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TORONTO TAXIWORKERS Chapter of iTAXIWORKERS SUBMISSION TO THE CITY OF TORONTO 2012 TAXICAB INDUSTRY REVIEW FEBRUARY 27, 2012
TORONTO TAXIWORKERS Chapter of iTAXIWORKERS 25 Cecil St. Toronto, ON M5T 1N1 Phone: 416-597-6838 Fax: 416-597-2195 E-mail: firstname.lastname@example.org
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TABLE OF CONTENTS
ACKNOWLEDGMENTS ..................................................................................... v ABOUT THE iTAXIWORKERS.............................................................................1 DEMOGRAPHICS - WHO ARE TORONTO’S TAXI DRIVERS? ...............................3 INTRODUCTION - THE NEED FOR FURTHER CHANGE.......................................5 SUMMARY OF THE iTAXIWORKERS' PROPOSED REFORMS FOR TORONTO’S TAXI INDUSTRY................................................................................................9 HEALTH & SAFETY .........................................................................................13 LICENSING ISSUES .........................................................................................19 AGENTS & SUB-LEASING................................................................................35 SHIFT & LEASE RATES ....................................................................................39 TAXI STANDS .................................................................................................41 RELATIONSHIP BETWEEN DRIVERS, MLS & POLICE........................................45 BENEFIT FUND...............................................................................................47 TAXIS AS PUBLIC TRANSIT..............................................................................51 CONCLUSION - A WAY FORWARD FOR TORONTO’S TAXI INDUSTRY .............57
……………………………………………………………………………………………………………………………………….. The iTaxiworkers would like to thank all the taxi drivers of Toronto who participated in the preparation of these proposals. Their thoughtful ideas and contributions shared through meetings, surveys, and various working groups are reflected in this report. This report also reflects the invaluable contributions of numerous individuals and organizations that provided guidance, suggestions, research and administrative support. This report would not have been possible without the dedication and hard work of the following:
• • • • • •
Caitlin Gascon, MIRHR Candidate, University of Toronto Michael Halder, MES (Planning) Stephanie Ireland, MSc (Planning) Candidate, University of Toronto Kaitlin Nay, MIRHR Candidate, University of Toronto Jackie Edwards, United Steelworkers Mark Janson, United Steelworkers
ABOUT THE iTAXIWORKERS
……………………………………………………………………………………………………………………………………….. The iTaxiworkers Association is the latest installment in the long history of taxi drivers in the City of Toronto collectively advocating for justice and dignity in their profession. In 2009, taxi drivers came together to form the iTaxiworkers Association to improve the rights and working conditions of Ontario taxi workers. The iTaxiworkers brings together frontline taxi drivers with the aim to unite the many voices to reform the taxi industry so that drivers can make a decent living and come home safely to their families at the end of a shift. Support for the iTaxiworkers Association has grown steadily as members and drivers experience the value of the organization. Today, the iTaxiworkers is on track to represent close to 1,000 taxi drivers in Toronto and continues to provide legal defense, political advocacy and organize Toronto taxi drivers for justice and reform. Run by and for taxi drivers, support for the iTaxiworkers continues to grow as taxi drivers show their resolve to be organized and united in their quest for respect, equality, and fairness.
DEMOGRAPHICS WHO ARE TORONTO’S TAXI DRIVERS?
……………………………………………………………………………………………………………………………………….. Before examining Toronto's taxi industry, it is important to understand the city’s taxi drivers. The 2006 Census provides the following data on “Taxi and Limousine Drivers and Chauffeurs” in Toronto.1 • • • • • • • • • 11,055 total drivers 96% male, 4% female 63% of labour force between the ages of 35 and 54 81% are immigrants to Canada 73% are visible minorities 24% speak English as their mother tongue 44% work more than 50 hours per week 48.1 average hours worked in the reference week $11,949 is the median full year full-time employment income
These statistics clearly demonstrate that taxi drivers in Toronto work long hours for very little compensation. In contrast to the Toronto-wide median full-time full-year employment income of $45,350, half of Toronto taxi and limo drivers are earning less than $11,949 for a full year’s work. This median income implies an hourly wage of $4.782 compared to Ontario’s current general minimum wage rate of $10.25 per hour. In other words, taxi drivers earn less than half of the minimum wage to support their families. If we could separate the limo drivers out of this group, the taxi-only result would indeed be smaller still. Almost half of Toronto’s drivers are working more than 50 hours per week. In short, they are working hard to bring home poverty wages.
This is the smallest occupational data set available from Statistics Canada. It is worth noting that the number of taxi drivers in this classification would greatly outnumber the limousine chauffeurs, but the inclusion of chauffeurs would tend to increase average compensation.
The Census classifies “full-year” as 49 to 52 weeks and reports that more than half of full-time drivers worked more than 50 hours per week. $11,949/50 weeks/50 hours = $4.78/hour.
And “home” does indeed matter to these drivers. As the statistics show, the vast majority of drivers are in the age bracket where they are likely to have dependent children. An iTaxiworkers survey3 indicated that many drivers have large families who depend on their earnings. Of surveyed drivers, an average of 4.5 people depend on a driver’s earnings. In addition to low income, over 80% of taxi drivers in Toronto are immigrants to this country. The challenges faced by new Canadians in their political, economic and social lives have been well documented. Any reform of the taxi industry should take a holistic approach and consider the various dimensions of a taxi driver’s life.
In the summer of 2011, the iTaxiworkers conducted a survey of Toronto’s taxi drivers, both members and non-members. Two hundred and sixty-one surveys were completed through meetings and on the street outreach.
INTRODUCTION THE NEED FOR FURTHER CHANGE
……………………………………………………………………………………………………………………………………….. “The taxi is often the largest employer in an urban community and will touch the lives of a significant proportion of a city’s population.”
- James Cooper, Ray Mundy, John Nelson, Taxi!: urban economies and the social and transport impacts of the taxicab, 2010
“The more the working conditions of the taxi industry are improved, the more chance of the industry attracting the type of driver who will give improved service.”
- Mel Lastman, Report on the Metropolitan Toronto Taxi Cab Industry to Metro Legislation Committee, January 22, 1975
“The taxi driver is the most important part of the taxi industry, and if he or she works for low pay in poor conditions, the people of Toronto cannot expect an efficient taxi industry.”
- Brief submitted to the City by the Toronto Union of Taxi Employees, November 20, 1973
“Low driver incomes attract low quality drivers into the industry and reduce the quality of the taxi service.”
- Taxicab regulation in Metropolitan Toronto: A Background Paper Prepared for the Metropolitan Licensing Commission, by Bruce Chapman, 1994
“The ability of a driver to generate income can have a direct affect on how a driver relates to the public and takes pride in providing safe and comfortable transportation.”
- Report to Review the Toronto Taxi Industry, Toronto Task Force to Review the Taxi Industry, October 1998
For decades, the City of Toronto has made genuine efforts to improve its taxi industry. Consultations, special reports and fact-finding efforts have brought about changes that have reshaped the industry – in many cases, for the betterment of all. The 1998 Task Force to Review the Taxi Industry (1998 Task Force) focused on the consumer with its main goal to improve customer service. Taxi driver groups supported and we continue to support this goal. Our members work long hours doing dangerous
work for very little reward, yet they still manage to serve their customers with a smile. Of the millions of taxi rides taken each year in Toronto, the City receives few customer complaints. Managing to provide a high level of customer service despite overwhelming challenges is proof of drivers’ commitment to serving customers well. Despite all the positive outcomes of the 1998 Task Force, taxi drivers – an integral stakeholder group in the industry – were largely overlooked. For example, the City mandated the creation of a Taxicab Passenger’s Bill of Rights, but no corresponding document for taxi drivers. We have had 14 years to evaluate the changes arising from the 1998 Task Force. Our experience represents 14 years of frontline, on-the-ground knowledge that should be invaluable to this consultation. We share the desire for a taxi industry that benefits all of its stakeholders. However, we feel that the current system disadvantages drivers in some significant ways. And when drivers are disadvantaged, the entire system suffers. We recognize that the City of Toronto does not employ the thousands of taxi drivers who work within its borders. Drivers work within a complicated system of ownership, leasing and rental arrangements, typically as self-employed drivers. However, we do recognize that the City exerts unilateral control over the legislation and licensing policies that are enormously influential in determining what kind of working realities Toronto taxi drivers face. The City of Toronto is continually striving to be recognized as a world-class city, with efficient and modern infrastructure. A clear goal of the 1998 Task Force was to re-brand the city’s taxi industry, so that taxis would become part of the city’s image, similar to London’s black cabs or New York’s yellow cabs. The iTaxiworkers support this broad goal, as the taxi industry is a key component of any modern city. Taxi drivers perform an essential, frontline service that directly impacts the day-to-day lives of millions of residents and visitors to the Toronto area. As taxi drivers comprise one of the city’s largest professions, we believe our industry is critically important in making our city work well. This submission contains 14 recommendations the iTaxiworkers have developed through a lengthy democratic process. Our policy development process involved an extensive driver survey, data collection from the City of Toronto’s Municipal Licensing and Standards
Division (MLS), extensive review of academic and think-tank studies, working groups with industry stakeholders, many open-floor meetings with our members and non-member taxi drivers, “best practices” discussions with taxi driver groups in other cities, and several rounds of membership approval of the proposals. Our proposals have been refined, critically examined and discussed countless times. They address such topics as: health and safety, licensing, the role of agents, lease rates, and taxi stands. We are confident that our proposals provide a coherent, creative and evidence-based roadmap for a better taxi industry in Toronto. The fundamental principles uniting these proposals are the iTaxiworkers’ position that the industry will be of greater benefit to the city when its taxi drivers are economically, physically and psychologically secure. The link between working conditions and customer service is strong. Making the industry better for drivers will make it better for passengers, which will benefit the city at large. The announcement of this consultation process has given Toronto taxi drivers hope that their grievances will be heard and addressed. We thank the City for beginning this process and welcome the opportunity to participate in it.
