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Driving Drivers to the Ground An Evaluation of Proposal to Add 30 New Taxicab Permits

Introduction Data from a study commissioned by the City Council and conducted by the Austin Transportation Department (ATD), as well as review of airport dispatch data obtained independently by the Taxi Drivers Association of Austin (TDAA), shows that Austin's taxi drivers – one of our city's largest immigrant/minority workforces- even at higher metered fares - are working longer and earning less. Driver incomes are plunging deeper into poverty levels as they toil daily over 12-hour shifts to serve the city and make a dignified living. The numbers from these independent studies validate the devastating story that hundreds of Austin drivers have already shared with Council Members during hearings regarding the issuance of 30 new permits - just months after 45 were already issued without study or review. As the City Council and Mayor have publicly pledged to allow the data to dictate policy, we urge you to take a close look at the study and see for yourself the human toll on over a thousand Austin families.

Taxi Drivers Association of Austin (TDAA): An Introduction The Taxi Drivers Association of Austin (TDAA) is a membership based grassroots organization representing the largely immigrant taxi driver workforce that serves the city of Austin tirelessly. We have testified in front of City Council during the last two readings on these items that seeks to add 30 new permits to the city’s taxi force. We have consistently argued that drivers have been under severe economic pressure since 2008 and that the 45 new permits that the Council put on the streets in July 2012 have had further depressed driver incomes – making a bad situation worse.

What the Data Reveals

In the first two readings, in spite of our explicit demand that the formula for issuance of new permits be evaluated prior to issuing any new permits, the Council chose to vote in favor of the issuance of 30 new permits, 5-2. Over the last two weeks, in addition to the ATD Impact assessment requisitioned by the Council, TDAA has gathered data on airport taxi and non taxi dispatches. The data from both these efforts shows clearly that the 45 new permits have had a devastating effect on drivers. This brief report analyzes two data sets and presents evidence that makes an unequivocal case against the issuance of 30 new permits. They are: 1. The Austin Transportation Department (ATD) has just released an Impact Study on the effect of the 45 new permits that hit the streets in July of this year. While the ATD study is in overall agreement with TDAA’s positions over the last two months, we will briefly point to significant conclusions that can be drawn from it. 2. TDAA has independently acquired data on total taxi and non taxi dispatches from Austin airport. We present our analysis of the same. ATD Impact Study The primary conclusions of the ATD Impact Study are as follows: 1. The total number of taxicabs in operation went up by 6% (45 new permits) starting July 1, 2012. 2. The total number of trips by taxi decreased by 1% -- in other words, a marginal but overall drop in ridership. 3. The total “amount” of fares collected increased by 1% - in short revenue coming into taxis went up by 1%. 4. 1, 2 and 3 above combined together constitute a devastating blow for taxi drivers. The ATD memo summarizing the study misses one very important detail that reveals the combined effect of more permits, drop in ridership and a total market that is inelastic. The revenue per cab fell from $5773 in 2011 to $4583 in 2012. This constitutes a 20% decrease. The per capita per hour revenue fell from $18.13 an hour to 13.4 an hour. This constitutes a 26% decrease. 5. Consequently, the number of hours worked by drivers went up 13% as against an anticipated 6%. 6. During this same period the per mile rate and the wait time rate were both increased. In addition a rush hour surcharge was introduced. The above reportage clearly indicates the following: 1. In as much as the per hour revenue coming into a taxis went down by 26% (in spite of a marginal increase in revenue collected by all taxis) and the total number of hours worked increased by

