(Above: TLC Chairman, David Yassky, comes to the Main Lot at LaGuardia Airport for a meet-and-greet with drivers, July 2010. Many express concern over the 5% they lose on every credit card fare.)
October 2011 marks four years since the Taxi and Limousine Commission orchestrated a system of wage cuts and hijacked incomes on the backs of 50,000+ licensed taxi drivers. Under the TLC's credit card system, drivers lose 5% of their income on all credit card fares, including the tip and toll, and wait up to several weeks to be reimbursed by the taxi garage or broker. They also have to contend with astronomic gas prices (drivers bear 100% of the fuel cost), a depleted ridership and a record-high saturation of taxis on the city streets.
We believe it is the right of all taxi drivers to become merchant account holders of their own credit card fares; essentially cutting the 5% wage cut and giving drivers the control over their own hard-earned incomes.
The 5% wage cut shifts even more costs on to the drivers.
• Drivers lose 5% on every credit card fare. Drivers bear the vast majority of operating expenses in the industry, and with the 5% they also bear a portion of the trip cost which historically has been borne by the passenger. For the first time in over 30 years of leasing, garages are profiting off of driver's labor above and beyond the lease-garage owners and technology vendors receive 3% of the credit card fare.
• In addition to the 5%, drivers must pay for the costs of the technology (GPS tracking software, video monitor, credit card reader, and text message box in front).
The 5% leaves drivers at the mercy of taxi companies and short on cash.
• Drivers are forced to depend on taxi companies for accounting and reimbursements, even though the companies are not certified financial institutions. If a garage says the transaction was cancelled and therefore the driver is not getting paid, there is no means for the driver to verify the fact or seek remedy.
• Even though the TLC-mandated GPS trip sheet will evidence the driver's identity, the completion of the trip and the fare amount, garages won't forward the income if the driver has misplaced the receipt--so the company just pockets the money. Many companies don't give cash reimbursements, only a "credit on the lease." This forces the driver to return repeatedly to the same garage/broker AND leaves drivers short on cash.
The 5% Heist underlies exploitative relationships in the industry and does nothing to relieve drivers' burdens.
Why We Need Taxi Drivers to Become Their Own Merchant Account Holders.
Drivers would no longer lose the full 5% to garages/brokers and the GPS technology vendors.
Drivers will have their hard-earned credit/debit card income transferred directly to their accounts.
Drivers won't have to wait for days or weeks for their income or have doubts about whether or not they were ever credited: the income will be ours within 24-48 hours.
Drivers will be able to choose the processor for the transaction-we could ask our own bank or credit card union and lower the interest rates or negotiate for better credit lines-and build interest on our own earnings.
This would help bring economic fairness to an otherwise corrupt and unjust system.
NYTWA Demands
In addition to each driver becoming their own merchant account holder and being able to choose their own bank processor, NYTWA is calling on the following amendments:
Allow Pre-Authorization Of Credit Card Transaction On All Flat Fares: Flat fares are set between the driver and the rider (they're not on the meter) and the trips are longer than intra-borough fares. If the credit card transaction fails for any reason, such as the card being over the limit or damaged or the signal fails, the driver takes a big loss with no chance of recovery or a return fare. By swiping the card at the start of the trip, the driver's income and the rider's integrity will be protected.
Require Signs in Backseat Warning the Passenger: Failure to Pay the Driver (even if the signal failed or card was declined) is Against the Law! Fare beating has always been a "cost of doing business" in our industry. In the past, when garages and drivers split the fare, the driver had some protections. Under leasing, however, the driver takes the whole loss. We are seeing that fare beating has been on the rise since the credit cards were introduced. Some riders think they don't have to pay if the reader malfunctions - they blame the driver even though drivers have ABSOLUTELY NO CONTROL over the credit card reader. Some riders also won't pay if the card is declined, again blaming the driver. A sign would reinforce the simple message that drivers have a right to be paid for their labor.
Protection against Lease Cap Increases! Already garages and brokers are charging above the TLC-regulated lease caps and collecting extra for the credit card reader or "technology" fees. We want protection against the garages increasing these costs to make up for losing their share of the 5% once taxi drivers are their own merchant account holders. The loopholes in the TLC lease cap rules need to be closed so that garages can no longer charge the daily rate for weekly shifts and brokers can't keep passing off medallion-related expenses as "vehicle costs."