SUMMARY OF THE iTAXIWORKERS’ PROPOSED REFORMS FOR TORONTO’S TAXI INDUSTRY
……………………………………………………………………………………………………………………………………….. HEALTH AND SAFETY 1. Establish a permanent task force including taxi drivers, police, industry stakeholders and health practitioners to address driver’s health and safety. LICENSING ISSUES 2. There should be only one kind of taxicab owner’s licence. W, Ambassador and Standard plate holders should be converted to one standard plate. Conversion to the standard plate will be contingent on the existing W and Ambassador plate holders paying a $5,000 fee. The taxicab owner’s licence should have the following properties: a) Each owner’s licence must be in the name of a licensed taxicab driver, b) A licence owner may employ an additional driver to drive the owner’s taxicab; a second driver may be hired in the event of sickness or injury, c) Licence owners may not employ agents or any other people except the additional driver, d) By-laws describing taxicab licences are amended so that the licences become property that banks and other agencies are willing to finance.
3. An individual may not own more than one taxicab owner’s licence. 4. A taxicab owner’s licence shall be transferable whether or not it is attached to a vehicle.
5. A plate can only be sold to those on the waiting list that have been licensed and driving a taxicab in the City of Toronto full-time for three years. 6. Corporations that presently own taxicab licences have two years within which to transfer their licences to individuals who meet all of the above requirements. If any corporate owners fail to meet these requirements within two years, their taxicab licences should be revoked by the City and reissued to drivers on the list. 7. Present owners of more than one taxicab licence have two years within which to transfer all but one of their licences to individuals who meet all of the above requirements. If any multi-plate owners fail to meet these requirements within two years, their taxicab licences should be revoked by the City and reissued to drivers on the list. 8. Present individual owners of taxicab licences are exempted from the requirements listed in 2 a) and b) above. AGENTS AND SUBLEASING 9. Abolish the use of agents and sub-leasing. SHIFT AND LEASE RATES 10. Lower shift, lease, and brokerage rates through a stakeholder negotiated industry standard.
TAXI STANDS 11. Increase the number of taxi stands in the city, including establishing a taxi stand at each subway station. The City should work in partnership with frontline taxi drivers to conduct an annual review of taxi stand issues in Toronto. RELATIONSHIP BETWEEN DRIVERS, MLS & POLICE 12. The Municipal Licensing and Standards Division (MLS) should establish a formal working relationship with taxi drivers and police to address issues related to driver and customer safety, aggressive ticketing and explore ways to jointly improve the taxi industry in Toronto. BENEFIT FUND 13. The Municipal Licensing and Standards Division (MLS) should establish a working group to develop and recommend a plan to create a benefit fund to provide health and dental insurance and retirement protection for drivers and their families. This working group will include representatives from the iTaxiworkers, brokerages and other industry stakeholders. At a minimum, shift drivers will be automatically enrolled and owner-operators will have the opportunity to buy-in to the plan. Start-up costs for the fund will be derived from the $5,000 fee collected from plate conversions TAXIS AS PUBLIC TRANSIT 14. The City of Toronto must recognize that taxicabs are an important component of public transportation. The role of taxicabs must be included when the structure of public transportation is being considered.
iTAXIWORKERS’ PROPOSAL HEALTH & SAFETY
HEALTH & SAFETY
1. Establish a permanent task force including taxi drivers, police, industry stakeholders and health practitioners to address driver’s health and safety.
Taxi drivers face the daily reality that their profession is inherently dangerous. Last year the Ontario government implemented Bill 168 – a series of amendments to the Occupational Health and Safety Act designed to prevent workplace violence and workplace harassment. Employers are required to assess the risks of violence in their particular workplaces and develop policies around them. The Ministry of Labour has produced guidelines to assist employers in assessing these risks. These guidelines included a list of nine risk factors. These risk factors, in the eyes of the Province, were seen as being particularly conducive to a workplace where violence or harassment was a threat to workers. The risk factors are as follows: 1. 2. 3. 4. 5. 6. 7. 8. 9. Direct contact with clients Handling cash Working with unstable or volatile clients Working alone or in small numbers Working in a community-based setting Mobile workplace Working in high-crime areas Securing/protecting valuable goods Transporting people and/or goods
With the exception of number eight, taxi drivers in Toronto are subject to all of these risk factors. Toronto taxi drivers face 89% of the provincial risk factors for violence and harassment in the workplace.
Recently, Statistics Canada reported that, of all workers in Canada, taxi drivers and police officers face the highest occupational risk of homicide.4 The homicide rate of taxi drivers was found to be twice that of police officers and taxi drivers are most likely to be murdered while on the job.5 Similar results have been found in the United States, suggesting that, given the nature of the work, taxi driving is an inherently dangerous job.6 It is therefore hardly surprising that Toronto taxi drivers have faced a long history of violence, assault and even homicide in this line of work. Assaults on taxi drivers in Toronto are all too common. Given the high percentage of visible minorities working in the industry, racist remarks or attacks are also widespread. The following news stories have appeared in the past two years:
• • • • • • • • • •
“Taxi driver standing outside his disabled cab is killed after being rammed by SUV”
– Toronto Star – February 15, 2010
“Two men wanted after taxi driver stabbing” – 680 News – February 20, 2010 “Three suspects sought after cab driver robbed” – Toronto Star – March 17, 2010 “Cab driver beaten, robbed of cash, phone” – Toronto Star – May 21, 2010 “Cab driver robbed of cash in Scarborough” – Toronto Star – May 24, 2010 “Taxi driver swarmed and robbed” – Toronto Star – July 22, 2010 “Taxi driver robbed, locked in trunk” – Toronto Star – August 13, 2010 “Beck taxi driver ambushed and robbed” – Toronto Observer – October 27, 2010 “Men wanted for taxi robbery” – Toronto Sun – December 13, 2010 “’Drive, drive’, cabbie ordered; Taxi driver tells of wild ride with alleged baby abductor and 1-month-old” – Toronto Star – January 3, 2011 “Toronto cab driver stabbed repeatedly in face” – CBC News – February 15, 2011 “Stabbed cabbie gouged by rules; Driver can’t earn living with lower-tier licence”
– Toronto Star – March 5, 2011
• • •
“Taxi driver fled after passenger pulled out gun; Cabbie tells murder trial about two-hour ride through Toronto” – Toronto Star – April 6, 2011
Sara Beattie and Adam Cotter, "Homicide in Canada, 2009" Juristat, Fall 2010, 85-002X, Statistics Canada.
Sara Dunn, "Police officers murdered in the line of duty, 1961 to 2009" Juristat, Fall 2010, 85-002X, Statistics Canada. http://www.bls.gov/iif/oshwc/cfar0020.pdf
• • •
“Man 22, charged after cab driver choked, robbed” – Inside Toronto – August 16, 2011 “Toronto cabbie robbed in carjacking before crash” – CBC News – September 26, 2011 “Taxi driver crashes after fare dispute” – CP24 – October 12, 2011
This long list of headlines demonstrates that taxi drivers face serious risks while working in Toronto. Of course, there are many other assaults and crimes that go unreported, and many other more minor, but still significant incidents, that do not make headlines. Not all assaults on Toronto taxi drivers are physical. In a recent study published in the Canadian Journal of Public Health, Toronto taxi drivers surveyed reported having experienced verbal abuse while on the job.7 The results from the iTaxiworkers’ survey showed similar findings: • 70% of drivers reported having felt in physical danger while working. • 85% of drivers reported being verbally assaulted while working. • 51% of drivers reported being physically assaulted or attacked while working. Compounding the problems inherent in an already dangerous job, the high level of economic uncertainty among drivers is a strong incentive to accept risky situations.8 Drivers are more likely to accept a passenger they feel wary about if they are desperate for the fare. If making ends meet was not such a constant struggle for these drivers, they would be more likely to avoid potentially dangerous situations. Similarly, given their low wages, drivers are pressured to work extremely long hours to make ends meet. This of course increases the risk of accident to the driver, the passenger and the public. The long hours of driving and frequent bending and twisting, also leads to ergonomic pressures and persistent back pain for many drivers.9 Health concerns about
Marcia E. Facey, “The health effects of taxi driving: the case of visible minority drivers in Toronto,” Canadian Journal of Public Health (2003) Jul-Aug; 94(4):254-7. Ibid.
