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Before drivers think about how much they'll take home at the end of the day, they first worry about covering the daily debt: $150 to $190 per day over a 12-hour shift. Garages and brokers are paid upfront. Drivers hustle for every dollar thereafter. Earning back the lease is the foremost source of stress on the job. Drivers sacrifice health and body to the lease and driving patterns are determined by the debt of the lease.
Contextualize Lease Revenue Within Overall Industry Income
The lease is also the subject of the great taxi urban myth: the notion that for medallion owners, lease revenue is the main source of profit. Lease revenue outranks even medallion equity, so the legend goes. Advertising revenue, credit card processing, the float on the MTA tax and the credit cards, and revenue from dispatcher "tips" barely get an honorable mention.
What is uniquely the burden of drivers gets mythically recast as the unique savior of owners. In reality, owners monopolize all other revenue sources in the industry. The lease battle erupts because fare-generated revenue is the one source that they are forced to negotiate.
Prevent Fleet and Agent Overcharges: Close the Loopholes
The TLC must rectify loopholes in lease cap regulations in order to prevent future overcharges. Since 2004, taxi garages have been charging weekly drivers the daily rate. Agents have been adding on additional fees above the medallion-only lease cap and calling them "vehicle expenses."
Overcharging by Fleets
Weekly drivers have been forced to pay the daily rate, a difference of $69 - $186, even if they keep the car 24/7 with a partner and go to the garage only once a week to make a lease payment or collect their credit card balance.
Lease Cap overcharges when charging the Daily Rate for a Weekly Lease:
By this pattern, a night driver overcharged for half the year, 26 weeks, can suffer an astronomical $4,836 in loss of income. And that's just half of the year. The TLC must fulfill its regulatory duties and hold the fleets accountable to the weekly cap for weekly shifts. Leasing at daily rates means drivers work longer hours, burning fuel and exhausting themselves.
Overcharging by Agents
Agents (or "Brokers") have been charging DOV operators above and beyond the lease cap and calling the overcharges "vehicle expenses." All of the extra costs, meanwhile, are related to the medallion and thus in violation of the medallion-only lease cap.
- Additional Driver Fee (ADF): Agents limit the contract to only one driver. For the second shift driver, not permitted on the contract, the agent then charges an extra weekly fee that ranges between $50 to $100 per "additional" driver. The ADF punishes a driver who does not work all 24-hours, 7 days a week.
- Tax Stamp: The tax stamp, a tax on the medallion payable by medallion owners to the City of New York, has been passed down to drivers at a cost of $21 per week.
- Technology Fee for GPS and Credit Card Readers: While the TLC has regulated that the cost of the technologies should be a medallion owner expense, this too has been passed down to the drivers at a cost of $15 per week. The ad revenue is also not shared in return.
Along with these overcharges, drivers have been paying $42 more per week to have an agent finance the purchase of a hybrid. So, whereas fleet operators who own the vehicle are rewarded, driver vehicle owners who buy hybrid are punished. DOV operators are provided no information on the actual cost of the vehicle, hack-up and insurance - all pass-alongs as part of the vehicle financing.
NYTWA Proposal to Stop Fleet and Agent Overcharges
Fleets
- Differentiate between fleet day and night shift weekly cap
- Have one standard lease cap for shared car
- Regulate, "If lease for six shifts within a seven-day period is paid upfront, driver cannot be charged above the weekly rate."
- Driver cannot be arbitrarily denied shift if TLC and DMV license are valid, makes timely payments and pays for the week upfront.
Agents
- Promulgate clear language that agent cannot add or pass along medallion-related expenses to the driver above the medallion-only lease cap
- Eliminate $42 Hybrid Fee for DOV operators
- Require agents to provide copy of original bill of sales for the vehicle purchase, hack-up, insurance and any and all other vehicle-related pass-alongs
- Require agents to provide copies of all insurance claims and forward awarded claims no later than 7 days later
- Require agents to pass along to driver any breach of contract fees collected by the agent from the medallion owner if medallion is removed before the vehicle retirement
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