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Uber, lyft and other taxis

How the yellow cab went belly up: Uber has accelerated an economic crisis decades in the making



uber taxi new york

For 100 years, New York City cab drivers have served as “encyclopedias of the city.” They drive fares from home to work, to shopping, to train stations and airports.

Along the way, they have dispensed pearls of wisdom about life, jokes, political banter and commentary on restaurants, bars, films and plays. Taxis and their drivers are synonymous with New York’s image, appearing on the covers of every guidebook; they are featured in TV shows, film and novels about our town.

It’s always been a low-esteem, heart-breaking business, but over the generations, many cab drivers eked out a living and, following the American dream, managed to make a better life for his (or her) family. A series of ethnicities from Irish, Italian, Eastern European Jews, Puerto Rican, and now South Asians and Africans have used hacking it as to attempt to ascend the social ladder.

But the cab driver is now officially a threatened species. The explosion of app-based for-hire vehicles managed by deep-pocketed companies such as Uber, Lyft and Via has severely undercut the taxi business in New York, which is by far the biggest market in the United States.
Driver incomes have plunged, yellow cabs sit idle, and the value of the medallion, the tin permits attached to the car’s hood, giving it monopoly rights to picking up and discharging fares on the streets and at airports, has plunged from a recent high of over a million dollars to a hoped-for price of around $200,000 today.

Some, especially those who work or use Uber, Lyft and Via, will say the yellow cab’s demise is a good thing. I dissent.

Yellows’ flaws are many: They’re all but impossible to hail in the outer boroughs, often averse to picking up non-whites, hard to find on rainy days or at 5 p.m., commanded by drivers whose knowledge of English and the city’s geography was often suspect, the yellow cab seemed ripe for displacement.

As smartphones soared in popularity after 2008, fares found it so easy to tap an app and have a clean, new, up-brand car appear almost immediately. No cash was exchanged; for years, tips were not even allowed. Generally, Uber passengers earn more, are better educated, and are much younger. They enjoy summoning a ride by app, a motion similar to snapping one’s fingers or ringing a bell to call a servant rather than scrambling at the curb for a taxi.

You might look at the bright side and say, look at what innovation has gained us. I have a more pessimistic interpretation.

Initially, the gig economy seemed to promise freedom of work schedule and possibly huge incomes. At one point, Uber claimed its drivers made a median income of $90,000 per year, more than twice what the earnings of full-time cabbies.

But the gains were illusory. Uber steered new drivers into contracts with predatory leasing companies. Drivers who signed up for a new car frequently found that they had to work constantly to make payments.

Meantime, with the values of medallions cratering, yellow owner-operators and speculative investors alike paid the price. Retirement plans were in shambles; drivers were burdened with crushing loan payments.

At first, led by Mayor de Blasio, the city’s Taxi & Limousine Commission tried to halt the onslaught of for-hire vehicles, but relented and since 2014 has licensed over 50,000 for-hire vehicles.

Everyone now knows the results: streets clogged with for-hire vehicles and hyper-competition that has turned the entire industry, yellow and black car alike, into a race to the bottom.

The human costs are mounting. Yellow cab and livery drivers are committing suicide over the past year in despair over their rapidly declining fortunes and inability to break even despite long hours.

Recently I hailed an elderly owner-driver. He had put two children through college but now had to drive to make ends meet. Finally, with the cat out of the bag and scratching people in the face, the City Council and Taxi & Limousine Commission have turned to addressing the core problem: We have way too many drivers and not enough money to go around.

The Council is considering freezing the number of for-hire vehicles for up to a year, and potentially capping the total going forward, as well as mandating a minimum pay scale for Uber drivers.

Uber and Lyft seem to have a sense the jig is up: These two self-interested companies, with a combined valuation north of $80 billion, have even volunteered to set up a $100 million relief fund for aggrieved medallion owners. Meantime, lobbying groups including the NAACP are already petitioning the Council, arguing that permits for Uber promote racial equality in an industry that has historically snubbed black New Yorkers.
New York City’s most iconic industry is at a life-and-death crossroads. But to see the true roots of the conflict, we have to go further back than just a few years, when Uber and Lyft took to city streets.

The story begins in 1937, when Mayor Fiorello LaGuardia pushed through the Haas Act that created the medallion system. Cabbies who paid a $10 fee received a monopoly right to pick up and discharge fares in the city streets and transport depots, and wait in line at hack stands.

After some shakeouts, the number of medallions dropped to 11,800 and stayed there for decades. To get a medallion, fleets that employed the majority of them and the several thousand independent owner-drivers accepted city regulations governing fares, upkeep of the car and agreed to pick up anyone.

Court decisions after World War II granted owners of medallions the right to sell them for more than the original costs, as the value of a business. Returning veterans and long-term drivers made up a very stable workforce that became beloved to New Yorkers and the ever-rising numbers of tourists.

Cab drivers became the face of the average New Yorker; the medallion gave owners them a sense of security; fleet drivers saw the medallion as an aspiration.

But there were storm clouds on the horizon, as many cabbies struggled to make ends meet.