Jiu-Chiuan Chen, Wen-Ruey Chang, Wushou Chang and David Christiani, "Occupational factors associated with low back pain in urban taxi drivers," Occupational Medicine (2005) 55: 535–540.
sitting for extended hours in traffic in Toronto have also been noted.10 Mealtimes are often erratic and unhealthy. Long shifts away from home also put significant strain on the drivers’ social and family lives, in many cases, leaving them unable to enjoy social situations.11 A common principle in labour markets is to compensate workers performing dangerous work with higher levels of pay – i.e. “danger pay.” However, as discussed earlier, Toronto taxi drivers do not even earn minimum wage when their long hours are factored in. Clearly, taxi drivers do not receive nor are they likely to benefit from danger pay.
Among the drivers surveyed by the iTaxiworkers, health and safety concerns were identified as their top issue. Creating real solutions will only come through a permanent task force, partnering taxi drivers, police, health practitioners and other industry experts. In other jurisdictions, models of joint partnerships among industry stakeholders have been successful at proactively developing effective health and safety initiatives. The establishment of a permanent health and safety task force for Toronto taxi drivers, and industry stakeholders, including government officials and the public, must be initiated by the City of Toronto. The mandate of the task force should include, but not be limited to, gathering information and data, identifying health and safety issues, assessing the risks faced by taxi drivers, researching and reviewing existing safety initiatives and developing new strategies to improve the health and safety of Toronto’s taxi drivers. Funding for the health and safety task force could come from a variety of sources, and take many different forms. One example, in Winnipeg, Manitoba, the provincial government commissioned an extensive independent review of safety issues in the taxi industry. The Report on the Study of Taxicab Safety Issues outlined several recommendations to enhance safety for taxi drivers in that province. One
Joseph Zayeda, Mourad Mikhaila, Sylvain Lorangera, Greg Kennedy & Gilles L'Espérance, “Exposure of Taxi Drivers and Office Workers to Total and Respirable Manganese in an Urban Environment,” American Industrial Hygiene Association Journal 57:4 (1996). Sara Abraham, Aparna Sundar, Dale Whitmore Toronto, “Toronto Taxi Drivers: Ambassadors of the City: A Report on Working Conditions,” January 2008
recommendation was that a “Taxi Health, Safety, and Prevention Trust Fund” be established with the objective of providing the necessary equipment, tools, education and training to improve the health and safety of frontline drivers. It was suggested that this fund would be financed by a modest levy on fares and that these monies would then be collected and managed by the Trust Fund. Although health and safety initiatives in other jurisdictions can provide useful examples, it is essential to develop a task force that addresses the issues specific to Toronto drivers and the taxi industry as a whole. Overall, taxi drivers’ health and well-being should be considered alongside the iTaxiworkers other proposals. Increasing economic well-being would give a driver more of an incentive to avoid taking a dangerous fare in the hopes of earning more on his/her shift. Increasing the number of taxi stands would give drivers the opportunity to take some strain off their bodies and stretch, avoiding long-term physical issues. Thus, while health and safety is listed as a separate issue in this submission, it should be recognized that all of the iTaxiworkers’ proposals relate to this key topic in some way.
iTAXIWORKERS’ PROPOSAL LICENSING ISSUES
2. There should be only one kind of taxicab owner’s licence. W, Ambassador and Standard plate holders should be converted to one standard plate. Conversion to the standard plate will be contingent on the existing W and Ambassador plate holders paying a $5,000 fee. The taxicab owner’s licence should have the following properties: a. Each owner’s licence must be in the name of a licensed taxicab driver, b. A licence owner may employ an additional driver to drive the owner’s taxicab; a second driver may be hired in the event of sickness or injury, c. Licence owners may not employ agents or any other people except the additional driver, d. By-laws describing taxicab licences are amended so that the licences become property that banks and other agencies are willing to finance.
3. An individual may not own more than one taxicab owner’s licence. 4. A taxicab owner’s licence shall be transferable whether or not it is attached to a vehicle. 5. A plate can only be sold to those on the waiting list that have been licensed and driving a taxicab in the City of Toronto full-time for three years. 6. Corporations that presently own taxicab licences have two years within which to transfer their licences to individuals who meet all of the above requirements. If any corporate owners fail to meet these requirements within two years, their taxicab licences should be revoked by the City and reissued to drivers on the list.
7. Present owners of more than one taxicab licence have two years within which to transfer all but one of their licences to individuals who meet all of the above requirements. If any multi-plate owners fail to meet these requirements within two years, their taxicab licences should be revoked by the City and reissued to drivers on the list. 8. Present individual owners of taxicab licences are exempted from the requirements listed in 2 a) and b) above
The City of Toronto currently administers two broad classifications of taxicab owner’s licences (plates): “Standard” and “Ambassador.” Originally, the City only issued Standard plates. Following the 1998 Task Force, the City introduced the new Ambassador plate and discontinued the issuance of Standard plates. Currently, there are 3,451 Standard, 1,315 Ambassador and 85 active W plates in the city. The plates have very different rules and properties. Ambassador (Includes W Plates) Non-transferable Tied to a single driver Can only be held by person driving the taxi No market value Cannot hire any drivers* “Owner-operator” business model
Standard Transferable Not tied to a single driver Can be owned by absentee owner Very high market value Can hire many drivers “Lessee” business model
* Does not apply to W plates.
The iTaxiworkers’ set of proposals on licensing seeks to create a single owner’s licence city-wide that is essentially a hybrid of these two types of plates. We have identified the strengths and weaknesses of each type of licence. Our proposed licence capitalizes on the strengths of each existing licence, while minimizing their weaknesses.
THE STANDARD SYSTEM
WHAT IS WRONG WITH THE STANDARD SYSTEM? The problems with the Standard system stem from the basic fact that a standard plate is a sell-able and marketable commodity that does not have to be owned by the driver of the taxi. Given the restricted number of plates in the city, and the ever-expanding market of customers and drivers, the plates continuously appreciate in value. According to the MLS, the average market value of a standard plate rose from $133,750 in 2008 to $210,126 in 2011 – that’s an appreciation of over 57% in just three years. This puts plate ownership beyond the financial reach of most drivers, and encourages an ownership model characterized by absentee/multi-plate owners and asset-less drivers. The City of Toronto first allowed Standard plates to be sold on the open market in 1963. This essentially made the licence a “capital asset, with value created by a supply controlled by the Commission.”12 As the 1998 Task Force reported, the value of plates has been rising steadily over previous decades. The Task Force found that the return-oninvestment from the plates averaged approximately 12.6% per year: an incredibly lucrative investment for plate owners. Not surprisingly, the 1998 Task Force noted a “widespread agreement that absentee owners and passive investors are often an unnecessary and detrimental link in the chain.” The Standard system has key drawbacks: • As the licences are incredibly expensive to buy, and only increase in price, there is an ever-diminishing chance for drivers to purchase a licence and the phenomenon of absentee owners will only grow. As the cab drivers are very rarely the owners of the cab, there is less incentive for them to provide top-notch customer service. The money that ultimately funds the substantial return-on-investment for absentee owners, passive investors and agents must come out of the pockets of taxi drivers and their passengers. Having this extra level of middlemen who must be compensated from a taxi ride results in less income for the drivers.
Sara Abraham, Aparna Sundar, Dale Whitmore Toronto, “Toronto Taxi Drivers: Ambassadors of the City: A Report on Working Conditions,” January 2008
Standard - Where Each $ of Fare Goes
TO BROKER, $0.09 DRIVER INCOME, $0.21
CAR & INSURANCE COSTS, $0.27
PLATE LEASE FEE, $0.23
Ambassador - Where Each $ of Fare Goes
TO BROKER, $0.09
DRIVER INCOME, $0.41
CAR & INSURANCE COSTS, $0.28
Data for these graphs derived from wage information from Sara Abraham, Aparna Sundar, Dale Whitmore, “Toronto Taxi Drivers: Ambassadors of the City: A Report on Working Conditions,” January 2008
These graphs demonstrate how the owner-operator model of the Ambassador plate provides more income for the driver. In the Standard system, with an absentee plate owner, 23% of the fare goes to the plate owner and agent (if applicable). In an industry where profit margins are already razor thin for drivers, this extra cost hurts drivers more.
