About the Taxi Working Group

Along with other inland transport workers, those working in the taxi industry face a range of problems. Although circumstances vary greatly from country to country – in terms of licensing arrangements, degree of regulation, type and size of vehicle and employment contracts – most drivers are low paid and work long and irregular hours. Formal employment contracts are rare, and many are paid on a commission basis. Job insecurity and the absence of social protection are common features.

The ITF believes that the taxi industry, in whatever form, should be regulated as part of an overall system of planned public transport, and that this regulation should include the regulation of the employment relationship via a formal wage contract.

In order to raise the profile of taxi drivers, the Federation established the ITF Taxi Working Group, which met for the first time in 1998. Delegates representing transport trade unions from all the ITF regions attended and agreed a resolution which called on all affiliates to campaign for recognition of the taxi industry as part of a country’s public transport system, and for the appropriate regulations.

As background to the work of the group, the following report of taxi operations in a sample of countries representing each ITF region has been compiled.The selection is based entirely on the availability of information, but the combined reports do provide a snapshot of the range of problems facing the industry.

The regions are:

• Africa
• Asia Pacific
• Europe
• North and South America

Ghana
Ghana Private Road Transport Union
17,000 members

Accra is a city of two million people. Since the cessation of full-sixe bus operations by the Omnibus Services Authority all public transport is by “tro-tro” midi and minibuses, shared taxis and mammy wagons (wooden bodied trucks).

Generally fixed routes are operated by the “tro-tros” and vehicles leave their terminals only when they are full. 12,000 “tro-tros” are responsible for more than 50% of the city’s vehicle trips.

30,000 shared taxis operate.

Ghana Private Road Transport Union regulates services and sets fares.

Ivory Coast
Private “Gbaka” minibuses serve the suburbs and outer areas of Abidjan, a city of 3 million people. The minibuses operate on set routes with no defined stops.

Smaller taxi vehicles operate on different networks to the “gbakas” and carry 25% of demand.

South Africa
South African Taxi Union (SATU) - not an ITF affiliate but in the process of merging with ITF affiliate Transport and General Workers Union
25,000 members

The predominant taxi type is the ten or fifteen seater minibus operating on a fixed route basis. It is estimated that there are between 120,000 and 200,000 workers employed in the industry. For every 25 drivers it is estimated that one support person is employed (in jobs such as queue marshals, cleaners, security and administration). At least half of all minibus operations are run illegally leading to uncontrolled competition. Violent confrontations between owners and between drivers is common in the industry and the homicide rate is high. 80% of taxi owners own only one or two taxis, but the larger employers own anything between 20 and 50 vehicles. The industry has a commuter sector and a long distance sector. Vehicles are on average older than ten years and many owners do not have the capital to replace.

Most drivers are paid on a quota system with the taxi owner setting a target of passenger numbers for a day. Drivers are then paid a percentage of revenue for the week. This results in long hours of work (many are known to work from 3am to 10pm), the overloading of vehicles and speeding. The industry is notorious for horrific accidents. Passengers also complain heavily of driver abuse and delays in reaching a destination whilst the driver cruises for more passengers.

Taxi owners (both individually and via their associations) have been extremely hostile to unionisation. The union’s approach has been to target the larger taxi owner associations with demands for minimum conditions as well as to engage with government in the search for workable regulations including minimum labour standards. As part of its campaign for recognition in 1993 the union led a blockade of Johannesburg and Pretoria. The primary issue in the protest was harassment of drivers by traffic police. The intention of the protest was to expose the conditions which force drivers to overload and speed. Taxi drivers are now officially recognised as employees and the Department of Labour has committed itself to publishing a Wage Determination for the industry which will set down minimum standards. In the long term the union hopes that such minimums will be negotiated directly between owners and taxi workers.

In the meantime the government in 1995 established a National Taxi Task Team, a tripartite consultative body whose task it is to produce a long term strategic plan for the industry. The NTTT started off by holding public hearings, through which over 10,000 people were consulted. SATU is a full participant in the Task Team. The key issues which the NTTT is addressing include regulation of the industry; restructuring the industry in terms of taxi associations; safety; economic viability of the industry within an overall transport policy; and labour relations.

One of the first jobs undertaken by the Task Team was to spearhead a campaign to get unlicensed operators to register their vehicles. The campaign was fairly successful but this has not as yet substantially reduced the intense competition between owners. One business strategy being considered by the NTTT is the establishment of co-operatives of owners. These co-operatives would produce economies of scale in the purchase of car parts, petrol, and vehicles. It is hoped that over time the smaller operators would merge and more viable economic units would be established. The advantage for workers would be that this would create regionally based bargaining units.

