Is it possible to have too much of a good thing? Taxi drivers in one major city believe it is and say they are looking to swich jobs to make ends meet.
The issue has come to a head with Uber and Lyft drivers in New York City who say they are facing crippling debts just to keep their cars on the road – only to be taking home a fraction of what they used to earn.
In the city that never sleeps, the iconic yellow New York taxi was the holy grail for taxi drivers and virtually guaranteed a lucrative lifelong income. The coveted city-issued taxi medallion was the key to achieving success as a taxi driver and, as the New York Times reports, the permits were selling for up to $1 million in 2013.
The introduction of Uber in 2011 saw drivers who had been unable to afford medallions flock to join the ride-hailing service, which also allowed them to use their own cars. Huge interest from the public also saw a major slump in demand for the public hire yellow taxis, leaving drivers who were once secure to face financial ruin.
As well as offering incentives to join the new fleet of private hire vehicles which would serve the city, it was quicker and easier for drivers to get behind the wheel of an Uber of Lyft vehicle than borrow huge sums to run a yellow taxi.
As the New York Times reports, the taxi fleet heyday in the city was 10 years ago, when drivers could earn $700 to $800 a day working for Uber or Lyft. Now, drivers say they are lucky to take home $140 a day after the service fees charged by Uber and Lyft, along with government-imposed taxes and surcharges, taxi insurance, as well as the cost of soaring inflation.
This is even after the city introduced a minimum pay standard in 2018 for Uber and Lyft, as well as yellow cab drivers. As a result, next month will see all drivers receive their third wage rise since 2020.
The Taxi and Limousine Commission, which regulates private hire drivers such as Uber and Lyft, as well as public hire taxi drivers, said Uber and Lyft drivers now earn less in fares and tips than taxi drivers. It reported that in September, Uber and Lyft drivers earned an average $5,046, including $277 in tips, while those in taxis earned $5,844, including $865 in tips.
But Josh Gold, a spokesman for Uber, told the New York Times that its drivers “remain busy by any metric,” and that their earnings have “increased significantly in recent years”.
Uber points out that drivers now earn an average of $33.30 per hour before tips, up from $23.50 per hour in 2018.
But Ishtiaq Ahmed, 42, who works for Uber and Lyft, told the New York Times that he and his wife and four children who live in Brooklyn cannot afford to make ends meet.
He said that as well as his daily earnings falling from $800 10 years ago to $140 today, he has $30,000 worth of credit card debt, and owes thousands more to family and friends who helped him buy a car for the job.
While the pandemic has seen a drop in the number of taxi drivers serving New York City, some feel there are still too many for anyone to earn a good living.
The taxi commission reports that there are about 173,000 public hire drivers in the city, down from 204,000 in early 2020, and the number of private hire vehicles fell from 125,000 to about 100,000.
Taxi commissioner David Do told the New York Times: “There weren’t enough trips for everyone at the height of the pandemic, so drivers had to switch to other industries to make a living.” He said this resulted in “a major reduction and attrition in the numbers of drivers and vehicles.”
Transportation consultant and former taxi driver Samuel I. Schwartz said: “Too many cars on the street is like too many cooks in the kitchen. Everybody bumps into each other.”
What do you think?
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