Medallion system a heavy weight for cab drivers

Medallion system a heavy weight for cab drivers

Due to higher demand for ridesharing services such as Uber and Lyft, taxi drivers are losing out on a market they used to dominate.

That’s not the fault of the ridesharing phenomenon – it’s because the city won’t remove the shackles it places on drivers.

Chicago City Council passed an ordinance late last year that takes a Band-Aid approach to treating cab drivers more fairly. The city’s tactic was to get more involved in the taxi industry by creating a universal cab-hailing app, lowering lease rates and cutting fines, among other adjustments, according to Progress Illinois.

Cab drivers are still embroiled in a federal lawsuit against the city, which will inform us “whether Chicago’s ever-increasing regulation of its cab industry also makes the city liable for cabbies’ incomes,” according to WBEZ. “The gist of [the] complaint is that the city recently increased the maximum lease rate that cab companies can charge drivers to lease their vehicles, but it has kept meter rates the same.”

Instead of fighting for more government involvement, drivers would be better served by separating themselves from a city that has done nothing but cut into their earnings and restrict their profession.

Chicago’s existing taxi system makes it difficult for drivers to earn a living. The system revolves around the “medallion,” a permit issued by the city that a driver must own or lease to operate a cab.

These medallions don’t come cheap. In September 2013, the city of Chicago hosted an auction for 50 medallions and started the bidding at $360,000 a piece. On top of the money the city makes off of medallion sales, Chicago also gets a 5-20 percent cut each time a medallion is sold privately (that takeaway would range from $17,500-$70,000 on a $350,000 medallion).

The average cab driver can’t afford a price that steep. Of the nearly 7,000 taxis operating in the city, it’s estimated that only 2,000 are owned by independent taxi drivers. The rest of the drivers on the road are leasing the right to operate taxis using the remaining medallions, paying an average of about $500 per week.

Drivers also are on the hook for fuel, airport taxes and cab maintenance.

Before they even start the meter, drivers are already handicapped by the city’s arcane fare structure: $3.25 for the base rate, $1.80 for each additional mile, $2 for the airport departure/arrival tax, $50 vomit cleanup fee. These rates haven’t changed for years, though drivers say the leases they have to pay continue to increase.

The unfairness of this system is reflected in drivers’ wages. According to a study from the University of Illinois at Chicago’s School of Labor and Employment Relations, the average net annual income for a driver was $12,321. (However, another study commissioned by the city of Chicago found that taxi drivers make more than $12 an hour.), the website associated with the federal lawsuit against the city, opines that “For many years, Chicago taxi drivers have been mistreated and exploited by the City of Chicago government.”

They’re right. Drivers work hard to support their families, but they are forced to overcome steep odds to achieve their ends. The city owes it to these drivers to break down the barriers to earning a living as a cab driver, starting with the medallion system. Passengers deserve to be safe when riding in a cab – and drivers deserve the freedom to make a living behind the wheel.
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