The basic costs of the co-operatives (including staffing) would initially be government funded. Taxi owners would be expected to pay taxes in return.

The taxi permit system as well as a range of training proposals are also being given attention. SATU has proposed the establishment of a Taxi Industry Training Board. Vehicle safety regulations are also to be tightened up

India
Auto & Taxi Drivers' Union
Karnataka, Bangalore
affiliated to HMS
5,000 members

Nearly half a million passengers are carried every day by various forms of public transport. Only 25% of the roads can support buses and other heavy vehicles. The autorickshaw and two wheelers therefore dominate. Eight years ago there were 130,000 two wheelers, 18,340 autorickshaws, 11,000 private cars, and 2,700 government owned buses operating. As a consequence of economic liberalisation (resulting in massive migration to the city as well as deregulation in the transport sector) there has been rapid expansion in the sector. There are now 46,383 autorickshaws, 730,000 two wheelers, 35,000 private cars and 5,766 buses.

There are nearly 100,000 autorickshaw drivers in the city and 42,000 bus workers.

The union approached the State Government to regulate the industry but the High Court ruled that regulation rests with Central Government. The union is planning a joint initiative with other Indian unions to petition Central Government in this regard.

In addition to campaigning for regulation in the industry, the union has organised a group personal accident insurance scheme for members. In addition, with the co-operation of the Indian Medical Association the union has facilitated free medical checks of drivers, with an emphasis on ECG and blood pressure checks. The union also runs a service station where its members can get their vehicles serviced and has established a co-operative society for rotating loans for vehicle repair and other needs including education. The union rewards the best rickshaw drivers with a certificate and a free uniform.

Japan
(From Urban Transport Bulletin April/May 1997)
Japanese Taxi Workers’ Union (Zenjiko Roren)

The union was founded in 1947 and comprises 38 regional organisations and 680 affiliated unions with a membership of 51,000. Prior to 1952 taxi drivers were paid on a 20% commission basis but as a result of a union campaign radical changes to the pay structure were introduced. The campaign was for the “elimination of Kamekaze (cowboy) taxis” and emphasised the relationship between accidents and excessive working hours and piece-rate pay. The campaign won widespread public support. As a result of the campaign government regulation was introduced which eliminated piece work and established a minimum wage guarantee. Driving hours were regulated and rest periods, holidays and various welfare facilities were introduced. The system remains the framework for working standards in the industry today.

Various interest groups have from time to time advocated the liberalisation of the industry. The government and financial institutions have cited deregulation of the taxi industry as a priority in their economic reform programme. Proposals include the introduction of zone fares which would lead to greater flexibility in setting fares. Zenjiko has consistently opposed deregulation calling instead for a comprehensive transport policy recognising the taxi industry as part of the public transport system.

In March 1997 Zenjiko Roren and Shitetsu Soren held a joint rally of 4,000 taxi workers followed by a drive to the Ministry of Transport where demands on transport policy were submitted.

Korea
Federation of Korean Taxi Workers’ Unions
60,000 members (June 1997)

The industry is divided into company taxis employing 157,676 drivers and private taxis (owner-drivers) employing 128,384. The FKTWU organises the former category. The industry grew rapidly in the 1980’s but growth has slowed down considerably since the expansion of the subway systems in Seoul and Pusan in the 1990’s. In March 1997 there were 1,814 taxi companies nationwide owning 87,403 vehicles. Until May 1997 the FKTWU had a membership of 90,000. However 30,000 members withdrew from the organisation to form another. FKTWU is making every effort to reunite the union. FKTWU comprises affiliated unions organised at company level but wishes to transform itself into a national industrial union.

Wages of taxi drivers are amongst the lowest of all workers, and certainly the lowest in the transport sector. Although the agreement with FKTWU specifies that working hours should not exceed 8 hours a day, many two-shift workers end up working ten hours or more, and one-shift workers find themselves working sixteen hours or more. In the small cities working hours are even more excessive.

