The Hidden Costs of Being a New York City Cabbie

by Christopher Paul on May 29, 2012

The NYC Taxi and Limousine Commission is considering a 20% rate hike for yellow cabs. But don’t think for a second that the increase in fare will help the driver; it only helps the leasing company:

“You see, in New York the vast majority of drivers don’t own their cabs. They rent them from taxi garages for as much as $133 for a single 12-hour shift. That’s money they must pay in cash, up front, before they even get the keys. They also must pay for gas out of their own pocket. Plus, a ”transit“ fee to the city. If they bring the car back late, it’s another $25. There’s also the occasional traffic and parking tickets, minor maintenance, cleaning up after drunks on a Saturday night, etc. They do get to keep the tips — unless you pay by credit card, in which case the payment company collects a 5 percent transaction fee, part of which goes to the cab companies. Finally, there are the other ”courtesy" fees (i.e., bribes) that they must fork over to keep garage owners happy if they want to get the best cars and shifts.

It adds up quickly. In the typical example offered in this cost breakdown by The New York Times’ Michael Grynbaum, $291 earned over the course of one shift is cut by more than half after expenses are covered. That’s before income taxes are paid. Because gas prices have doubled over that same span and other expense are also on the rise, the average income for cabbies has gone down in real terms since the last increase in 2004. When you in factor in inflation, they’ve taken a 25 percent pay cut in the last six years. Oh, and they have no benefits or sick leave and forget about workman’s comp if they get in an accident and are injured on the job."

And when the cost of the fares go up, so does the rate to rent the taxi for a shift. When Bloomberg introduced the TVs and mandatory credit card systems I read somewhere that tips were greater than those given by people use used cash. I certainly noticed a tried in my own behavior. Part of it is that they’ve eliminated the lower % rates (or made them hard to find) but the other part, for me, is that I’ve come to realize how hard the business is.

I can’t imagine what their quality of life is like. And yet taxis – the lack thereof, the fares, the attitude, the crazy driving, the occasional honking in gridlock traffic, still get more shit from anyone and everyone than I’ve ever encountered in this city. And I have a new found sympathy for them… unless they take me the long way.

via Brain Pickings

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