Ridesharing perpetuates ‘sweatshop on wheels’

A 2009 study discovered many taxi drivers earn as a little as $4.38 an hour. Ridesharing company drivers make even less. [Photo by Emily Jan]

A 2009 study discovered many taxi drivers earn as a little as $4.38 an hour. Ridesharing company drivers make even less. [Photo by Emily Jan]

Governor Quinn’s veto of legislation regulating rideshare companies has been acclaimed as an embrace of “innovation,” questioned as a neglect of consumer protection and explained as an act of pure politics.

But what does it mean for taxi drivers, who have been losing ground economically for years, squeezed by rising lease rates, gas prices and regulation?

By allowing an unlimited number of new drivers and vehicles in the market, it undermines drivers’ efforts to win a fare hike, said Peter Enger, organizer for the United Taxidrivers Community Council. The group was formed in 2007 and recently launched a drive to form a chapter of the National Taxi Workers Alliance, an AFL-CIO–affiliated union.

Drivers haven’t had a fare hike since 2005. Two years ago Mayor Emanuel overhauled taxi regulations and raised lease rates by 20 to 40 percent. But instead of raising fares, he made a $1 gas surcharge permanent.

To drivers that was a meaningless gesture, since the surcharge was in effect whenever gas went over $3.20 a gallon. It hasn’t cost less than that since 2010. Indeed, in recent years gas prices have often been $2 higher than they were when the surcharge was instituted.

A 2009 study by the University of Illinois found that cab drivers working average shifts of 13 hours earned as little as $4.38 an hour. The late Michael McConnell, executive director of the American Friends Service Committee (which supports UTCC), called taxis “sweatshops on wheels.”

And Emanuel’s new regulations added major costs for drivers — including raising maximum fines from $1,000 to $5,000, assessed in administrative courts with little due process — according to a recent study by Cab Drivers United, another union organizing effort.

Rideshare companies offer drivers the chance to work for less, Enger said. Drivers don’t have to pay cab leases, but they’re responsible for maintenance, which can add up, as well as their own insurance. Driving for Uber X, Enger said, “A fare that was $13 or $15, you’re getting $8, a short ride downtown with two or three businessmen that was $8 or $9, you’re getting $4.”

My friend Gersh Mayer, who’s driven for years, paid attention to the numbers when Quinn’s Republican challenger Bruce Rauner took Uber X from his downtown office to a south side event, to show his support for the company — in which, of course, Mayor Emanuel’s brother is an investor. “The whole ticket was less than $11, Uber X takes 20 percent of that, that’s about $8 to the car,” he said. A cabdriver would have earned $20 or more for the ride. (I drove one of Gersh’s livery cars for a couple of years in the 1990s before moving to a Checker Cab for another couple years.)

Uber X drivers have told Enger of trips from downtown to Aurora for which they got $38 — a two-and-a-half hour trip for which a cabdriver would get over $100 — and $118 for a trip from O’Hare to Milwaukee, and four-and-a-half hour trip that would earn a cabdriver $300.

Rideshare drivers don’t even know how much they’ll make until a trip is over, he said. “They have no rights, they have no say over what they make.” The company adds a 20 percent gratuity but charges a 20 percent commission on the total. (If you do the math — 20 percent of $12 is $2.40 — the company takes the entire tip plus 4 percent of the fare. That’s on top of a $1.50 charge to the customer.)

And if the company decides to cut fares to promote the service, it increases the commission it takes, Enger said. “How are you supposed to make a living?”

Rideshare companies purport to cater to part-time drivers, but they are aggressively courting cab drivers, he said. “They need a professional workforce if they’re going to survive.”

Quinn’s veto leaves in place new city rideshare regulations which Emanuel touted as “one of the most comprehensive ordinances in the nation.” But its two-tier structure creates huge loopholes, Mayer argues; one of the biggest is the lack of any limit on the number of vehicles and drivers. Not to mention questions about insurance coverage.

Enger points to Madison, Miami, and Austin, which have banned rideshare companies altogether. That’s a somewhat more “comprehensive” approach.

Enger says ultimately these operations will be banned. They’ve slipped into cities by portraying themselves as an entirely new business, but beside the phone apps they use, “they pick up passengers and take them to their destination and charge for the service,” he says. “That’s called a taxi.”

Before taxis were regulated in the 1930s, their excessive numbers created cut-throat competition and unsafe conditions, and “criminal elements” were pervasive in the industry, he said. Lately he’s seen guys in private cars swoop down on individuals leaving bars or parties, offering them a ride and waving a phone at them, saying they were “on Uber.” “It creates a huge opportunity for bad people to do bad things,” he said.

UTCC has a proposal that would support drivers, enhance safety and provide riders with the convenience of modern technology — a city-run phone app that would be required in every taxi and operated through a single citywide central dispatch system.

It would replace the outmoded radio systems now required by the city (a significant burden for small companies) and boost service in outlying areas and for people who use wheelchairs, he said. It would give neighborhood residents access to every one of the 7,000 taxis in the Chicago fleet. And people without smart phones or credit cards could phone in orders — which would be dispatched via the app — and pay cash.

And it would support a professional taxi industry in which drivers can make a living. Enger said city officials appear interested in the idea.

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