Cab Companies Illegally Charged Drivers ‘Late Fees’

August 21, 2014
By Stephanie West

New York, NY – Attorney General Eric T. Schneiderman and Taxi and Limousine Commission (TLC) Commissioner Meera Joshi have announced that Yellow Cab SLS Jet Management Corp. (SLS Jet) has agreed to pay $1,387,500 in restitution to drivers who were illegally charged by the company, as well as $125,000 in penalties.

Under a separate agreement with the TLC, SLS Jet will also pay $125,000 plus $25,000 toward cost of monitoring compliance, for a total of $1.6 million in restitution and fines. SLS Jet is one of the fifteen largest medallion leasing agents in New York City, managing approximately 275 medallions.

"Every worker in New York deserves an honest day's pay for an honest day's work, and taxicab drivers are no exception," said Attorney General Schneiderman. "With most cabbies already struggling to make ends meet, our agreement will put money back in their pockets and prevent this company from cheating drivers out of their hard-earned wages. Working with Commissioner Joshi and the TLC, we will continue to vigorously enforce lease cap rules and ensure that all taxi companies follow the law and respect drivers' rights."

With the cost of a medallion averaging more than a million dollars, most taxicab drivers do not own the medallions associated with the taxis that they drive. Instead, drivers lease medallions, and often vehicles as well, from owners and leasing agents. New York taxicab drivers are generally not employees and are therefore usually not covered by minimum wage, overtime, or many other labor laws.

The TLC lease cap rules, among the few workplace protections for drivers, limit the dollar amount drivers may be charged for leasing medallions and taxicabs, in order to ensure a baseline level of take-home earnings for drivers.  The rules also strictly limit add-on charges that can be imposed upon drivers and limit the purposes for which charges may be assessed. Overcharges by owners or agents chisel away at drivers' limited income.

"The drivers who came forward are the heroes who forced cap enforcement practices in the industry," said Bhairavi Desai, Executive Director of the New York Taxi Workers Alliance.  "They took on retaliation and harassment in the name of justice and today they have triumphed.  We thank the leadership of AG Schneiderman and the Labor Bureau and TLC Chair Joshi and her prosecutors for staying the course and sending the message that drivers' economic rights will be protected."

August 20, 2014

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