The lease system operated in Korea until the mid 1980’s when companies became obliged to pay a regular monthly salary in terms of an agreement with the FKTWU. Since the early 1990’s however the leasing system has been restored albeit in a different form. Taxi owners now commonly sell their vehicles on a lease-hire basis to drivers, as opposed to renting them. The FKTWU is vigorously opposed to this development. Their opposition has resulted in a legislative change prohibiting the leasing system. However the new regulations have not yet come into effect and the FKTWU anticipates considerable resistance from employers and difficulties in changing the wage system.

Meanwhile the government has attempted through various other means to deregulate the industry, in line with deregulation throughout the economy. The basic standard of licensing has been relaxed including the precondition of minimum necessary capital to establish a taxi company and the lengthening of limits on the period of use of a taxi. The government and employers have also attempted to relax the rest system but worker opposition has prevented this. The FKTWU’s position on deregulation is that social and safety regulation should not be relaxed; that entry regulation can be relaxed with the precondition that the total number of taxis should not increase; and that any deregulation should not worsen the working conditions of taxi workers.

Mongolia
(From ITF News 4/1997)
Mongolian Transport Workers’ Union

Until 1991 when it was privatised, the industry in Ulan Bator was publicly owned. Under public ownership drivers received a basic salary with additional commission based on performance. All regulations were abolished and now anyone can become a taxi driver using any vehicle. There are four large companies in the capital city - all of whom are operating on a lease system. The union which organises about 50 per cent of the drivers is opposed to the lease system and has demanded the re-introduction of the fixed salary system and re-regulation of the industry.

Sweden
(From Urban Transport Bulletin April/May 1997)
Swedish Transport Workers’ Union

The industry was totally deregulated in 1990, becoming overnight one of the most liberalised in the world. The number of cars doubled in the space of a few years and fares fell dramatically. Most large companies collapsed and the number of one-car companies increased immediately to around 7,000. The taxi owners’ association terminated its collective agreement with the Swedish Transport Workers’ Union (STF) immediately after deregulation. Previously taxi drivers earned a decent salary based on a fixed rate per hour and two variable rates dependent on kilometres driven and number of trips. However the new system made taxi drivers dependent on commission.

Weakened by the above, the union negotiated a compromise agreement with the taxi owners whereby the commission system was accepted, but which guaranteed a minimum wage, annual leave bonus and some other social benefits.

In 1994 as a result of pressure from the union and the worsening reputation of the industry for unscrupulous practices the government finally conceded that it was necessary to re-introduce some measure of regulation. Regulations were introduced concerning the qualifications of drivers, and the police and public authorities were given the right to remove those with criminal records from the business. The taxation authorities stepped up their activities against tax evasion and fraud.

The union is currently demanding that all taxis should be obliged to connect to a taxi ordering centre. The so-called free taxis in operation are impossible to control. The union also continues to campaign against the pay-by-commission system. STF anticipates a long struggle ahead to bring order back into the industry so brutally altered by a political decision.

Norway
(From Urban Transport Bulletin April/May 1997)
Norwegian Transport Workers’ Union

The industry comprises about 5,000 single taxi companies and about the same number of employers. The licensing system allows for every owner to have a maximum of one car and one reserve car for peak hours. Local authorities decide the number of licences to be issued. Most drivers aspire to become owners - but in most cases it takes over ten years before being granted a licence. The industry is dependent on reserve drivers who outnumber permanent drivers and have the effect of keeping pay and conditions at the lowest possible level.

Taxi drivers in Norway are amongst the lowest paid group of workers. As a consequence many drivers work excessive (and illegal) hours to make up the wage. The industry is not covered by a number of social and welfare benefits which apply to most other workers - including severance pay, negotiated early retirement, training funds and welfare leave. The union has a national collective agreement with the taxi association but by its own admission the agreement has little practical significance as it is hardly applied at local level.

Three options for transformation of the industry are under consideration by the union. These are: total liberalisation of the industry (proposed by government and vigorously opposed by the union); giving licensed taxi-owners with approved financial strength the right to have a minimum number of cars in operation (e.g. 10-25 cars); and the transfer of employers’ responsibility to taxi centres. The second option is not favoured by union members as it would limit the chances of becoming an owner driver. The union recognises that prerequisites for positive change in the industry include a higher level of union organisation, a change in the attitude of drivers and owners, changes in regulations and the establishment of enforcement authorities to safeguard the interests of workers and the public.

