Half of Chicago cabdrivers are earning less than the minimum wage — and more than ten percent are losing money — in a taxi industry that’s generating $30 million in annual city revenue.
Cabdriver Melissa Callahan presented that evidence Thursday in a “motion for summary judgment” that asks a federal judge to classify cabdrivers as city employees who must be paid the state’s $8.25-an-hour minimum wage — or higher if Mayor Rahm Emanuel follows through on his promise to propose a Chicago-only minimum wage increase.
The statistics on driver earnings come from a study conducted by Dr. Robert Bruno of the University of Illinois at Chicago and mirrors his findings five years ago. In fact, cabbies have been sinking further into poverty.
Bruno analyzed 34,392 subpoenaed electronic payment records — from taxi meters and credit card machines — for cabbies from three Chicago taxi affiliates over a three-month period ending in January.
He then deducted lease costs and gasoline expenses from his 2009 survey that have only gone up since then.
The bottom line is that drivers surveyed were earning anywhere from $6.49 per hour to $7.99. Half were earning less than the minimum wage of $8.25-an-hour. More than ten percent were losing money.
No matter how hard they worked or how good they were at their jobs, there was no way to earn a decent living. Not with the city regulating fares and freezing them since 2005 while saddling them with assorted costs.
“It’s pretty clear the city is in the taxi business. This isn’t someone who’s acting as a disinterested third party for public safety reasons. This is someone who is using their power to regulate taxi drivers in order to benefit from that and also in a way which impacts their income,” Sean Morales-Doyle, an attorney representing cabdrivers, told a City Hall news conference.
“The city is doing it to their own benefit — to the tune of $30 million-plus in a year — while drivers are earning below the minimum wage.”
The estimate of $30 million in annual city revenues from taxis includes the ground transportation tax; the airport departure tax; administrative fines and the sale and transfer of taxicab medallions.
Callahan pointed to the rules that strangle cabbies and saddle them with hefty fines.
“Discourtesy. Lack of proper attire. Obstruction of traffic. You can’t drop somebody off without getting a ticket a lot of the time,” she said.
“What I want is for the city to get out of the taxi business — to stop looking at us like we’re an ATM machine. We’re people who need to make a living,” Callahan said.
The class-action lawsuit, one of two filed by cabdrivers in recent years, seeks a declaratory judgment that drivers are employees — not independent contractors that must be paid the minimum wage.
It also seeks millions of dollars in damages and back pay for all persons who have worked as taxi drivers in Chicago over the last three years while paying the companies to lease their vehicles for $90-a-day and $500-a-week.
Chicago cab fares have been frozen since an 11.7 percent increase imposed by the City Council in 2005. The last increase before that — 16.6 percent — was approved in 2000 and tied to a controversial requirement that cabdrivers answer at least one radio call each day in underserved communities.
Emanuel’s 2012 taxicab reforms raised the lease rates that drivers pay by as much as 31 percent for the most fuel-efficient vehicles, but cabbies say they walked away virtually empty-handed.
The mayor’s only concession to drivers was to make the $1 fuel surcharge permanent and to fold it into the cost of entering a cab, known as the “flag pull.”
On Thursday, Morales-Doyle was asked whether a fare hike would be better than paying cabbies the minimum wage.
“Cabdrivers would love to see a fare hike. That’s not something the Illinois minimum wage law provides for, so that’s not what we’re asking for in our suit. But, one way the city could ensure that drivers make a fair living would be to raise the fare,” he said.