It forces them to rush for more fares, take more risks and to sacrifice customer service – just to pay overhead and hopefully make some income. The owner-operator model does not increase costs for customers. It merely assures that a significant portion of their fare will remain with the driver, instead of being used to fund what has been an incredibly lucrative investment for many absentee investors who do not participate in the difficult day-to-day work of driving a taxi in Toronto. The ownership model created by the Standard system does not serve the drivers, nor does it serve the public. WHAT ARE THE ADVANTAGES OF THE STANDARD SYSTEM? The Standard system does have certain advantages. Drivers who lease a plate are permitted to hire second drivers, called the “shift driver.” The shift driver pays a fee to the lessee, which helps to cover the overall costs of operating the taxi. A 2008 study found that shift drivers pay an average of $1,882 per month to the driver leasing the plate. While there are higher insurance premiums associated with two taxi drivers on one car, the study found that lessees with a second driver still earned more than twice that of lessees without a second driver. In an industry where profit margins are so thin, opportunities to share costs among drivers should be preserved and encouraged. This will result in higher levels of earnings for drivers without an increase in cost to the public, ultimately resulting in higher levels of customer service. For the few Standard plate owners who actually drive their own taxis, the appreciating value of the plate provides an important element so often absent among this workforce: retirement security. These drivers understand that their ownership of a plate, that will continue to rise in value, will guarantee them a certain amount of income in retirement if they sell their plate. The fact that the person driving the taxi benefits from this eventual return-on-investment is much different than when an absentee owner benefits by cashing-out. Knowing the plate can eventually be sold provides these owner-operators with a measure of security that most drivers lack. This security would be extremely important in making taxi work “good work.”
CONCLUSIONS REGARDING THE STANDARD SYSTEM The iTaxiworkers therefore make three broad conclusions about the Standard system: • The absentee ownership model does not serve the drivers, the customers, or the overall industry. The only people served by this model are the absentee owners themselves, who do not perform the difficult work of driving a taxi in Toronto. The taxi industry and the city overall would benefit if this element of the licensing system were grandfathered out. Standard plate owners who drive their own taxis have a measurement of retirement security that other drivers do not. These drivers feel less economic pressure and are therefore more likely to provide high levels of customer service. The cost-sharing advantages of allowing second drivers within the Standard system results in higher incomes for drivers, which results in better customer service. Cost-sharing advantages should be preserved in a new system.
These conclusions are integrated into the iTaxiworkers’ hybrid proposal on licensing.
THE AMBASSADOR SYSTEM
WHAT IS WRONG WITH THE AMBASSADOR SYSTEM? At 8 p.m. on February 14, 2011, Toronto taxi driver Khalil Talke was stabbed several times in the head, throat and mouth by his passenger. The taxi was on a dark stretch of a quiet street when Talke was attacked. The assailant escaped, and Talke faced a long period of recovery. While he convalesced, he was forced to return his Ambassador plate to the City, as per municipal by-laws. These by-laws prevent Ambassadors from hiring second drivers. The Toronto Star reported that Talke felt like he had been attacked twice, “once by the attacker and now by the City.”13 Ambassador drivers, as owner-operators, exemplify the definition of “self-employed” workers. Traditionally, our conception of a self-employed individual was the image of the successful entrepreneur. This entrepreneur took risks by starting a business and likely endured some difficult times in the beginning. However, through dedication and hard
“Stabbed cabbie loses his income because of city rules,” Toronto Star, March 4, 2011.
work, the business expanded, the entrepreneur hired employees and soon began enjoying substantial financial returns. In Canada, being self-employed means that one is excluded from most of the legislative and common law protections available to workers, as these protections are only available to traditional “employees” who work for someone else. Self-employed workers, therefore, do not have the automatic protection of laws on employment standards, employment insurance, health and safety, workers compensation, and labour relations. For access to the Canadian Pension Plan (CPP) taxi drivers have to contribute twice what employed workers do to receive the same benefits upon retirement. However, losing these protections is not so serious for financially successful entrepreneurs. The wealthy self-employed individual described above would have less need for this basic safety net of rights, which means so much for workers further down the economic ladder. However, the trade-off is not so easily made for all self-employed individuals. As labour law scholar Judy Fudge writes, “the self-employed do not make up a homogenous category; instead, they range from the high income professional who employs others to the child-care provider who works out of her home and employs no one.”14 Researchers have recently demonstrated that the traditional ideal of self-employment is slowly dying in favour of a more precarious version of self-employment. Each year, fewer selfemployed individuals are actually hiring employees, while more self-employed individuals are truly working on their own. The new self-employed individual tends to be older, work longer, have less access to benefits and earns significantly less than the traditional entrepreneur.15 Toronto taxi drivers under the Ambassador system fall into this precarious worker category. They are not covered by the protective legislation enacted for most workers, yet their work is very low-paying. In short, drivers desperately require the safety net that is not extended to them. The Ambassador system forces drivers into an extremely precarious form of self-employment in an industry with significant barriers to economic security.
Judy Fudge, “Labour Protection for Self-Employed Workers,” Just Labour 3 (2003): 43.
Judy Fudge, Eric Tucker and Leah Vosko, The Legal Concept of Employment: Marginalizing Workers. Report for the Law Commission of Canada (Ottawa: Law Commission of Canada, 2002): 27.
However, unlike other self-employed individuals, Ambassador drivers are disadvantaged in another important way. Not only are they denied important legislative protections, these drivers are also prohibited by the City from partnering, leasing or temporarily transferring their licences, even if they are unable to work. The non-transferable Ambassador licence is tied exclusively to the owner who can be the only driver. This prevents the owner-operators from expanding their businesses or to partner with other drivers to share costs. It also prevents the owner from having a replacement driver during a time of illness or disability thereby forcing drivers to work while ill or disabled. When surveyed, over 50% of drivers reported having worked while being seriously sick or injured. Additionally, as Ambassador licences are not-transferable, they accrue no value throughout the owner’s career, and therefore provide no measure of retirement security. Taxi drivers are uniquely disadvantaged by the City in this way. The City, of course, regulates licences for many businesses. It provides licences for stationary businesses such as automobile body repair shops, butcher shops, drug stores, restaurants, etc. It also provides licences for mobile businesses such as catering trucks and food vendors. However, these licences are made available to a person, a partnership, or a corporation. Their proprietors are then able to hire employees or partners or investors to share in the costs, risks and working time of running the business. If successful, they are able to climb out of precarious self-employment and become entrepreneurs, in the ideal sense of the word. These options for betterment are not available to Toronto Ambassador taxi drivers. To begin, they work in an industry defined by its extremely thin profit margins. As selfemployed workers, they are then stripped of the legislative and common law protections that other workers enjoy. Then, as Toronto Ambassadors they are prevented from partnering to share costs, transferring their licences while unable to work and selling their business after it has grown in value. A recent case at the Ontario Human Rights Tribunal also challenges the fairness of the Ambassador system on grounds of systemic discrimination, as a disproportionate number of Ambassador drivers are visible minorities. The Tribunal’s ruling in the case has yet to be released. In summary, the perils of self-employment are partnered with municipal restrictions to make this already difficult work extremely and unacceptably precarious, in a way that many believe is systemically discriminatory.
ECONOMIC ASPECTS As stated above, losing the floor of legislative and common law protections would not be so detrimental to taxi drivers if they managed to earn enough money to offset these losses. However, Ambassador drivers are not anywhere close to achieving this offset. Their earnings in fact come in below the legislated standards in Ontario. Ambassador taxi drivers face substantial costs. First, they must own their own car which cannot be more than 7 years old. Along with the cost of car payments are maintenance, depreciation, insurance and gas – all of which are costly due to the nature of the work and the kilometres traveled. The cost of gas and insurance has also been rising over recent years, and is likely to continue becoming more expensive in the future. The taxi drivers must then pay brokerage fees which allow them to receive dispatch calls. On top of this, taxi drivers must pay their licensing fees to the City, which are substantial. It is important to note that all of these costs, with the exception of gas, are fixed. These costs will continue to add up, whether or not the driver is able to drive. WHAT WORKS IN THE AMBASSADOR SYSTEM? The principal rationale for moving to the owner-operator Ambassador model offered by the 1998 Task Force was to provide a higher level of customer service, while providing an avenue to ownership for drivers. The basic idea was that owner-operators will take greater pride in their business, since they are the principal proprietor. The iTaxiworkers agrees with this assertion and believes strongly that Ambassador and W-plate drivers feel a pride of ownership. The 1998 Task Force found that “owner-operated taxicabs are maintained at a higher quality standard than fleet vehicles.” Vehicle inspection failure rates were much lower for owner-operator taxis. It also concluded that “statistics show that owner-drivers, with pride of ownership typically provide the best level of customer service.” Since the introduction of the Ambassador program in 1998, the number of taxi complaints received by MLS has fallen significantly. This is demonstrable proof that the owneroperator model has been providing better customer service in Toronto’s taxi industry.
This has, in turn, pulled the level of service throughout the industry up, by setting a higher bar for customer service in general.
# of Taxi Complaints Received by MLS
2000 1800 1600 1400 1200 1000 800 600 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
CONCLUSIONS REGARDING THE AMBASSADOR SYSTEM The iTaxiworkers therefore make three broad conclusions about the Ambassador system: • Ambassador licences, as they are currently regulated, force drivers to remain in a very precarious kind of self employment where wages are low, legal and statutory protections are minimal and the opportunities for growth or future profit are minimal. The two main culprits of this precarious self-employment are: o The inability of Ambassador drivers to hire a second driver to share costs o The inability of Ambassador drivers to sell their plate upon retirement. • The pride of ownership associated with the owner-operator model, however, translates into better customer service.
