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Empty Cabs Force Drivers to Push for Wider Employment Benefits, Revised Pay

March 20, 2020

By Steve Wishnia

The COVID-19 coronavirus outbreak has dragged down driver wages 80- to 90-percent.

NEW YORK, N.Y.—A veteran cabbie might say, “there’s no money out there.”

With millions of city residents staying in and tourists’ travel curtailed by the coronavirus epidemic, taxi drivers’ incomes have collapsed, from yellow-cab owners to Uber and Lyft drivers. And as drivers are generally considered independent contractors, they don’t have most of the safety-net protections that regular employees do.

“It looks like revenue is down 70% to 80% for the people that are still driving,” Bhairavi Desai, head of the New York Taxi Workers Alliance, told LaborPress. “It’s abysmal, and it’s going to get worse before it gets better.” 

Most drivers are staying home, she says. Of the ones who are working, NYTWA says they are waiting as long as four hours to get a return fare from the city’s airports, and some yellow-cab drivers are booking less than $100 for a 12-hour shift—less than $8 an hour before expenses like gas and leasing or maintenance and car payments.

The union is proposing an ambitious list of measures to ease the epidemic’s effect on drivers. It includes expanding access to unemployment benefits, loans for owner-operators, eliminating surcharges or letting drivers keep them, and switching yellow-cab drivers from leasing the taxi to driving on commission.

Chief among them is getting unemployment compensation. In 2018, the state Department of Labor ruled that app-based and black-car drivers are eligible for benefits, and should be considered employees, not independent contractors, for that purpose. But drivers have to wait up to three months to be granted benefits, where most laid-off workers can get them in a week or so, Desai says.

Uber and Lyft have not been paying into the state’s unemployment compensation fund, and are not turning over payroll records when a driver applies, she explains. That means drivers have to send records in by mail and wait for the department to determine whether they’re eligible. 

“The law already covers them. It’s the agency that’s not processing the claims equally,” Desai says. “They already know these companies are continuing to misclassify drivers.”

“Multiple federal courts have deemed black-car drivers—which include Uber driver partners—to be independent contractors,” Uber spokesperson Harry Heartfield responds. The Labor Department must determine whether drivers are employees for purposes of unemployment insurance on a case-by-case basis, the company says.

Livery drivers and those who lease yellow or green cabs are not eligible for unemployment benefits, Desai says, but if the federal government declares a disaster, it would authorize the state to grant them.

“We are working night and day to weather the economic blows from this crisis, and are trying as hard as we can to make sure everyone gets paid,” Labor Department spokesperson Deanna Cohen said in a statement to LaborPress. “The current budget also does have a proposal to ensure more protections for gig economy workers and we are hopeful the legislature takes it up.” 

NYTWA also wants the city’s paid-sick-leave law extended to cab drivers and other gig-economy workers not covered. 

“What are they going to do when they get symptoms?” she asks. If they need the money, they won’t be able to stop working for 14 days to quarantine themselves.

If drivers are employees for purposes of collecting unemployment, logically they should also be for sick leave, Desai says. But this is a change that would probably be hard to win quickly enough to get immediate relief, she notes.

NYTWA’s other proposals include small-business loans for owner-operators; cancelling all mortgage debt over $150,000 and limiting payments to $900 a month; suspending the state’s $2.50 congestion-pricing surcharge for trips in central and lower Manhattan; and letting drivers keep the $2.80 per trip in other surcharges, 30 cents from the city and $2.50 to the state. 

A spokesperson for the city Taxi and Limousine Commission said that while jurisdiction over the surcharges was mixed, Commissioner Aloysee Heredia Jarmoszuk has said that everything is on the table. He said he could not give more details.

On Mar. 20, Uber and Lyft both announced that they would discontinue logging drivers off the app when demand is low, or if a driver turns down rides. NYTWA was urging the city to prohibit that practice, as it reduces the number of hours where the companies have to pay drivers the legal minimum wage. 

“Uber and Lyft’s decision to lift their restrictions on use is the right thing to do for our drivers,” Jarmoszuk said in a statement. 

NYTWA is also calling on fleet garages and brokers to suspend the system where drivers lease cabs per shift, and return to paying them on commission, at least temporarily. Until leasing took over in the early 1980s, standard practice was for drivers to make 41% to 50% of what they booked on the meter, plus tips and a share of surcharges.

It will take several months for the industry to recover, and during that time, Desai says, the risk shouldn’t be on drivers. Under the leasing system, yellow-cab drivers pay a maximum of $105 to $129 for a 12-hour shift, and also have to pay for gas. If they bring in $20 an hour, that works out to between $9.25 and $11.25 an hour before expenses, well below minimum wage. If they book only $100, they lose money.

Some garages are not charging drivers for leases, realizing that “this is the only way they’re going to get cars out,” she says. “If they continue with leasing, they’re not going to make any money. Drivers aren’t going to work for $5 an hour.”

Meanwhile, NYTWA is advising drivers to ensure they have enough to cover food, utilities, medicine, and phone and Internet service so they can keep going for the next two to three months. “The bigger bills are too big to worry about right now,” Desai says.

 “Drivers should not pay the price for this, especially in the middle of a public-health crisis and an economic meltdown,” she avers.

March 20, 2020

2 COMMENTS ON THIS POST To “Empty Cabs Force Drivers to Push for Wider Employment Benefits, Revised Pay”

  1. Mohammad s Bahar says:

    I am yellow cap driver, now very hard to live , government or state or city help us for living?

  2. Tamdin Tsewang says:

    Cap Divers need ui full benefit and health.
    Reduce and illiminate the congestion surcharge 2.50
    Immediately.

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