Taxi cabs drivers waiting for a fare at Miami International Airport: Source: Miami Herald

Taxi cabs drivers waiting for a fare at Miami International Airport: Source: Miami Herald

Written by Leah Weston

If you follow local headlines at all, you may have noticed that Miami’s taxi system has been under intense scrutiny for the last few months. The media has cited a litany of complaints from residents and tourists alike about the conditions of cars, poor customer service, and the lack of credit card machines in taxis. At present, the Miami-Dade County Commission has several reform proposals on the table that would significantly change the for-hire transportation market. These changes include among them mandated credit card machines in all cabs servicing Miami International Airport and the Port of Miami, a sweeping reform program called “Ambassador Cabs” for those same two areas supported by Mayor Carlos Gimenez, and an overhaul of the limousine ordinance to make way for digital dispatch services like Uber to operate in Miami. Proponents of these ordinances argue that these are necessary reforms to bring Miami’s taxis into the 21st century.

What has been consistently absent from the coverage on this issue, however, is the voice of taxi drivers. Since the beginning of this summer, I have been a legal intern with the Community Justice Project of Florida Legal Services, which provides legal support to grassroots community organizations in Miami’s low-income communities.  My work here has exposed me to the incredible struggles of Miami’s taxi drivers, who are largely low-income immigrant workers, many of whom have families to support. Without meaningful improvements to the working conditions of taxi drivers, we cannot even begin to contemplate a 21st century taxi system in Miami.

In order to fully grasp the difficulties facing taxi drivers, it is important to understand how the industry actually functions. Our taxi system runs on a “medallion” system. A medallion is a for-hire license, which is required by the county in order to operate a taxi. Miami-Dade County sets a limited number of medallions in order to restrict the number of taxis that are on the streets at a given time. The County issues through a lottery a limited number of medallions based on population size for $25,000 each, though the price at which the County has sold these medallions has differed over the years. In addition, medallions may also be sold on the secondary market, which drives their value up tens of thousands of dollars higher. Due to limited supply, medallions have sold for as high as $400,000 on the secondary market. While some drivers own medallions, the majority are owned by absentee third party investors who have nothing to do with the taxi industry.

Passenger Service Companies (PSCs), or taxi companies—what we all know as Yellow Cab, Super Yellow, etc.—serve as the intermediary between drivers and medallion owners. Drivers are required to contract with PSCs in order to buy insurance. Most drivers must also lease a medallion through PSCs. While Miami-Dade County caps the fare a taxi driver may charge a passenger, state law prevents the County from regulating the amount PSCs can charge drivers to lease the medallions. As a result, drivers pay $500-$700 per week—a whopping $30,000 per year—to PSCs while sometimes making only a few dollars per hour. In addition to paying these exorbitant lease prices, drivers must purchase their cars and pay for gas, repairs and upgrades. Many have to work 16-hour days just to break even. When $30,000 per year goes to a Passenger Service Company, however, there is little left over for even basic necessities.

With that background in mind, it is crucial to consider how proposed changes to the taxi industry will affect drivers, who are already squeezed by Miami-Dade’s unfair regulatory framework. Consider, for example, the proposal to require a credit card machine in all taxis. As written, the proposed ordinance is silent on who bears the cost of installation and maintenance. The proposal also regulates the type of credit card machine all taxis must have—and, of course, it requires one of the most expensive kinds: a back-of-the-seat credit card machine. In addition, drivers will be barred from passing on credit card processing fees to passengers, which effectively lowers the fare they collect whenever passengers use their credit cards.

Mayor Gimenez’s proposal, sponsored by County Commissioner Jose “Pepe” Diaz, creating the “Ambassador Cabs” program is even more onerous on drivers. In addition to requiring a credit card machine, GPS, a Sun Pass, and a digital security camera, this program would require all taxis serving Miami International Airport and the Port of Miami to comply with strict vehicle requirements. Effectively, every taxi driver who serves the airport or seaport—the most important areas of business for taxis in Miami—would be forced to purchase a new car in order to be eligible for the program. Drivers are concerned that with the large sums they already are paying to taxi companies, they will not be able to afford the vehicle and technology upgrades required by this program, essentially giving an advantage to those individuals or entities who can afford such upgrades—medallion owners and taxi company owners—to operate in the most active hubs of taxicab business in Miami.

In the end, there is nothing wrong with having a more modern fleet of taxicabs. I welcome the convenience that credit card machines and other modern technologies offer. But the conversation about creating a 21st century transportation system must begin by eradicating medieval working conditions for drivers and taking into account the realities of the way the taxi industry works in Miami.

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3 Responses to Taxi Reform Starts with Better Working Conditions for Drivers

  1. ivo says:

    probably the first article i read that was not echoing the interests of medallion owners or trying to beef up the IPO of a west coast start up.

    The problem is not easy to solve. total deregulation could have adverse effect for drivers and users as well. Allowing a parallel system (Uber) while leaving the old one with its current vices doesn’t sound as a good idea.

    IANAL, but i have a proposal: the medallion should not be leased anymore, it has to be used directly by its owner or sold to whoever wants to operate it.

    If the rent seekers who have invested in them do not want to drive a cab (and i’m sure they don’t), then sell it to who wants to do it. Won’t they accept what drivers offer them? then return it to the County.

    That way the county keeps control on the size of the market, and the drivers became the real business owners.

    What about the PSCs? driver’s coops can provide the same service.

       2 likes

  2. three cheers. What an important aspect of this debate to go unmentioned, What is the actual reality of the taxi industry, as opposed to only the experience of the riders.

       0 likes

  3. Shahzad Khalid says:

    No article or ideas given to resolve drivers hardship. Medallion owners cab companies Uber all working for there own benefits to exploit drivers more. I am in taxi business more then 23 years. If Mayor or commissioners want to help drivers and this industry they have to address real issue which is exploitation of cab companies not to approve double amount of cabs such as Uber proposed currently fewer jobs and over whelming drivers. These real issues will be never addressed because its not in benefit of big shots those look to make money drivers always abused will be abused in future.

       1 likes

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