These conclusions are integrated into the iTaxiworkers’ hybrid proposal on licensing.
CONCLUSIONS ABOUT THE LICENCING SYSTEM The conclusions reached by the iTaxiworkers are summarized in the following chart.
Second drivers allow cost sharing. Strengths Some plates owned by drivers, which allows them to work towards value of asset used in retirement. Pride of ownership leads to better customer service.
Many plates property of absentee owners. Many plates owned by owners with 2+ plates. 20% of fare money can go to absentee owners, leaving less for drivers.
Forced to remain in precarious self-employment with little chance of improvement. Cannot hire second driver. Plates have no value. Creation of plates has led to a two-tier system in the City.
The iTaxiworkers’ proposal on licensing has carefully sought to combine the strengths of both types of licence, while avoiding the weaknesses. Each strength has been preserved in our proposed system, while each weakness has been eliminated. The resulting features of our proposed licensing system are as follows: Characteristics of iTaxiworkers’ Proposed System One type of licence across the entire industry
Removal of current two-tier system
Pride of ownership leads to better customer service Eliminates absentee owners, ensures that all fare money stays within the working taxi industry. Allows drivers to work towards building the value of their business, as self-employed workers ideally should, which provides a measure of retirement security. Eliminates multi-plate owners who do not drive taxis and who take up to 20% of fare money that would otherwise go to drivers. Ensures that individual drivers who have many years of seniority will be rewarded with the opportunity of plate ownership in an equitable fashion. Allows cost sharing, will raise owner and driver profits.
Licences can only be owned by drivers
An individual may not own more than one licence
Licences can only be sold to drivers on the list
Second driver permitted
THE MECHANICS OF CONVERSION The iTaxiworkers recognize that this proposal will result in a substantially different kind of taxi industry in Toronto. To manage this change, our proposal provides for a two-year transition period from the existing licensing structure to the new structure. We propose that the transition not be managed by the City – instead, a market-based approach would see owners and drivers making their own decisions on how best to protect their own interests to comply with the new guidelines. Creating a new kind of plate and ownership rules will clearly impact the value and operating reality of existing plate ownership and lease structures. The City will certainly encounter resistance from various groups who prefer the existing structure. The iTaxiworkers is asking the City to recognize that resistance from interest groups is not a reason to forego the changes in licensing that are necessary for a better taxi industry in Toronto. We anticipate that any resistance to changes in the licensing of taxis is likely to centre on the idea of property rights. Absentee and multi-plate owners are likely to argue that the City does not have the right to take away what is rightfully theirs. The alternative view – supported by iTaxiworkers – is that part of the deal these plate owners accepted when purchasing their plates is that the City ultimately decides what rules will govern the taxi industry. The City’s view, of course, is likely to change over time. This is simply part of the gamble of owning an asset whose value is largely determined by ever-changing municipal policy. The absentee and multi-plate owners have indeed profited very well from their investments, as the City itself recognized in the 1998 Task Force. This does not mean that such profits and returns are guaranteed ad infinitum, or that the betterment of the city’s taxi industry should be held back in the interests of continuing to appease a small number of absentee owners and passive investors.
We also anticipate the criticism that Ambassador drivers are seeking conversion solely for financial reasons: when converted, their plates, which are currently worth nothing, will suddenly acquire a substantial value. It is also suggested that these Ambassador drivers will sell their plates to make a one-time windfall. We thoroughly reject these suggestions for the following reasons: • Ambassador drivers have unanimously indicated in our survey that they would not seek to sell their plates. Over 92% of drivers stated that they would not plan to sell their plate immediately if it is converted. Many Ambassador drivers were on the City’s waiting list for newly issued Standard plates in 1998. In many cases, these drivers had been waiting on this list for years to have an opportunity to purchase a Standard plate for $5,000. However, after the City’s decision to not issue more Standard plates, these years of waiting became worthless for these drivers. Many feel they were given a false promise by the City and forced to wait many working years for nothing. In these cases, Ambassador drivers do feel that the City should make good on its past word and provide them with the opportunity to invest in a plate that can accrue value. Ambassador drivers have strongly indicated a willingness to pay some amount for the conversion. Of drivers surveyed, 90% would be willing to pay for conversion. Most would be prepared to pay less than $5,000, but 27% of drivers were still prepared to pay more. Ambassador drivers resent the argument that they would not deserve the new plate value if their existing plates were converted. They feel that, having been so disadvantaged by the system for 14 years, they are entitled to some kind of benefit.
This willingness to pay is why the iTaxiworkers has proposed a $5,000 fee for conversion of existing Ambassador licences. As will be discussed later, this substantial asset base will be used directly to benefit the working drivers under the new system. Another concern surrounding the conversion of Ambassador plates is that enabling their owners to employ a second driver might put more taxis on the road and lead to an oversupply of cabs in Toronto. In fact, many current Ambassador plate owners would not choose to employ a second driver.
When the iTaxiworkers asked drivers, “If your Ambassador or W Plate is converted to a Standard Plate this year, do you plan on hiring a shift driver?” The responses were: 46% yes, 30% no, and 24% maybe. Currently, there are 3,451 Standard and 1,315 active Ambassador plates in Toronto. If Standard plates are used for two shifts a day and Ambassador plates for a single shift, the current supply of taxi shifts is 8,217. If the percentage of Ambassador plate owners who responded “yes” and half of those who responded “maybe” added a shift driver, 763 additional taxi shifts would be driven (i.e. 58% of 1,315). In other words, supply would increase by only 9%. However, this estimate is excessive because not all of the shift drivers hired by current Ambassador plate owners would be new entrants to the industry. Some would be drivers who currently drive taxis with Standard plates. More demand for shift drivers would create better job opportunities for them, drawing some new workers into the industry but also drawing some existing drivers away from agents and Standard plate owners. Another important factor is that hiring a second driver would allow current Ambassador plate owners to drive somewhat less themselves. The iTaxiworkers’ survey found 75% of respondents worked shifts longer than 10 hours a day and 81% doing so six or seven days a week. Many Ambassador drivers would undoubtedly choose to spend less time at the wheel if they could supplement their earnings by employing a second driver. Therefore, the time worked by additional shift drivers would not simply be added to the time now worked by Ambassador drivers. Given all of these factors, enabling current Ambassador plate owners to employ a second driver would only modestly increase the total supply of taxi service. Any increase would be offset in the context of rising demand for taxi service, as Toronto’s population grows and ages. Taxi reform in 1998 ushered in a new era for drivers and the public. To address the issues of poor service and taxi driver exploitation, the owner-operator model was introduced via the Ambassador and W plates and has led to real improvements for drivers. However, the 1998 Task Force reform stopped short of addressing the problems associated with the Standard plate. Fourteen years later we have a two-tier system that perpetuates
inequality. One licence that provides equality for all owners and advances the single owner-operator model will significantly improve the taxi industry for the public, drivers, brokers and City regulators. An industry with one plate per owner and one additional driver is fair, efficient, just and the cornerstone of the proposals contained in this submission.
iTAXIWORKERS’ PROPOSAL AGENTS & SUB-LEASING
AGENTS & SUB-LEASING
9. Abolish the use of agents and sub-leasing
Agents were first introduced to assist elderly plate owners and industry widows in the management of their taxicabs. However, the role of agents has increasingly evolved to include representing absentee owners and passive investors. Some standard plate owners view their ownership of a plate as a lucrative investment opportunity. Individuals and/or corporations that own multiple plates who elect not to operate as the driver of each of the vehicles associated with these plates, contracts to either a single lessee, who will operate the taxi and pay a monthly fee directly to the plate owner; or to an agent, who pays for the use of the plate and then sub-leases the plates to individual drivers on either a daily, weekly or monthly basis. WHO ARE AGENTS? WHAT DO AGENTS DO? Designated agents are the middlemen between many plate owners and taxi drivers. City by-law 545-144 permits the owner of a standard plate to designate an individual to manage the plate for them. Individual agents must be licensed as a driver, owner, or taxicab broker. Agents do the legwork to find drivers to lease the plate, arrange those leases and monitor them. A close parallel in real estate would be the relationship between when an apartment is managed and rented by a property manager on behalf of a landlord, who may never interact directly with their tenant.
The fees that an agent charges depends on the type of lease arrangement. According to the 1998 Task Force, there are three general types of lease arrangements: 1. Shift (or Cash-in) a. Agent provides the driver with the taxicab and equipment on a shift basis. b. Current rates are estimated to be $85 - $100 per day 2. Plate lease a. Agent provides the plate. Drivers provide the taxicab and pays insurance and brokerage fees. b. Current rates are estimated to be $1600 - $2000 per month 3. Package a. Agent provides the plate, insurance, and brokerage fees. Driver provides the taxicab. b. Current rates are estimated to be $3000 - $3500 per month HOW MANY AGENTS ARE THERE? As of January 1, 2011, there were 470 agents operating in the Toronto taxi industry.16 These agents represent 2,239 of Toronto’s taxi plates. Each agent controls between 1 and 111 plates, with an average of 4.8 plates per agent. As shown in the table below, a minority of agents (11%) controls a majority (66%) of the share of agent-controlled plates. % of Total Agent Plates Controlled 13% 14% 7% 66%
# Plates Controlled 1 plate 2-5 plates 6-9 plates 10+ plates
# of Agents
% of Agents 61% 21% 7% 11%
Total Plates Controlled 288 313 161 1477
288 109 21 52
All data provided by the Toronto Municipal Licensing and Standards Division (MLS).
