By Vania Andre
Gregory Mellon is used to the taxi and livery industry. Since his mid-20s, he’s navigated the landscape, dealing with some of the common pitfalls that cab drivers go through in the competitive, and at times, harsh driving industry. Unscrupulous cab dispatchers are prevalent, often bartering calls for cuts of the driver’s earnings, he says, and favoritism is rampant. Pay schedules are regularly ignored and unprofessionalism is “common.” “There’s a culture of unprofessionalism that exists in the black car service industry,” the 29-year-old Brooklyn native says. Now he splits his time between his car service and driving for Uber. “Uber is reliable. They pay when they say they’re going to pay; if there’s an issue, they notify you and most importantly, it’s fair across the board…no favoritism. ” For decades, large fleet companies such as Taxi Club Management have been a leading employer for those looking to drive for extra cash. The holding corporation has several companies that specialize in the NYC cab industry with 850 yellow taxis and 3,000 drivers—many of them Haitian immigrants. In fact, Haiti is listed in the top 5 countries of birth of taxi drivers, according to the Taxicab Fact Book. However, with the introduction of Uber, a ridesharing service that allows passengers to schedule pickups through an app, money and drivers are shifting from the old taxi model to one Mellon describes as “revolutionary.” Uber is displacing the old taxi business, Dr. Francois Pierre-Louis, author of “Haitians in New York City: Transnationalism and Hometown Associations,” says. It’s breaking up the monopoly and changing the business model to make it even more profitable for the drivers. Uber is driven by demand, and the demand is high. Regular taxi drivers make about $1,500 a week, while Uber drivers make about $3000 without having to deal with the “tyranny of TLC.” In the 1970s and 1980s there was an overwhelming number of Haitian immigrants joining the industry and buying up taxi medallions. The taxi business is an “ethnically-driven” industry, where a lot of people use it as a transitional job, he says. “Often times, recent immigrants had careers in Haiti, but once they immigrate to the states, they have to redo their education here; a move that can take years to complete and is expensive, despite having gone through it before. The cab industry offers stable income.”
The game changer
Many of the city’s drivers operate as “agents” or “unspecified drivers” for Taxi Livery Commission (TLC) recognized fleets. According to the Taxicab Fact Book, 45 percent of drivers fall into this category, while 41 percent drive vehicles leased by another driver. Under Uber’s model, those who don’t own a vehicle to work in are able to rent through the ridesharing company’s marketplace. Drivers make their own schedules and are given a company phone preloaded with the Uber car dispatch app. The application process is simple and straightforward. Interested drivers sign up online where they are asked to select their vehicle and driver type. Prospective drivers are then prompted to submit license, insurance and registration documents before consenting to a background check. Within two weeks the driver is on the road. The average UberX driver in New York makes about $91,000 a year, according to a statement from Uber. “At its current rate, the Uber platform is generating 20,000 new driver jobs every month.” “Uber addressed issues drivers and passengers had,” Mellon says. Typical grievances included unknown whereabouts of the driver, security concerns and average frustrations dealing with dispatch. Uber has been proactive in addressing these complaints with features such as the real-time map displaying the driver’s location, mandatory screenings and the dispatch app, he says. “It’s made the process comfortable.” Reviews on Yelp however suggest otherwise. The complaints range from inaccurate pick up times, rude drivers and costlier than expected rides. “I’m never using Uber again,” Tommy C . from Brooklyn posted on Yelp. “The ETA is not in the same ballpark as the actual time. Just got out of one and the driver was nasty when I asked him why the fair cost more than what a yellow cab usually charges me for the same trip…it’s supposed to be cheaper than a cab. I used to pay $15-17 for the same trip and was just charged $24 with Uber. On top of that, there’s no one to talk to and complain.” “Nothing beats the old reliable yellow cab,” he said. “They might not be perfect but you know what you’re getting, plus you can call 311 to make a complaint.” While the process has been “comfortable” for drivers on one end, it’s been a nightmare for others. It’s illegal and unfair, Bassett Cheriet, owner of a Long Island city taxi and limousine service for 13 years. TLC puts a lot of pressure on us to follow guidelines and safety procedures. We have to pay taxes, workers compensation, and insurance…we’re constantly subjected to hundreds of dollars in fines or tickets while doing our jobs. Uber doesn’t have to go through any of that. Cheriet doesn’t see a difference between the service his company offers and that of Uber. “We have an app. I send calls to drivers on the app all the time,” he says. “Uber says all they do is ‘connect’ drivers to passengers. Isn’t that what we do? A customer needs a driver, I connect him to one. The difference is all in semantics.”
The Loophole
The difference is more than in just the “semantics.” Uber “drivers” operate as independent contractors making them technically not employed by Uber; they work for themselves. This allows Uber to save money on employer-provided benefits, like unemployment compensation insurance and worker’s compensation. This decision on Uber’s part also reduces their exposure to lawsuits. “Employees have a wide array of rights under state and federal law–and therefore a variety of legal claims they can potentially bring against their employers for violating those rights,” according to a Forbes magazine article. “Because independent contractors are considered independent businesspeople, they are not protected by many of these laws.” The drivers’ independent worker status and their self-described role is the “loophole” that lets Uber differentiate itself from traditional car services. They aren’t a taxi service. They’re a company that connects taxi entrepreneurs with new clients. “They’ve found a loophole they’re exploiting,” Robert Bruno, a labor and politics professor at Illinois’ School of Labor & Employment Relations, says. The murky area is what you consider Uber to be. “Their use of technology is nothing more than deception. They’ve figured out a way for a private company to operate without government regulation.” Most cab drivers in New York are independent contractors, he says. As an independent contractor, a driver “attaches” himself to a bigger company that is a part of an industry that is government regulated. Uber describes itself as a technology company, giving them the power to operate in a government-regulated arena without having to abide by any of the rules. Uber generates income the same way these “affiliate” car companies do.
“If a driver is acting as a driver, travelling in the same space, charging a fee and receiving revenue, then Uber should be regulated like their counterparts,” Bruno says. “They want to operate without any control.” Uber isn’t the only company that’s caught on to this “loophole.” Companies like Lyft and Sidecar, both ridesharing services, are gaining traction in major cities and are too bypassing local taxi and livery guidelines. “I don’t think the last chapter of this story has been written,” Bruno says. “It takes time for the political system to grasp what’s happening and to in turn make modifications. There’ll be a back and forth for a while, most likely ending up with some form of regulation.” At the end of the day, the driving business is an entrepreneurial one, Uber driver, Mellon says. “You’re going to go where the money is. Uber is a reliable source of income; more than any other company I’ve ever worked for.”