In the 1960s, sympathetic New Yorkers supported Mayor Robert Wagner, Jr.’s call for a taxi union that would help cabbies earn needed benefits. The AFL-CIO affiliate suffered immediate problems, however, when incoming Mayor John Lindsay expanded the number of part-timers in the industry.

Part-time drivers, including many students, artists and actors — you’ve seen the TV show “Taxi” — had to pay a nickel from each fare to support the union, without gaining any benefits from it. Resulting tensions undercut union strength in the turbulent 1970s.

The 1970s, widely regarded as one of New York City’s most difficult, was a time of widespread violence including violent attacks on cabbies, frequent fare increases and a serious shortage of drivers.

And so, in 1979, the City Council passed legislation allowing fleets to “lease” their cabs and medallions to drivers, who were no longer paid on a commission system used since the 1930s, but now became “independent contractors.”

That accelerated the unraveling. From that point forward, drivers consistently got the short end of the stick; many benefits accrued only to those who owned medallions. Fleets, which earned a steady flow of profits by renting their vehicles, abandoned Social Security, disability and unemployment payments and contributions into the union welfare fund.

Owner-drivers also gained the right to lease their cars and medallions, but they were the anomaly, not the norm.

By the mid-1980s leasing became the dominant method of employment, placing the onus of all costs on the driver. Drivers were allowed to increase their shifts from nine to 12 hours, a small consolation compared to the massive loss of benefits from the commission system and the union.

Within a decade, the industry experienced a nearly complete demographic turnover with new. immigrants from Asia an African replacing native-born Americans and older immigrants.

In the first decade of this century, medallion prices soared. Some regarded this increase as reflective of a secure investment, though that proved tragically false. There is also evidence of sub-prime lending underlying the purchase of many medallions.

So, long before the entry of Uber and Lyft into the marketplace, the walls were closing in on the yellows.

Today, cabbies lack any union representation and have virtually no power. Although the New York City Taxi Workers Alliance, headed by Bharavi Desai, has strived to ameliorate the plight of the cabbie, as independent contractors taxicab drivers are not eligible to bargain collectively.

No union means almost no rights for drivers. Recent studies by former city traffic commissioner Bruce Schaller and others have shown that lease hiring benefits only the fleets and other medallion owners.

Uber, Lyft, Via and the others didn’t invent their business model entirely; they have simply piggy-backed on the city’s labeling of cabbies as “independent contractors.”

Reversing the 1979 law that enabled leasing of cabs to drivers, establishing a minimum wage, or, better yet, setting a salary or set commission rate would immediately attract a more stable workforce, limit the “gig economy” and eliminate predatory operations such as Uber and Lyft.

The root of the problem is not the medallion system but lease-hiring. Do away with it and cabbies and for-hire drivers may finally begin to get back a fair shot at a living wage.

And until then, to deal with the Ubers and Lyfts and other for-hire vehicles that have accelerated the decline of a once-great industry, the city must cap the number of competitors who have flooded the streets and made the economics impossible for cabs and app-based vehicles alike. Otherwise, the chaos and human misery will only increase.


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Uber, lyft and other taxis

Uber and Lyft Drivers in Chicago Will Hold Rally to Protest Abuse and Low Wages




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Uber and Lyft drivers in Chicago will rally at O’Hare airport Monday in protest of abuses they have faced from riders as well as the low wages they receive from their work, the Chicago Sun-Times reported.

Organizers with the group Chicago Rideshare Advocates are working to organize the thousands of drivers across the city to demand better pay and working conditions. Last week the group rallied outside City Hall with a banner that read, “Uber/Lyft Stop Abusing Workers/Cities.”

Mattia Nanfria, a 41-year-old ride-share driver who also organizes with Chicago Rideshare Advocates said she has been propositioned and attacked by riders. She said that after reporting having problems with some riders, Uber didn’t seem to do much to address the issue. “For all I know, they did nothing, which is a little disturbing,” she said.
To make matters worse, Nanfria said there are some weeks when she makes less than the city’s minimum $12 hourly wage. “The weeks where I’m clearing $10 to $12 an hour, that’s what I lose sleep over,” Nanfria told the Sun-Times.

Chicago city officials have considered following New York’s lead and putting a cap on the number of ride-share vehicles in the city, which has quadrupled to nearly 66,000 drivers in the last three years, according to the Chicago Tribune. The Chicago Rideshare Associates are on board with capping the number of drivers, along with increasing wages and drivers’ safety.

“Nobody wants to ban Uber and Lyft. Nobody wants that,” Eli Martin, a co-organizer of Chicago Rideshare Advocates told the Sun-Times. “We all like this, we just have to make it work better.”
Both Uber and Lyft oppose the proposal for a license cap.

The surge in ride-sharing services in Chicago has hurt business for cab and taxi drivers, while also worsening working conditions for Uber and Lyft drivers.

Earlier this year, Uber’s CEO Dara Khosrowshahi suggested that New York City officials should impose a fee on ride-sharing apps to help taxi medallion owners facing financial burdens from the increase of ride-sharing services. But the New York Taxi Workers Alliance called the proposal “a slap in the face to struggling drivers and an attempt to get out of being regulated.”