13%, there is no ambiguity that income per hour went down dramatically for taxi drivers in the post-45 permit period. 2. The above drop in income per hour could not be offset by the increases in metered fare, even though the increases in metered fare were not insignificant. The combined increases in metered fare is estimated to have been in the range of 4.5%. In other words, the hourly income of drivers went down in spite of increases in metered fare. 3. Driver hourly income went down in spite of drivers adding anywhere between 1 to 1.5 hours to their daily shift (13% of a 12 hour shift is about 1.5 hours). 4. The reported increase of 1% in the “amount” of fares collected could potentially be misleading in two ways. First, as mentioned above, it represents the total revenue collected by all taxis including the additional 45 put on the street from July 1st. Hence the increase is not surprising because it represents 45 more drivers toiling 12 hour shifts. What it conceals is the per capita figures, which, again, as explained above fell by 26%. Second, those unfamiliar with the industry tend to interpret revenue coming into a taxi as the equivalent of driver income. This is not true. It is critical to clarify that revenue per taxi cab does not account for increases in driver costs. During this same period, Austin Taxicab Company increased its lease fee by $20/week. Over the last year Lone Star has increased its lease fee by $60/week. In other words, not only has driver’s hourly revenue gone down but their absolute income has also gone down as they are now paying higher leases. 5. OVERALL, a basic consideration of the ATD data suggests that drivers were hit from several angles during this period. Ridership went down marginally. Their costs of operation increased as leases were increased. Total number of taxis on the street increased thereby reducing the number of fares per hour creating a 26% drop in per capita revenue per cab. All of the above together forced drivers to add over an hour to the length of their workday and in spite of such an addition they made less per hour than in early 2012 or 2011. AIRPORT DISPATCH TDAA collected data from 2009 to 2012 of airport dispatches. The data is summarized in the tables below: Table 1: Impact of 45 permits – Taxi Dispatches From Airport - July to Sept 2011 and 2012 comparison Year 2011 2012

July 23548 21737

Aug 25388 24211

Sept 30139 23691

Total 79075 69639

Percentage (11.9%)

The above table represents data from the same months as the ATD study for total taxi dispatches. A comparison of the figures will yield for us the impact that the 45 new permits have had on the drivers capacity to earn a living from one of their primary market – airport. The above comparison yields the following conclusions:

1. The total loss of revenue can be approximated from the total drop in dispatches in the period July to Sept 2012. The 12% (11.9%) drop points to a very severe impact on drivers’ capacity to make a living during the above months. 2. This is supported by anecdotal evidence gathered from our membership that wait time at the airport has gone up significantly. Drivers report waiting over 2 to 2.5 hours as compared to about an hour at an average prior to this period. 3. This is also consistent with the ATD finding that drivers are working 13% more hours during this period. Table 2: Non Taxi Dispatches from the Airport – 2009, 2011 and 2012 comparison Transport Type 2009 Non Taxi 1368 Dispatches(does not incl Super Shuttle)

2011 2987

2012 4578

Diff 09-12 234.6%

Diff 11-12 53.6%

TDAA also collected data on non taxi dispatches from the airport. The picture as it emerges from this data is revealing and devastating. 1. The total increase in non taxi dispatches from the airport between 2009 and 2012 is over 230% (234.6%). In other words, drivers have lost a large segment of their market since 2009. What is more, this data on non taxi airport dispatches does not include Super Shuttle. In other words, the loss of market is in real terms even greater than the 234% reported. 2. Comparing 2011 and 2012 reveals that over 50% of the 234% increase over 3 years can be accounted for in just the last one year. In other words, taxi drivers have experienced a deep decline in one of their primary markets over the period under assessment. Conclusions The data collected by ATD and TDAA converge significantly to point to a drastic fall in driver incomes in the post 45 permit period under investigation. This conclusion is unequivocal according to both studies. Further: 1. The increases in metered fare have been unable to ameliorate the fall in driver incomes. 2. The uncapped increases in leases have further worsened the conditions faced by drivers. The city regulates the metered fare (the input coming into the taxi) but does not regulate the lease rates (output from drivers’ pockets). This imbalance allows for driver incomes to fall through means that the drivers have absolutely no control over. Other interest groups in the industry – namely the franchise owners – can depress driver incomes at will.

3. The rapid increase in non taxi modes of transport out of a primary market such as the airport has meant that driver interests have been further compromised by the City’s refusal to reevaluate the formula. All other stakeholders in the Austin public transport infrastructure – franchise owners, shuttle contractors, etc – have all increased their incomes while drivers alone have had their wages depressed. 4. The overall drop in ridership, however marginal, it could be hypothesized, indicates that the city’s alleged rush hour taxi shortage has been ameliorated significantly. Based on the above we are forced to conclude and recommend that the City not issue any further permits without undertaking a full review of the formula for issuing new permits and that such formula must index driver incomes as a primary variable. Any effort in the current period to pass Items 27 and 28 would simply indicate that the Council does not care for the well being of a majority minority workforce that serves the City tirelessly.