners a chance to do the introducing, at their cost. This cost is slightly offset by some Federal incentives. Additionally, a few of the medallions sold at auction recently went for a reduced price on the understanding they would be attached to hybrid vehicles.
On this issue too, LOMTO and NYTWA are performing a duet. This one’s called, “Surcharge NOW, Hybrids Later”.
While neither group is against making the yellow fleet a bit greener, both think the 642 plan is at best vaguely conceived and rushed. The most likely result will be the accruing of additional expenses from buying, equipping, and insuring the hybrids—expenses that will have to be passed on to customers.
“We don’t really have a problem with making it voluntary, what we’re concerned about is them making it mandatory until we know what we’re actually dealing with,” Kay said. “They’ve never been tested in a NYC taxicab market. Our experience, and the TLC’s experience, is that a taxicab needs to be a heavy-duty vehicle. That’s why the TLC has specifications for any vehicle that can be used as a taxicab that’s different from a regular passenger car.” The specifications, he added, seem to have been “waived” by the TLC in the interest of putting hybrid taxicabs on the street faster.
The surcharge is being touted by drivers and owners alike as the ideal solution for drivers and owners alike, not to mention customers. It could also be implemented a bit faster. The Chairman has 60 days after submission with which to review the petitions and decide whether to accept or reject them. If he accepts, it goes to the rest of the Commission for deliberation, and if they accept (following a public hearing) it would go into effect 30 days after publication in the City Record.
That sounds like a long time (LOMTO [and TWA?] would like to see it passed as an emergency measure, effective immediately), but it’s less than it would take to determine if the hybrids can function in a city taxi environment or not. Once again, owners and drivers agree, it could take months, even years, before adequate testing of hybrids as city taxicabs can be performed. A whole host of reasons have been cited, from how to fit the Lexan partition which separates drivers and passengers (and which is credited throughout the industry as greatly improving driver security) to the cost of stocking garages with parts for the new vehicles.
In the meantime, both groups agree, relief is needed right away, and immediate implementation of the surcharge is the key. With two months to go in this year’s hurricane season, another monster storm bearing down on the Refinery Riviera could easily send gasoline prices through the $5 per gallon speculators’ mark.
“What is this political baloney that, if it’s okay, we’re going to have to wait 90 days?” Sapone asked rhetorically.
There is a contingency measure in place to handle a sudden spike in fuel prices. Under its Charter [chapter 45 section 1043h], the city may enact an emergency surcharge effective immediately, for a period not longer than 60 days (though renewable based upon conditions at the time). This measure would at least enable drivers to avoid bankruptcy, a very real threat to those behind the wheel (particularly those paying off medallion leases and vehicles).
“If the political will was there, the TLC could pass a temporary surcharge tomorrow and then hold a hearing within 60 days to make it permanent,” Desai said. “It took the TLC eight years to decide that drivers needed a raise. They're used to dragging their feet on the backs of working people.”
The NYTWA is planning to publicly serenade the TLC about
this on Monday, October 3rd at 2:30pm. “It's no longer just about a
‘surcharge’, this is a question of drivers' dignity,” Desai said. “How
can Matthew Daus [the TLC chairman] be so
glib in telling working people that basically, they should just suck up the losses and their money is better spent
on the higher cost of fuel, rather than on their kids or rent? Because
those are the grim choices drivers are being forced to make.”
“We’re not looking to make a profit off the surcharge,” Kay said, “we’re just looking for a way to let the drivers break even…It’s pretty obvious that it’s costing these guys a lot more money for gas every day, and it’s not fair for them to have to take it out of their pockets.” Sapone, his colleague, concurred. “It’s not right what’s going on.”