DRIVERS DOMINATE JAN. 14 COUNCIL HEARING

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Sunday, 25 January 2009 21:10

DRIVERS DOMINATE COUNCIL HEARING ON CREDIT CARDS
Call for End to 5% Heist

January 14th @ City Hall: Drivers dominated the City Council Chambers, waving bright yellow “LIES!” signs as the TLC, garage owners and GPS vendors testified against a council bill supported by taxi drivers to fix the unfairness of the TLC’s credit card system where drivers lose major income. “On a good day, drivers lose 5% of their income, even on the tip and toll. On a bad day, they lose 100% of the fare,” said NYTWA Executive Director Bhairavi Desai.

Intro 705, introduced by City Council Finance Committee Chairman David Weprin (D-Queens) and supported by Council Transportation Committee Chairman John Liu (D-Queens) would allow every individual driver to become the account holder, overriding the TLC’s current rule which gives the right only to medallion owners.

Under the TLC, lease drivers—over 85% of the workforce—must depend on the garage or broker to collect their credit card incomes. So the money is delayed, not always guaranteed and drivers are charged a 5% surcharge. Owner-drivers, while they can be the account holder, must depend on the vendor’s bank for the processing. So they also pay extra surcharges for processing compared to other businesses.

By the end of the day, it was clear that drivers had won more council support, showed the urgency to pass the Intro and exposed the many financial hardships of the TLC’s credit card system, from long delays in getting paid, loss in fare due to system malfunctions and the minimum loss of 5% on every transaction, including on the tip and toll, and a constant shortage of cash in a cash-driven business. Councilman Garodnick expressed his support for pre-authorization on flat fares.

The TLC claimed letting drivers become the account holders would destroy the industry. They claimed that drivers would have to pay a $10,000 fee to allow for wireless transactions and that the vendors were offering the lowest rates available. TLC also testified that Intro 705 changes the terms of the contracts between the city and the vendors which is unconstitutional. The TLC could not answer Councilman Martinez’s question on why taxi drivers can’t be account holders the way local bodega owners are.

Drivers were both outraged and amused by the TLC’s large claims. “I know my broker doesn’t have to pay $10,000 even though he’s the account holder. So why would I as the driver?” laughed Beresford Simmons. Others asked how the TLC knew what the lowest rates were when they hadn’t given drivers the chance like other city’s drivers. Boston recently passed a regulation requiring the acceptance of credit cards but letting drivers be the account holder and make their own deals.

Garages, who the TLC take about 1.25% (of the 5% surcharge) for their “services,” said they are not making a profit and are losing money from the record keeping and extra staff. “If the poor garages are suffering so much, then why are they fighting to keep the system,” asked Osman Chowdhury. Drivers said there was a solution to the garages’ burdens: let us become the account holders!

“It is totally undemocratic how the TLC has done it,” said Balvinder Singh. “They want the companies to make a profit from our work.” Victor Salazar added, “As an owner-operator, I want my partner to have the same rights I do. I don’t want to control his money. That is his right.” Mr. Salazar added that he faces many problems in trying to solve problems with the GPS vendor and would have prefer dealing with his own bank which is a federally-regulated institution, not a TLC-contract holder.

The Transportation Committee public hearing was required by city charter in order for the Intro to move forward. Now, the committee must vote (at which time amendments can be made to change the original Intro) and then send it to the whole 51-member City Council for a vote. Once it passes the council, the Intro will go to the Mayor who has sixty days to sign or veto. If vetoed, the Intro would go back to the council where a 2/3 vote is needed to override a veto.

Councilmembers Liu and Weprin were joined by Transportation Committee members Daniel Garodnick, Miguel Martinez, Vincent Ignizio, Darlene Mealy, Diana Reyna, G. Oliver Koppell, and Jessica Lappin. TLC Chairman Mathew Daus did not come himself for the council grilling. Drivers were joined by Ed Ott, Executive Director of the one-million worker, four hundred union Central Labor Council.

Drivers pledged to continue the fight until 705 passes and a fair credit card system is in place.