Despite the introduction of the Ambassador system in 1998, the number of agents in the industry has grown significantly. In 1997, there were 401 agents, while today there are 470 agents in the industry, an increase of 17%. The concentration ratios of plate ownership have remained relatively stable over this period.
# of Agents in Toronto Taxi Industry
490 470 450 430 410 390 370 350 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
The increase in the number of agents and the unrestricted system of sub-leasing in Toronto effectively drives up costs for frontline drivers. This forces them to work longer hours to cover the costs of leasing a plate that in turn generates a profit for agents, absentee owners, and passive investors. For example, a single plate that is leased by an agent, brokerage or garage from an owner and then subsequently sub-leased (rented) out, often to two drivers per 24 hour day driving under the single taxi plate, can bring in enormous profits for the owner and agent. According to the MLS, the average monthly cost to lease a plate directly from an owner is $1,212.19 per month or $14,546.28 per year. For agents, who control on average 4.8 plates each, at a lease rate of $1,243.84 per month, and who often lease plates to 2 drivers per 24 hour period, can earn an income of over $143,000 per year.
The iTaxiworkers assert that the use of agents and sub-leasing is detrimental to taxi drivers who must pay brokers, agents and owners in order to work. The added management layer of the agent results in additional fees that are passed onto the driver, further reducing their incomes. Sub-leasing is a widespread problem in Toronto. It negatively impacts the entire industry by eroding service and safety standards, prevents drivers from earning a decent living to support their families and creates an environment where an increasing number of agents are controlling more and more plates which enable them to derive profits and monopolize the taxi industry at the expense of frontline taxi drivers. As absentee owners, passive investors and agents sub-lease their plates to taxi drivers, there is little incentive for owners to ensure a high level of safety and service as the plate owners and agents will receive their lease fees irrespective of the challenges that the taxi drivers face on a daily basis. The 1998 Task Force concluded, and the iTaxiworkers agree, that “with plate leasing and the creation of the middleman or designated agent, a growing number of plate owners have a decreased incentive to provide a high quality or type of service since it has no direct financial impact.” As costs for frontline drivers are pushed upwards by the practice of sub-leasing, drivers are forced to work longer hours and take more risks on the road to earn enough money to pay their agent and lease fees. The money that drivers earn serving the public goes to support the agents, absentee owners and passive investors, leaving drivers with little to support their families. Sub-leasing has created an environment where a small number of multi-plate owners and agents make tremendous profits at the expense of frontline taxi drivers and the public. The use of agents and the practice of sub-leasing should be abolished.
iTAXIWORKERS’ PROPOSAL SHIFT & LEASE RATES
SHIFT & LEASE RATES
10. Lower shift, lease and brokerage rates through a stakeholder negotiated industry standard.
It is well known that taxi drivers face high fixed expenses which significantly impact their economic status. Specifically, drivers are subject to high lease, shift and brokerage fees without any protection or recourse from arbitrary and unilateral increases. In the current regulatory framework, standard plate owners enjoy a guaranteed income from the lease of their plates and brokerages receive a guaranteed profit from dispatch fees. In contrast, drivers have no such guarantee. These rates are open to manipulation and drivers are vulnerable to exploitation. Unrestricted fees are often responsible for the low incomes of frontline taxi drivers. In the 1998 Task Force, it was acknowledged that the current structure of the industry impeded the ability of many drivers to earn a living wage. Recognizing that unregulated lease rates needed to be addressed, the 1998 Task Force recommended that the City investigate the possibility of setting a limit on lease rates. It was determined that setting lease and other fee caps was outside the City’s legal jurisdiction and that provincial action was required to allow the City of Toronto to institute fee caps. To date, it is unclear if any action has been taken between the City and the Province regarding this matter. Unlike Toronto, several comparable world class cities have been effective at protecting drivers from unrestricted fee increases and exploitation by absentee owners, passive investors and agents. In municipalities such as Chicago, Boston, New York, Seattle and Philadelphia, city government has been successful in implementing lease, shift and brokerage fee caps to ensure that lessees and shift drivers are able to make a decent living to support their families.
To stabilize the industry and to ensure that drivers have an effective means to negotiate fair rates, the iTaxiworkers propose the establishment of a permanent committee in which a majority of industry stakeholders will participate to reach fair and flexible lease, shift and brokerage rates. • This committee will be established by a municipal by-law outlining its responsibilities and authority. Stakeholders representing at least 60% of plate owners will work cooperatively with drivers to negotiate a fair fee scale that includes lease, shift and brokerage fees. The City will designate the iTaxiworkers Association as the official representative of lease and shift drivers. This committee will have 6 months to set lease, shift and brokerage rates. If no agreement is made within 6 months, it will be resolved through binding arbitration. Once negotiated, these rates will apply across the industry. Rates will remain the same for 2 years and then rise at the rate of inflation. These rates are maximums. Drivers can be charged less but not more. Rates will be all inclusive and no additional charges, fees, deposits, service fees etc. can be added.
• • • •
iTAXIWORKERS’ PROPOSAL TAXI STANDS
11. Increase the number of taxi stands in the city, including establishing a taxi stand at each subway station. The City should work in partnership with frontline taxi drivers to conduct an annual review of taxi stand issues in Toronto.
The iTaxiworkers submit that there are not sufficient taxi stands in the city and that more taxi stands would benefit both drivers and customers. As per By-law 545-147 (D), taxi drivers are not permitted to park on any road while waiting for a fare. This is only permitted at designated taxi stands. There are strict rules around overcrowding of taxi stands, and each stand is marked with how many taxis it permits. There are currently only 146 designated taxi stands in the city that can accommodate a total of 452 taxis. With over 4,700 licensed taxis on the road and 10,000 licensed drivers in Toronto, it is clear that there is an inadequate supply of taxi stands in the city. This negatively impacts taxi drivers, their customers, and the public. As taxi drivers are not permitted to wait anywhere other than taxi stands for fares, when the stands are at capacity, drivers are forced to continually cruise for a fare. For drivers, such fare-less driving is incredibly expensive, as it costs them in both gas and vehicle wear-and-tear. This places additional strain on their already stretched earnings. As gas prices rise, the true cost of this inadequate supply of taxi stands increasingly impacts drivers, as fares remain the same, forcing driver’s incomes even lower. In addition, taxi stands are an important place for drivers’ physical well-being. The long hours in a sitting position, combined with the twists and turns of interacting with customers places serious strain on drivers’ bodies. Taxi stands allow drivers a place to get
out of their cabs and stretch, use nearby washroom facilities, and safely make phone calls without breaking any by-laws. For the public, the inadequate supply of taxi stands negatively impacts the quality of life for Torontonians. First, there is the environmental impact of having thousands of cars constantly driving that are not serving any immediate purpose. These cars needlessly spew significant amounts of pollution into Toronto’s air. They also add to the growing gridlock problem in the City which was recently found to have the country’s longest commute.17 Taxi drivers seek out the busiest areas of the city, as that is where fares are most readily available. Forcing them to continually drive around these areas without fares only contributes to the growing traffic congestion downtown. In other jurisdictions, municipal governments have addressed the taxi stand issue by implementing initiatives such as the “Late Night Taxi Stand”. For example, the City of Calgary has launched a program whereby several parking spaces are reserved for taxis outside popular restaurants, bars and nightclubs during the peak late night hours – 10pm to 3am - on Thursdays, Fridays and Saturdays. This is in an effort to reduce drinking and driving and to stop inebriated individuals from running into the street to hail a taxi. This program decreases aimless driving, improves customer access to taxis, provides a safe place for taxi drivers to pick-up and drop-off passengers and has improved public safety. Several other cities are establishing similar programs, including Victoria, British Columbia and Seattle, Washington. In Victoria, the City has enhanced the program by providing police officers to periodically “supervise” the taxi stand areas to ensure the safety of taxi drivers and the public. Another way to increase the number of taxi stands is to use spaces that have already been designated for other vehicles. Fire lanes could provide spaces where drivers could park throughout the day as long as they remained subject to the needs of the police and fire department.
Statistics Canada, “Commuting to work: Results of the 2010 General Social Survey,” Canadian Social Trends, August 24, 2011, no. 11-008-X.
