New York City's Latest Taxi Scam

Several weeks ago, furor mounted over a taxi fare scam in New York City. The situation calls for some perspective.  After a New York City physician complained about an overcharge of two dollars on a route he took constantly, the Taxi & Limousine Commission (TLC) began to examine trip records available through recently installed GPS machines.  This technology was installed three years ago to monitor the fares each cabby served every day.  Taxi cab drivers held two one-day work stoppages in the fall of 2007 in protest of the GPS machines.  On March 17, The New York Times editorialized that the GPS had become the savior of New Yorkers otherwise vulnerable to cabby rip-offs. As a result, cabdrivers, once beloved, are now viewed as untrustworthy

In the most recent scam, several thousand New York City cab drivers adjusted taxicab meters to charge out-of-town rates for mileage of in-town trips by purposefully punching the wrong button.  Over the past two years, the commission learned via the GPS that several thousand drivers, a number later inflated to over thirty thousand, overcharged $8,330,155 on 1.5 million trips, or an average of $4.45 per trip.  The number of trips accounts for only 0.5 percent of the 361 million taxi trips taken during the twenty-six month period the agency studied.  One student-driver was accused of hundreds of incidents of overcharging.  The commission announced that it would install an illuminated warning device on the video monitor in the taxi that the high rate is in effect. The light will remain on until the passenger punches it.

Has this revelation of the overcharging validated the use of GPS to monitor cabdriver behavior?  One’s immediate response is that any method to eliminate a rip-off is a good thing.  New Yorkers want to believe that drivers abide by municipally regulated rates.  As a public utility, taxicab fares should be adjusted according to the time of day or weather.  First instituted in 1907 to combat extortionate fares, the regulated taxi fare is viewed as much in the public interest as the subway and bus fares.  Taxi fares are set according to the mutual needs of New Yorkers and its taxicab drivers.

It turned out, however, that this scam turned out to be a much smaller affair.  The TLC admitted that the scheme probably involved just a few drivers and that most incorrect records were simply cabby mistakes.  The commission and the Times were unwilling to backtrack on the GPS and over the first weekend of April announced that the technology had produced the best forecasting ever about the optimal spots to get a cab.  There is now a phone app called CabSense which, after downloading, indicates the corners where the most taxis are available.  Tourists will value this, while veteran New Yorkers will already know where to go.  Admirers of the gee-whiz quality of the GPS should recall that the New York police department conducted several surveys in the twentieth century that produced similar results, without the intrusive, Big Brother qualities of the new technology.

Certainly the GPS has not improved relations between the city government and the cabbies.  Taxi drivers work in a system with multiple bosses.  Most labor for fleets or, increasingly, for broker firms that control hundreds of medallions.  Ultimately, all have to abide by the edicts of the Taxi and Limousine Commission, which sets rates and standards of performance.  Relations between the TLC and the cabbies are poor.  After the collapse of the story about the fare scam, the New York Daily News editorialized on March 24 that the outgoing chairman, Matthew Daus, had produced an urban legend and destroyed the good reputations of thousands of hack men.  The editorial noted that Daus was also responsible for the annoying television screens in the passenger area of the taxi and for the GPS that charges the cabbies each time it is being used.  Ergo, the cabbies are paying to be slandered.

David Yassky, a Princeton and Yale educated lawyer and local politico, is the new Commissioner of the TLC, replacing the hapless Daus.  What should he do to improve deteriorating relations with the cab drivers?  Rather than be dazzled by phone apps, he could examine the city’s historical relationship with the hack men.  Return to the issue of the fare abuse.  Overcharging has always been a good barometer of the relations between the city government and the cabbys, with the passengers caught in the middle.  In the 1920s, when the rate regulations were lifted, taxi fleets changed fares almost daily in a battle for survival, New Yorkers suffered from reckless driving, fare gouging, and streets choked with taxis desperate for fares.  Visitors to New York City suffered from ruthless cabbies in the 1970s and 1980s that charged unwary tourists extortionate fares for rides from JFK airport.  On one occasion in 1974, cabbies raised cash to reimburse a Parisian secretary who had been badly bilked on a ride from JFK.  The hack men even helped pursue the felonious cabby.  Over the years, New Yorkers have also hailed cabbies that returned coin and stamp collections, rare violins, cameras, and money to distraught fares.

Fare gouging invariably accompanies a period of poisoned labor relations.  Since 1979, hack men work under an onerous lease system that allows a livelihood only after a sizable fee is paid to a broker or the garage.  When I drove a cab in the 1970s, I worked under a commission system in which garages and drivers shared the day’s proceeds.  Broke at the start of my first day of work, I finished the day with seventy-five dollars in my pocket.  The garage paid for the taxi, maintenance and gasoline. Today, the cabdriver bears all expenses.  On a bad day, it is easy to work a twelve-hour shift and lose money.

Such a situation breeds cynicism and criminal opportunism.  In the past, great mayors such as Fiorello LaGuardia and Robert Wagner, Sr. recognizing that satisfied cabbies were good for the city, negotiated in good faith with the hack men, and continued outreach during tumult.  LaGuardia bargained with the cabbys in 1934 during a violent strike in which taxis were burned on Fifth Avenue and in Times Square.  Because of his hard work, the results were years of good relations between cabbies and the taxi-riding public.  Mayor Wagner spearheaded a drive to organize a cabdriver union in the 1960s and received ample support from the public.

For over a decade the Taxi Workers Alliance, headed by Bhairavi Desai, has strived to negotiate with the city government on bread-and-butter issues such as pensions, vacations, and health benefits.  Mayor Michael R. Bloomberg has stiff-armed the TWA. By sitting down with the TWA and working to improve their lot, Bloomberg and Yassky could improve relations between cabbies and their public.  That would stem overcharging much better than television screens in the back seat of the taxi and phone apps.  And it would avoid stigmatizing the cabbys.