City on a Hill: Taxis, meet Teamsters

November 7, 2013

D.C. cab drivers are mad as hell, and they aren’t gonna take it anymore.

At least, that was the feeling that came out of reports of last week’s inaugural meeting of the D.C. Taxi Operators Association, an affiliate of Teamsters Local 992, on Oct. 29. The taxi drivers asked to join up with the storied transportation union to give them more leverage in negotiations with the D.C. Taxicab Commission (DCTC). The big sticking point is modernization policies mandated by the city.

Under the DCTC’s new regulations, each taxicab must have the same rooftop display that tells pedestrians whether or not they are for hire. They also must have a credit card reader and a new red and silver paint job. The deadline for all cabs to comply was last Friday, but many drivers have failed to meet the requirements. Only about 3500 of the 6500 taxis in the District have the new rooftop display, for example.


Drivers say they are in favor of modernization, and it’s easy to see why. Perennial D.C. taxi companies like Grand and Diamond have been battered by the entry of new, tech-savvy competitors like Uber into the market. Riders have long complained about unreliable cab service and a lack of coverage in poorer neighborhoods. Computer technology in the car also allows drivers to incorporate apps that locate and order taxis, breaking into the e-cab niche. The problem, as is often the case in D.C., is the implementation of the regulations.

The first issue is price. While the DCTC plans to raise cab fares to reimburse drivers for the modernization, drivers have to pay for the hardware upfront. That means cabbies who make $20,000 a year are having to shell out up to $700 dollars for the rooftop display alone. Costs are only compounded with the card reader and paint job.

On top of that, there has been a shortage of the needed hardware. The DCTC authorized eight payment service providers (PSPs) to sell credit card equipment to the taxi companies, but they quickly ran short of their stocks and raised prices in response. The same is true of the rooftop displays. The shortage has been so serious that the DCTC pushed back the deadline for implementation twice, but even the long delay has not allowed access for every driver.

Those who were either priced out of the market or couldn’t locate the needed equipment have now been forced off the streets, out of work because of the clumsy implementation of these rules. Some have elected to drive anyway, and have paid a steep price. As of Monday, over 25 cabs had already been towed for not having the correct roof display.

If all that weren’t bad enough, the PSPs aren’t always paying their drivers. The system is designed to work as follows: When you swipe your card in the cab, the payment service provider processes the transaction, takes a 2.5-3% fee, kicks a $0.25 surcharge to the DCTC, and transfers the rest of the money to the cab company and driver. As WAMU’s Martin DiCaro reported last week, three cab companies say that last step isn’t always happening, and that hundreds of drivers have lost entire days of income as a result.

While consumer reaction to the updates has been generally positive, it is clear that much went wrong in the contracting process for PSPs. One of them, U.S.A. Motors, cancelled its contract early last week because it installed faulty hardware and failed to pay over 900 drivers. Its entire business model collapsed soon after. Another PSP, Chicago-based Gleike Taximeters, is involved in multiple lawsuits with three cab companies over payment issues. All of them have had trouble keeping hardware in stock. Perhaps this shouldn’t be surprising given the track record of city contracting in the District, but it’s certainly an injustice to the hundreds of drivers who need their fees in ways most Georgetown students can only imagine.

But what may be worse is the DCTC’s implementation scheme overall, for it saddles the most cost on those who are least able to pay it. It’s easy to image a strategy that would have seen the DCTC raise rates a small amount over an extended period of time and then given the added revenue to drivers to pay for the modernization. Such a plan would have the same end result, but would avoid saddling drivers with a huge one-time debt.

Cabbies have been saying similar things for months, but have been unable to gain traction on the price front. Every driver I’ve talked to says the same thing—that the equipment is too expensive and that it takes away from essentials for their families. This new affiliation with the Teamsters isn’t about opposition to modernization. It’s about making modernization and other regulations work for both drivers and passengers, and in that way is a welcome addition to the labor family here in the nation’s capital.

Cab it out with  Gavin at

Gavin Bade
Gavin Bade is Managing Editor of The Georgetown Voice


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