NYC Taxi Owners Are Denying Benefits to Drivers. The City Council Can Stop Them.

June 25, 2015

Earlier this month, the New York City Council enacted basic protections for workers at car washes, one group of exploited, largely immigrant workers. Next up on the City Council’s to-do list should be reversing a court decision that robbed taxi drivers, another group of mostly immigrant workers, of health and disability benefits.

New York City’s taxi drivers are one more group of workers who decades ago were legally considered employees but now are classified as independent contractors, with low and unpredictable wages, long work hours, and no benefits. Over the last two decades, taxi driving has become a career for many new immigrants.

Starting in 1996, drivers began organizing together, through the New York Taxi Workers Alliance, to win an increased share of cab fares and other protections. Two years ago, the Taxi Workers Alliance organized successfully to get the Taxi and Limousine Commission, which regulates the industry, to designate six cents from every cab ride to a fund to pay for disability and health benefits for drivers.

The Taxi Workers Alliance, through an RFP process, won a contract to set up a fund that would provide a modest disability payment of $350 for 26 weeks, plus other benefits, such as vision, dental, and hearing. Drivers would still be responsible for their own health insurance, with many relying on the Affordable Care Act.

Even though the fund does not cost the taxi owners a dime, they still sued to stop it, arguing that the commission overstepped its authority, and earlier this month a New York State appeals court agreed. As Bhairavi Desai, the Executive Director of the Taxi Worker Alliance, told me, the owners saw the health and disability fund “as a basis for the union…They were hell-bent on stopping the union and having the drivers have any benefits.”

An irony of the court’s ruling is that one reason that taxi drivers are considered to be independent contractors by the National Labor Relations Board (NLRB) is that they work in a highly regulated industry, in which many of their pay and working conditions are regulated by the Taxi and Limousine Commission. But when the commission acted to fund a much-needed benefit, the court, at the behest of the owners, blocked the way. The court said that it was up to a legislative body to decide on a new policy like using fares to finance a health and disability fund.

The other reason that the NLRB considers the drivers to be independent contractors is that they cruise for riders instead of being dispatched by the taxi companies. This in contrast with drivers of “black cars” in New York, who are dispatched by the limousine companies and therefore legally under their control. Some of the limousine drivers have joined the machinists union (IAMAW).

Looking into the future, competition from services like Uber may push New York’s cab companies to adopt an app for riders to call cabs. Earlier this month, the California Labor Commissioner’s office ruled that an Uber driver there was an employee, in part because of Uber’s reliance on apps.

For now, the court’s decision puts the issue squarely in front of the New York City Council. Since their election in 2013, both New York City Mayor Bill de Blasio and the new progressive majority on the council have made bolstering the ability of low-wage workers to care for and support their families a hallmark of their policies. One of their first actions was to strengthen a new law requiring that workers receive paid sick time. The new regulations establishing worker and environmental protections at car washes are the latest such action.

Laws that improve wages and benefits for New York’s working families are not only fair, they are a fundamental strategy to move New York’s economy forward. The more New Yorkers have the ability to care and support their families, the more New York will build a middle class that is the basis for strong communities and an economy not wholly dependent on Wall Street.

With some $2 million already collected and a contract with the Taxi Worker Alliance signed, passing an ordinance to approve using the six cents per fare for the health and disability fund should be an easy fix. But the taxi industry in New York is profitable and powerful and finances election campaigns. Still, that’s why New York City has public financing of campaigns and a pro-worker and pro-community mayor and City Council. Hopefully, they’ll quickly step up to the plate so that New York City’s taxi drivers can have their own organization provide essential benefits for their and their families’ health.