The Hidden Costs of Being a New York City Cabbie
Riding in a New York City taxi cab may occasionally feel like highway robbery, but try not too get mad at the cabbie: he's kind of getting robbed, too.
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New Yorkers are a little on edge over the recent news that the city's Taxi and Limousine Commission is likely to raise the taxi rates by as much as 20 percent. Drivers and the cab companies have been lobbying for years for an increase, citing higher gas prices and other costs, however, but some drivers are not so sure they will see any of that extra cash. That's because every time the TLC raises rates, the cab owners raise the price the drivers must pay to use their cars.
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You see, in New York the vast majority of drivers don't own their cabs. They rent them from taxi garages for as much as $133 for a single 12-hour shift. That's money they must pay in cash, up front, before they even get the keys. They also must pay for gas out of their own pocket. Plus, a "transit" fee to the city. If they bring the car back late, it's another $25. There's also the occasional traffic and parking tickets, minor maintenance, cleaning up after drunks on a Saturday night, etc. They do get to keep the tips — unless you pay by credit card, in which case the payment company collects a 5 percent transaction fee, part of which goes to the cab companies. Finally, there are the other "courtesy" fees (i.e., bribes) that they must fork over to keep garage owners happy if they want to get the best cars and shifts.
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It adds up quickly. In the typical example offered in this cost breakdown by The New York Times' Michael Grynbaum, $291 earned over the course of one shift is cut by more than half after expenses are covered. That's before income taxes are paid. Because gas prices have doubled over that same span and other expense are also on the rise, the average income for cabbies has gone down in real terms since the last increase in 2004. When you in factor in inflation, they've taken a 25 percent pay cut in the last six years. Oh, and they have no benefits or sick leave and forget about workman's comp if they get in an accident and are injured on the job.
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All of that conspires to make the ultimate cabbie dream — buying your own medallion and going into business for yourself — all but impossible when the license to operate a cab, a medallion, themselves are going for $1 million. It's thankless, stressful work that frankly doesn't pay all that well. So try to at least try to keep that in mind when you're paying $60 for your next ride to the airport and be sure to to tip well. As long as the driver doesn't take the long way on the BQE, that is.