Netherlands
(From ITF Urban Transport 1/97)
Vervoersbond FNV

A government commissioned study concluded that existing regulation entrenched the divide between taxis and other forms of public transport by keeping fares high and discouraging the interface between different modes. The study also argued that the legislation left the door open for unsupervised companies to profit by leasing taxi-operating permits at very high prices. However the Minister of Transport’s response to these findings was unacceptable to taxi drivers, as he recommended widescale deregulation of the industry. In particular the Minister recommended the abolition of the limit on the number of licences, and the abolition of regionally determined tariffs. He proposed that fares should be left to the market on a supply and demand basis and that the registration of taxi drivers should be simplified.

The proposals sparked off widespread protests of taxi drivers throughout the country in early 1997.

Argentina
(From Urban Transport Bulletin April/May 1997)
Taxi Drivers’ Union of the Federal Capital (Sindicato Peones de Taxis)
Buenos Aires
10,500 members

Beunos Aires has 38,653 licenced taxis and an unknown number of private-hire cars which are not licensed. There are 40,000 drivers of licensed taxis. The overcapacity of taxis has contributed to a fall in taxi drivers’ earnings, although the main factor has been a fundamental change in the earnings system. Until the 1980’s drivers were paid a percentage of takings. However this changed to a hire contract system whereby the driver pays a fixed amount for the use of the vehicle for a period of 12 or 24 hours. The driver is responsible for fuel and tyre wear costs, as well the payment of social security contributions.

The changes resulted in widespread demonstrations by taxi drivers and in 1982 under new leadership, the Taxi Drivers’ Union initiated a campaign for a collective agreement. Other demands included the recognition of taxi drivers as employees (not self-employed) and a guarantee of 30% of taxi receipts as salary. In 1988 a collective agreement was signed. A campaign for a collective medical scheme followed which resulted in 1990 in the establishment of a Taxi Drivers’ Medical Scheme. 35,000 drivers are now covered by the social welfare protection scheme.

Fraud and evasion by taxi employers was the next target and after pressure was put on the government various decrees were passed in 1996 which laid down the single status of employee for all taxi drivers who do not own a vehicle. Each driver is now issued with a plastic identity card which has to be carried at all times whilst on the job.

USA: national
The taxicab industry nationally is believed to be worth $6.5bn and to employ nearly 300,000 people of whom 225,000 are drivers. It has been estimated that the industry transports more passengers than all US mass transportation systems combined. Before 1983 twenty one cities deregulated taxicabs in whole or part. This resulted in a significant increase in new entries as well as a decline in operational efficiency, an increase in highway congestion and environmental pollution, an increase in rates and a decline in driver income.

USA: New York
Taxi Drivers and Allied Workers Union (Local 3036 SEIU), not affiliated to ITF.
Drivers of about 1,800 cabs (mostly of long established fleets) are unionised.

There are 11,787 licensed taxicabs and 40,000 licensed taxi drivers in New York. The number of licensed taxis is capped in law, and no new licenses (known as medallions) have been issued for over 50 years. Licenses can be legally bought and sold on the market for vast sums of money. 3,670 taxis are driven by the medallion owner with most other cabs being leased to two drivers on a double-shift basis. Fleet sizes vary - with a growth in minifleets consisting of just two vehicles. Under the lease arrangement, which has been operating legally since 1979, a driver pays the taxi owner a flat amount for each shift. Drivers take home every marginal dollar above the lease fee and gasoline costs. There are no fringe benefits paid for by the owner. The only form of protection taxi drivers have is workers’ compensation. The union agreement guarantees a share of any fare increase and most other taxi owners follow suit. About 400 new drivers are licensed every month, and the turnover is extremely high. Drivers mostly come from the most marginalised immigrant communities and over sixty languages are spoken by them. 1.1% of drivers are women. In 1994 driver take-home pay averaged $6.26 to $8.24 per hour. Revenue from 226 million passengers totals $1 billion annually. Only one in twenty drivers eventually becomes an owner.

In addition there are 30,000 licensed for-hire vehicles and 600 bases from which they operate.

The licensing of both taxicabs and for-hire cars is controlled by the Taxi and Limousine Commission (TLC).

Taxicab passengers frequently complain of poor service and reckless driving. Some have suggested that deregulation and open-entry would improve the system, but informed critics argue that it is the lease system which is to blame. While taxi owners are able to earn enormous profits which inflate the value of licences, the drivers remain poorly paid and insecure. The average lease driver works 11-hour shifts and they have no paid holidays, health insurance, social security coverage, unemployment insurance or pension. It is estimated that the working day increased by 15% after the introduction of the leasing system and that income on an hourly basis dropped by 23%.