Cab drivers group drafts proposal to ‘level the playing field’ and regulate ride-shares in Chicago

 

Story and video by Camille Erickson

Ritesh C. Roshan, 27, has been a taxi driver for two years, but he is already looking for other employment. Idling at a taxi stand in front of the Fairmont Hotel in downtown Chicago on Aug. 13, he watched multiple cars bearing Uber logos pick up passengers in front of him.

“We have to wait hours,” he said. “We never know if it takes one hour, two hours, or three hours to get a fare. The business is slow.”

Roshan is among the many Chicago cab drivers who have seen their compensation drop in recent years. “We’re working a lot of hours and getting less money,” he said.

The influx of ride-shares like Lyft and Uber is to blame for the taxi industry’s financial decline, according to Fayez Khozindar, the executive director of The United Taxi Drivers Community Council (UTCC), an organization advocating for the rights of taxi drivers in Chicago.

The UTCC, determined to curb these companies’ seismic impact on the livelihood of taxi drivers, is calling on the city to level the playing field by increasing regulations on ride-shares.

They plan to present an eight-point proposal to Alderman Scott Waguespack, 32nd, who chairs the Progressive Reform Caucus of the Chicago City Council this fall.

As Khozindar sees it, since the boom in ride-shares, taxi drivers have experienced widespread financial devastation and even death, from suicide or the physical toll of longer hours.

UTCC director Fayez Khonzidar. Photo: Ankur Singh

“Whoever used to work 6 days a week, now works 7 days a week,” Khozindar said. “Whoever used to work 12 hours a day, now works 16 hours a day. They cannot see their families, they cannot have a social life. They have nothing.”

Crippling debt has driven at least five cab drivers to commit suicide over the course of five months in New York City. Khozindar sees the hardship hitting Chicago drivers too. The severe economic consequences have led to more strokes, heart attacks and other stress-related illness among the city’s taxi drivers, he said. “We have lost a lot of drivers here, but they pass away quietly,” said Khozindar.

At the top of the new proposal by the UTCC, organizers are calling for a limit on the number of ride-share drivers allowed in the city to mitigate the impact on taxi drivers’ business.

The number of active ride-share vehicles increased from 15,078 in March 2015 to 68,832 in December 2017, according to data obtained from the city’s Department of Business Affairs and Consumer Protection (BACP) by the Chicago Tribune this year.

Decreasing medallion value hits taxi drivers’ pockets

Like many major cities, Chicago requires taxi drivers to obtain medallions, or city-issued permits, in an effort to regulate the number of cabs on the roads. There are 6,999 medallions allowed in Chicago.

According to a 2017 report by Cab Drivers United, a taxi driver-led organization fighting for better working conditions, 61 percent of medallions are owned by cab companies and leased to drivers, while the remainder are owner-operated, or purchased by individual taxi drivers who operate their cabs like a small business.

The high demand for medallions coupled with their limited supply once made medallions valuable, until Uber and Lyft drivers entered the market

Fayez Khonzidar at UTCC office. Photo: Ankur Singh

Ride-shares can operate without medallions. The unchecked rise of ride-share drivers the past eight years in Chicago effectively disrupted the transportation industry and caused the value of the once-coveted medallion to plummet, said Khozindar.

In 2014, multiple medallions sold at auction for $375,000. But last month, a medallion sold for as low as $30,000, according to the city’s BACP.

“The medallion used to be a luxury thing to have, it was like a retirement ticket for the driver,” said Khozindar.

Drivers dedicated significant savings or acquired loans to purchase medallions to operate their own cabs, typically planning to later sell the medallions at a profit. Medallion owners now shoulder the debt from the purchase of the medallion and have little hope of reselling it at a profit.

Drivers or companies unable to keep up on loan payments risk having their medallion foreclosed upon. Out of 6,999 medallions in Chicago, 1,284 medallions are in foreclosure, according to BACP data from the city of Chicago data portal.

Increased competition from ride-shares also makes it harder for drivers leasing taxi cabs to make enough income to to afford regular payments to medallion owners.

“It’s terrible. There are a lot of people who have had to quit the business,” said Chris Chandler, a long-time spokesperson for UTCC and a taxi driver for 9 years. “It’s been a disaster and people are desperate.”

Michaelrush Nwanah, 20, is a community organizer at UTCC. His father is a retired taxi driver who sold his last medallion at a significant loss in 2013.

“[Medallions] used to be considered a pretty viable investment that people would base their entire lives on,” Nwanah explained. “It just went down the drain completely, and nobody did anything to protect that value.”

Nwanah is currently a student at University of Illinois at Chicago. He said many of his fellow students use Lyft and Uber, and don’t understand why cab rides are more expensive.

“I want them to realize that there is a cost that taxi drivers can’t control,” he said. “The money that [taxi drivers] make from every single drive, so little goes to them.”

Lease payments that drivers make to taxi companies for cars with medallions range from $74 a day to $707 a week, depending on the payment plan, according to the city’s BACP. In addition to lease payments, taxi drivers are subject to airport departure taxes and a ground transportation tax. The UTCC’s proposal asks that the city reduce these fees for the next three years. 

Legislators consider potential regulations

The UTCC was founded 10 years ago to respond to taxi drivers’ reports of systematic harassment, abuse and exploitative working conditions. Often, the group’s campaigns targeted the taxi companies who wielded significant power over drivers because of their access to medallions and the leasing of cabs.

“We’ve spent most of this energy in our organization against the cab companies when we started,” said Chandler. But since the proliferation of Uber and Lyft, “we’re collaborating with them.” While the prevalence of ride-share drivers is wreaking havoc on cab drivers, the medallion system is not a sustainable solution for drivers either, according to many drivers.

Thomas, 74, a taxi driver who declined to give his last name for fear of retaliation, struggles to keep up with his daily lease payments. He’s been driving for 9 years. On Aug. 13, Thomas started driving at 5:30 a.m. Over seven hours later, he had driven four customers and earned $80, just enough to cover his lease for the day, he said.

“Now, I got to try to make some money for me,” lamented Thomas, who says he works on average 75 hours a week. “It’s not good for me.”

Some taxi drivers have transitioned to Uber or Lyft only to find they still struggle to make sufficient income.

A 2018 study by the Economic Policy Institute found that nationally, Uber drivers make on average $11.77 an hour, after Uber takes its cut of about one-third of the fare. Chicago’s current minimum wage is $12 an hour.

“Uber doesn’t treat their drivers particularly well,” said Nwanah, “there aren’t any benefits and they treat their entire platform as a revolving door where drivers come and leave at the same pace.”

On Aug. 8, the New York City Council announced a one-year cap on ride-share drivers for the coming year as legislators consider potential regulations.

Chicago may follow suit. This month, Alderman Anthony Beale, 9th, and Alderman Edward Burke, 15th, announced plans to propose legislation in City Council this fall to regulate the number of ride-shares and set a minimum wage.

“We want to make sure drivers at least have enough money to put gas back in the tank,” Beale said over email. “There are no limits on the number of ride-share drivers, but there is on the number of cabs … We want to help level the playing field.”

To further UTCC’s ongoing mission of “being the voice of unheard drivers,” Khonzidar hopes the aldermen will implement their proposal into any upcoming legislation.

Featured photo: Taxi driver Razaq Akinwande. Photo by Camille Erickson.