Chicago officials have proposed raising the average wage for drivers, which is currently less than the minimum wage at $11.53 an hour after expenses.

The group will hold its rally at the O’Hare Transportation Network Providers’ parking lot from 7-10 p.m. on Monday.


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Uber, lyft and other taxis

More Than 100 Cars Damaged in NYC Mall Parking Garage Inferno; Suspect Arrested: NYPD




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Police have arrested a man in connection to a seven-alarm inferno that tore through a multi-level parking garage at Brooklyn’s Kings Plaza Shopping Center Monday, enveloping the entire area in thick smoke, engulfing more than 100 vehicles and leaving nearly two dozen people hurt.

Police say they’ve arrested Avon Stephens, 23, on an arson charge in the fire at a parking garage at the mall on Avenue U and Flatbush Avenue. A motive wasn’t clear, and details on an attorney for Stephens weren’t immediately available.
The fire call came in shortly before 9 a.m. Monday, and the blaze quickly escalated from a two-alarm to a four-alarm fire, then became a six-alarm inferno within an hour. By 11:15 a.m., it was a seven-alarm blaze. It was under control by noon.

Twenty-one people, 18 of them firefighters, suffered non-life-threatening injuries, mostly related to smoke inhalation and heat exhaustion. Four of the victims were taken to hospitals. Fire officials warned the patient total would likely rise.
A law enforcement source said 137 cars were damaged, and 70 of them were burned to their shells, many of them Mercedes.
The garage holds about 4,000 spaces and fire officials said 120 cars are normally stored there by a car dealership. There were some explosions from car tires burning; officials said there is no risk of collapse.

Citizen app video showed smoke spewing from the garage as bystanders crowded near emergency vehicles, seeking shelter from the shroud of smoke.
More than a half-dozen MTA bus lines were running with delays in the area because of the FDNY activity. The department said more than 200 of its members responded.

A mall spokesperson said to avoid the area until further notice. The plaza was closed, though officials said the fire did not extend to any stores.
Kings Plaza has more than 120 stores, including Macy’s, Best Buy, Sears, H&M, Michael Kors, Express and Foot Locker.

In 2013, it became the subject of a controversial order that temporarily banned people younger than 18 without the presence of an adult after hundreds of teens attacked patrons and vandalized the shopping center, forcing it to shut down.
No one was ultimately charged in that fray, nor was anyone hurt.


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Uber, lyft and other taxis

Council moves ahead on bills to help taxis




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After years of failing to address the fallout from an upended taxi industry, the City Council is trying to make up for lost time.

Just a month after leading the way to an unprecedented one-year cap on Uber and Lyft vehicles, the council’s for-hire vehicle committee was back in action today with a hearing on nine more bills.

Overall they’re aimed at addressing the economic plight of roughly 6,000 individual taxi-medallion owners and the wider pool of taxi and ride-hail drivers, who now number more than 185,000, up from 30,000 six years ago. The push for more legislation has been fueled by six suicides in the past year by drivers who grew desperate because of their circumstances—and by a sense that the ride-hail industry has lost the ability it once had to block legislation it didn’t like.

The bills include an effort to establish a task force to study medallion values and recommend policies to increase prices and one to ask the Taxi and Limousine Commission to set up a program to provide drivers with health care and other insurance benefits.
If the bills pass, however, it remains unclear when they would bring relief, what form that relief would take and how it would be paid for. The health benefits proposal calls for adding a surcharge to all taxi and for-hire vehicle fares—which would be in addition to a congestion-pricing surcharge ($2.50 for cabs, $2.75 for app-based services) that will go into effect Jan. 1.

Taxi and Limousine Commission chair Meera Joshi, who testified in support of the bills, said it would be better to find a funding mechanism that didn’t antagonize passengers. The FHV committee chair, Ruben Diaz Sr., also spoke up against the surcharge.

The TLC, which will be developing the rules and carrying out the legislation, also will need to find out exactly what the health insurance needs are for the vast majority of drivers.

“That will be a painstaking study,” Joshi said.

Other bills are aimed at fighting predatory practices by car-leasing operators. They would require the TLC to set a cap on costs, ensure consumer-protection practices and prevent leasing operators from making automatic deductions from drivers’ earnings.

Some medallion owners who blame the TLC for allowing Uber and Lyft to flourish declared that the raft of new bills wouldn’t do much good if Joshi remained in charge of developing and enforcing the regulations.

“In our view, there can be no remedy if the remedy and the implementation are left up to the current TLC regime, which is [composed] of leftovers from the Bloomberg administration,” said Carolyn Protz, a medallion owner, who read from a letter from the Taxi Medallion Owner Driver Association.

Joshi was, in fact, appointed by Mayor Bill de Blasio, and much of the regulatory structure that determined Uber and Lyft’s place in the TLC universe was already in place when she started in May 2014.
In an email, Protz pointed out that Joshi was the TLC’s deputy counsel during the Bloomberg administration and that other senior TLC officials are also Bloomberg alumni.


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