Toronto taxi drivers know which areas are lacking taxi stands, and which taxi stands are in the greatest need of expansion. Drivers also know better than anyone where the most non-stand pickups occur. The iTaxiworkers propose that the City increase the number of taxi stands, including the establishment of taxi stands at each subway station and additional taxi stands within the borders of the old City of Toronto. Additionally, it is necessary for the City to work in partnership with frontline taxi drivers in an annual review of taxi stands and proactively engage drivers when the installation, relocation or removal of taxi stands is under investigation.
iTAXIWORKERS’ PROPOSAL RELATIONSHIP BETWEEN DRIVERS, MLS & POLICE
RELATIONSHIP BETWEEN DRIVERS, MLS & POLICE
12. The Municipal Licensing and Standards Division (MLS) should establish a formal working relationship with taxi drivers and police to address issues related to driver and customer safety, aggressive ticketing and explore ways to jointly improve the taxi industry in Toronto.
Taxi drivers in Toronto feel strongly that they are unjustly targeted by police for violations of the laws regarding traffic, taxi stands and pick-ups/drop-offs. According to MLS statistics, in the last 5 years over 13,500 tickets for by-law infractions have been issued to Toronto taxi drivers and owners. These tickets are in addition to those issued under the Highway Traffic Act. When surveyed, over 90% of drivers responded that “police targeting abuse” and “traffic/parking tickets” was an “important” or “very important issue.” A major service provided by the iTaxiworkers is paralegal representation for drivers to deal with tickets that have been issued by Toronto Police. The popularity of this service testifies to the issues around ticketing in the city. Paying for tickets and paralegal representation is yet another expense for drivers. As this submission has already outlined in great detail, the income of taxi drivers is already stretched incredibly thin. Again, the further drivers are stretched, the more customer service will suffer. That being said, the iTaxiworkers advocate for ticketing that is fair and necessary for maintaining a high level of public safety on the streets of Toronto. However, given the negative perspective of drivers around ticketing, it is clear that a better relationship must be fostered between MLS, the drivers and the police on this issue.
The iTaxiworkers propose, in an effort to improve the relationship between the MLS, frontline taxi drivers and the police, that the MLS formally establish a permanent Taxi Advisory Committee (TAC) with equal representation from various industry stakeholders. In addition, it would be useful to explore conducting joint workshops and roundtables with taxi drivers and police to improve communication and help facilitate a better working relationship. It is also proposed that the industry consider establishing a mechanism by which drivers can assist police as “eyes on the road” and it is essential to systematically begin to track police interaction with taxi drivers so as to be able to identify, develop and implement concrete solutions to the issues facing Toronto’s taxi drivers.
iTAXIWORKERS’ PROPOSAL BENEFIT FUND
13. The Municipal Licensing and Standards Division (MLS) should establish a working group to develop and recommend a plan to create a benefit fund to provide health and dental insurance and retirement protection for drivers and their families. This working group will include representatives from the iTaxiworkers, brokerages and other industry stakeholders. At a minimum, shift drivers will be automatically enrolled and owner-operators will have the opportunity to buy-in to the plan. Start-up costs for the fund will be derived from the $5,000 fee collected from plate conversions.
As self-employed workers, taxi owner-operators, lessees and shift drivers do not receive any of the health, dental or retirement benefits that many other workers receive. Considering the inherent danger and constant exposure to physical, verbal and psychological abuse that Toronto taxi drivers experience on a regular basis, it is imperative that they have access to affordable and comprehensive health, dental and retirement benefits for themselves and their families. As previously noted, working as a taxi driver in Toronto does not provide a living wage or economic stability. At the request of the iTaxiworkers Association, a group benefits administrator provided an analysis of the availability and cost of a very basic benefit plan for member taxi drivers. Assuming that most drivers, who on average support more than 4 people on their income, were to choose family coverage, the cost for benefits would be over $200 per month. With an average income of just under $12,000 per year, this would see nearly 20% of a driver’s earnings being spent on benefits. Clearly, this option is out of reach for most drivers. The economic, social and health consequences of ignoring the lack of affordable benefits for Toronto’s taxi drivers and their families will lead to a decline in health status for thousands of Torontonians and exacerbate the demands placed on our health care system.
By developing a benefit fund for 10,000 Toronto taxi drivers, the costs per driver can be reduced to an affordable rate. This affordability is why many professional associations have begun to establish and/or manage their own benefit plans. Professional associations have a history of providing benefit plans to members and have become an established mechanism for offering security. Some examples include the Ontario Nurses Association, the Canadian Real Estate Association, the Toronto Board of Trade, and Engineers Canada. It is within this context that examples of specific benefit plans for taxi drivers are outlined below and may be useful models for a benefit fund for Toronto’s taxi drivers. New York State’s Independent Livery Drivers Benefit Fund, United States The concept of a benefit fund for drivers was inspired by New York State’s Independent Livery Drivers Benefit Fund which was established over the past several years. The fund was the result of state legislation that established a non-profit corporation to administer the benefit fund for taxi drivers. The law requires that dispatch companies join the fund and pay premiums for dispatch drivers into the fund. The fund then provides medical and loss-of-earnings benefits for drivers who have sustained serious injuries while working. Companies are required to participate and there are penalties for non-participation. The National Association of Taxi Drivers (NATD), United States The National Association of Taxi Drivers is a professional association in the United States that covers self-employed taxi and limousine drivers. Having been established in 2011, the group insurance is currently not offered in every state, but there are efforts to expand and eventually encompass the entire country. Benefits cover a broad range of services including health and life insurance, drug programs, legal representation for tickets, discounts on immigration representation, as well as on vision and dental costs. The City of San Francisco, United States The City of San Francisco initiated a study on how to offer health insurance to taxi drivers. The report seeks to demonstrate that every taxi driver can get insurance if all stakeholders agree to contribute (City and County of San Francisco Department of Public Health, 2006). In determining the need for health insurance, over 79% of San Francisco taxi drivers surveyed stated that the reason they did not already have insurance is because they could not afford it (San Francisco Municipal Transportation Agency). To counter this, the Agency suggested three main ways to offer coverage: medical savings accounts, direct health services that would provide care through hospital networks, or a health insurance plan under a taxi association. Some possible sources of revenue outlined include drivers, plate
owners, brokers and public sources such as increasing fares or creating a new fee or tax (City and County of San Francisco Department of Public Health, 2006). New York City and New York Taxi Workers Alliance (NYTWA) Founded in 1998, the NYTWA is the largest taxi driver association in the United States. It is a membership-based organization which provides access to healthcare for its 15,000 members. A NYTWA member has access to health care services which include: • • • • • • Community health workers Free annual health fairs for comprehensive check ups Health insurance options, including free or low-cost programs (Family HealthPlus, Child Health Plus, Medicaid, Medicare & renewals) Social security, retirement and disability insurance Discount dental programs for an annual fee of $63 for individuals and $86 for a family which includes 1,400 dentists who offer a free exam and x-rays Free prescription discount card
In addition, the NYTWA and The New York City Taxi and Limousine Commission (TLC) are collaborating on the establishment of a task force for the creation of a Taxi Driver Health and Wellness Fund which will include healthcare (medical and dental), as well as state disability, accidental death and dismemberment insurances. The sources of revenue for the fund include contributions from the industry, industry-specific revenue generating programs (lease contributions, taxi rooftop advertising revenue and profits from taking credit card payments), contributions from drivers, private foundation support and subsidies from the state as well as the federal government. The NYTWA proposal outlines a specific, realistic breakdown of sources of revenue they are using to fund the benefit package; these sources are comparable to those that could be used for a benefit fund for Toronto.
As the city’s taxi drivers are classified as self-employed, they do not receive employmentbased health insurance and other benefits. The low income levels of drivers further place the cost of private health insurance policies out of reach. To address this issue, the iTaxiworkers propose that the MLS establish a working group to develop a plan that creates an affordable and comprehensive package of benefits for all of Toronto’s frontline
drivers and their families. The preliminary funding for this initiative can be provided by converting the 1,400 Ambassador plates currently on the road, and at $5,000 per plate, this fee would provide $7 million in startup costs for a benefit fund. It is clear that there are benefit funds being created specifically for taxi drivers that provide access to healthcare and basic insurance, and should be considered in any reforms of the Toronto taxi industry.
iTAXIWORKERS’ PROPOSAL TAXIS AS PUBLIC TRANSIT
TAXIS AS PUBLIC TRANSIT
14. The City of Toronto must recognize taxis as an important component of public transportation. The role of taxis must be included within the larger public transportation policy discourse.
Taxis are an important part of the City of Toronto’s transportation infrastructure. They complement residents’ choice to use alternative modes of transport such as public transit, walking, and cycling. For many Torontonians, taxis are an alternative to the use of private vehicles, particularly in circumstances when other forms of transport are inconvenient or simply not available. The ready and affordable presence of taxis in our city supports thousands of people in choosing lifestyles that do not include owning a private automobile. It is for this reason that the decisions around the future of our taxi industry are critical to the development of our city. Taxis have always been a form of public transportation. Indeed, the taxicab is the oldest form of licensed public transportation in the world. In Toronto, they were one of the first forms of easily available public transit.18 William Hubbard, who would go on to be the first black Mayor of Toronto (and of any Canadian city) in 1906 and 1907, opened the city’s first taxi business in 1836. Today, taxis move thousands of residents, business people, and tourists around the city taking them to business meetings, attractions, medical appointments, hotels, and airports, among a host of other places. However, despite these facts, the role of taxis is often overlooked by transportation planners and policymakers in their discussions on public transportation.
Taxi!, p. xv.
TAXIS AS A SUSTAINABLE TRANSPORTATION OPTION Toronto’s Official Plan (OP) envisions providing Torontonians with sustainable transportation options that are seamlessly linked, safe, convenient, affordable, and economically competitive. Along with walking, cycling, and mass transit, taxis are a sustainable transportation option. These forms of transportation stand in contrast to privately owned vehicles that clog our roads and contribute to air pollution, both of which diminish our quality of life. Furthermore, taxis are a travel demand management measure as described in the OP, especially when they travel on High Occupancy Vehicle (HOV) lanes with three or more occupants. Travel demand management refers to strategies that make more efficient use of the transportation system such as carpooling, the use of high occupancy vehicle lanes, ride sharing arrangements, etc. In this regard, the OP sees a role for taxis as a supporter of an alternative transportation lifestyle by discouraging private vehicle ownership. In his February 3, 2012 article in The Atlantic Cities, writer Eric Jaffe further demonstrates how taxis add to public transit. Citing a study that mapped the origins and destinations of New York City’s yellow cabs over a 24 hour period by urban planning professor, David King of Columbia University, Jaffe reports that an individual’s travel journeys show a distinctive multi-modal pattern. That is, people use taxicabs to complete one leg of their daily round trip journey and likely use public transportation to complete the other leg. The pattern reveals that New York City taxi cabs work within the existing transit network, not against it. Jaffe writes, “… taxis act as a complement to these other modes and help discourage auto-ownership and use,” which is a defining feature of transit-oriented cities. The question Jaffe raises is: Why is the role of taxis as part of the transit network overlooked, especially when car ownership is being discouraged? This question is equally applicable in the Toronto context.
TAXIS IN TORONTO By serving as an additional transportation option, taxis fill the gaps of Toronto’s mass public transit system, the Toronto Transit Commission (TTC), in the following ways: • • • • • • • • • Provide late night and early morning service when TTC service is limited Provide service to the geographic areas of the city that are outside of the TTC service area19 Provide door-to-door service Accommodate elderly passengers who cannot use the TTC Accommodate passengers with mobility issues who cannot use the TTC Provide service to passengers seeking to transport items that would not be appropriate to carry on the TTC Transport passengers who do not feel comfortable on the TTC at certain hours Provide accessible options for tourists who are not familiar with local public transit Provide door-to-door service on contract for agencies like the Workplace Safety and Insurance Board
Studies and reports confirm the role of taxis in filling the gaps left by mass public transit, especially in terms of their service coverage area, payment options, convenience, and speed.20 Indeed, many people depend on taxis to complete trips that would otherwise be difficult to undertake by other modes of public transportation. Taxis are particularly a more suitable option when poor weather, bad connections, reduced mobility due to health, or when transporting heavy and bulky items like groceries or some other new purchase are factors. Many would find life difficult without the occasional taxi trip. Without a well functioning taxi system, many more people that could afford cars, would choose to purchase them, thereby adding to the traffic congestion and pollution in our city. Over time, one group that will grow increasingly more reliant on taxi services is senior citizens. According to Statistics Canada, the proportion of seniors is poised to grow rapidly in the coming decades. Last year, the first of the baby boomers turned 65, the
Many of Toronto’s neighbourhoods that are least accessible by transit are also its poorest neighbourhoods. See J. David Hulchanski, The Three Cities Within Toronto: Income Polarization Among Toronto’s Neighbourhoods, 1970-2005, University of Toronto, 2010. Bradgate Research. December 2010. Toronto Taxi Public Opinion Survey.
beginning of a historic demographic shift in Canada.21 By 2015, the population of seniors will outnumber the population of children in Canada for the first time in the country’s history. Moreover, by 2031, it is predicted that one-quarter of Canada’s population will be senior citizens. With an aging population, mobility is sure to become a key concern for seniors. In this regard, taxis can help meet their future mobility needs. Another group of users who may increasingly rely on taxis are those affected by service cutbacks to TTC bus and streetcar routes. According to the TTC’s website, there are over 50 bus and streetcar routes that are experiencing a reduction in frequency. Some of these routes include those servicing the city’s suburbs such as McCowan Road, Finch Avenue East, Eglinton Avenue West, Martin Grove Road, Markham Road, among many others. Taxi service will be especially critical for passengers travelling overnight where TTC service is either reduced or discontinued. Despite their importance in transporting residents and tourists, as highlighted above, taxis are largely treated as private vehicles on our roads. Apart from the taxi stands in the city, there are few other allowances made for taxis in Toronto. Whereas the TTC benefits from its own lanes, turning lanes, and special traffic privileges in certain parts of the city, taxis enjoy very limited traffic privileges.22 By contrast, in England, where taxis are part of the public transportation system, they are exempted from the application of local traffic restrictions such as the Congestion Charge in London. They also have access to restricted areas of town centres through gates and barriers. Furthermore, at transport interchanges such as airports and railway stations, taxis often enjoy a degree of preference over other modes such as bus and coach through more prominent positioning of taxi stands.23 The lack of traffic allowances for taxis in Toronto has not gone unnoticed. Allowing taxis the same access as TTC vehicles, especially in turning lanes, will cut down not only on the amount of travel time, but also on the amount of air pollutants released. The faster travel time to destinations, granted by traffic allowances, can also enhance customer service. Moreover, traffic allowances for taxis would increase the possibilities for drivers to earn additional fares, which can go a long way towards improving their low incomes. It is a win-win situation for all.
21 22 23
Statistics Canada. 2006 Canadian Census. In Toronto, taxis can use some bus lanes but there are other traffic restrictions like left hand turns.
Hawthorne and Menz. 2009. Encouraging the shift from private to public transport - are taxis part of the solution or part of the problem? European Transport Conference.
Aside from traffic allowances, taxi stands also belong in the wider discussion of taxis as a form of public transit. If public transit is to be truly accessible and convenient, then customers should have convenient access to taxis through additional taxi stands in the city. The current number of taxi stands does not provide the riding public with this option. Thus, the growth and expansion of the network of taxi stands should be coordinated and/or integrated with planning the City’s larger public transportation infrastructure. It is abundantly clear that an inclusive transit network must recognize taxis as a part of the public transit mix. When limited taxi use is associated with other alternative transport, it serves as a green and affordable solution to private car ownership. A vibrant and sustainable city is built by offering sustainable transportation options. As such, when developing broader transportation policies and plans, the City should consider the benefits that taxis deliver to both the riding public and the city as a whole.
CONCLUSION A WAY FORWARD FOR TORONTO’S TAXI INDUSTRY
……………………………………………………………………………………………………………………………………….. This document presents a coherent set of proposals that would reform Toronto’s taxi industry for the betterment of drivers, passengers and the city as a whole. These proposed reforms have been crafted and presented by Toronto’s taxi drivers. However, these proposals were not driven solely by self-interest but out of a desire to improve the taxi industry for drivers and customers. Despite working hard with little economic or social reward, Toronto’s taxi drivers take great pride in their work and truly want to serve their customers well. However, as drivers know better than anyone, true customer service will only come when drivers’ basic needs are met. These needs can only be met by municipal regulations that encourage basic safety and fair economic gains for hardworking drivers. In Toronto’s current taxi industry, thousands of hardworking drivers work very long hours doing very dangerous work, yet they still earn very little. Unlike most workers, they lack a social safety net of any kind and have no mechanism of saving for retirement. The end result is that drivers feel insecure, rushed and stressed on the job. Customer service inevitably suffers. On the other hand, those who may never drive a taxi themselves - the absentee and multi-plate owners and agents - reap the financial rewards of this system. With razor thin profit margins divided amongst so many stakeholders, drivers are increasingly pushed towards the edge. Ultimately, the City is responsible for how its taxi industry functions, and, to a large extent, for what drivers’ lives are like. The 1998 Task Force and the introduction of a new type of licence has provided, in essence, a unique experiment in different systems. If anything, the continuing struggles of all taxi drivers during this period have demonstrated that neither system – the Standard or Ambassador – is able to address driver concerns. However, each system does have clear advantages and disadvantages. The iTaxiworkers have attempted to craft a vision of a taxi industry that capitalizes on the strengths of each system, while sidestepping the weaknesses. This innovative, hybrid approach would make the system better for everyone: the drivers, the customers and the city as a whole.
If the City fails to address the need for reform now, the taxi industry in Toronto will continue to spiral downwards, both for taxi drivers and for the public. Taxi work is an important, frontline service. A well functioning taxi industry will benefit the city as a whole and contribute to Toronto’s rise as a global destination. Such an industry depends on finding innovative solutions that benefit all of the industry’s stakeholders, drivers included. The City should complete the good work that was begun by the 1998 Task Force and adopt the proposals put forward by the iTaxiworkers in this document. Again, we thank you for the opportunity to participate in this consultation and ask that you consider our proposals carefully.
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