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Driven to Ruin: Fares are scarcer for NYC cabbies and automation is on their tail

As published by Peter Rugh in The Indypendent 


Morning rush hour was in full swing, yet the deafening bang that came from Douglas Schifter’s vehicle cut through the noisy clamor of New Yorkers hustling to make it to work on time. Inside a rented Nissan sedan, the 61-year-old professional driver put the barrel end of a shotgun to his head and pulled the trigger at the eastern gate of City Hall.It was a shot heard round the city, where drivers are increasingly feeling the pinch brought on by an influx of new ride-for-hire vehicles. With the taxi industry in the midst of transforming into an app-driven business, Schifter’s suicide was a call to respect the human behind the wheel.

“I cannot survive any longer with working 120 hours [a week]!,” Schifter, who had over 40 years of driving experience, wrote in a Feb. 5 Facebook post shortly before leaving this world. “I am not a Slave and I refuse to be one.”

Unable to make ends meet, despite living out of his car five days a week so as to always be on call, Schifter’s suicide also speaks to the wider dynamics at play between technology and capitalism and comes on the cusp of another wave of change set to transform transportation as we know it: the driverless car.

“It is too late for me so who is next?” Schifter asked.

He blamed Uber, Gov. Andrew Cuomo and two New York City mayors — Michael Bloomberg and Bill de Blasio — for destroying his livelihood. The three politicians played a decisive role in the deregulation of the taxi and livery industry in New York, making it harder for drivers like Schifter to get by. Cuomo and Bloomberg pushed more hacks onto the streets, while de Blasio has so far buckled under pressure from Uber and its competitors. He received more than half a million dollars in donations from the yellow cab companies during his first run for mayor, but once in office refused to place restrictions on app-based car services after Uber mounted a public campaign against regulation.

“He was trying to play catch up on a down-slide of the industry and I know he’s not alone,” Schifter’s brother, George, told The Indypendent. “That’s been his cause, to try and get people — the officials — to go ahead and understand the ramifications of their decision to flood the market [with ride-for-hire vehicles], to allow it to happen, in a state that has a tremendous capability of dealing out legislation, taxation and regulation, of making laws that can and do force the right thing to be done. In this case, they dropped the ball.”

Bloomberg’s Hit & Run

Under the direction of then-Mayor Bloomberg, the city began issuing 18,000 new taxi licenses in 2013. The introduction of the green-colored fleet of cabs was ostensibly done to provide greater taxi access to New Yorkers in the city’s outer boroughs, where rides for people of color were often hard to come by. But it certainly also fit under the rubric of Bloomberg’s free-market ideology. “I am going to fucking destroy your industry,” he reportedly quipped to Evgeny “Gene” Freidman, known once as the Taxi King for the numerous cabs under his domain. By allowing more cabs on the road, Bloomberg helped do just that. Uber and its doppelgangers finished the job.

There were 107,000 ride-for-hire vehicles on the city’s streets in 2017, more than a two-fold increase from when Bloomberg left office, while the number of traditional taxis has remained constant at about 14,000. Since the 1979 repeal of the Haas Act, which had prohibited the leasing of cabs, the taxi industry has increasingly relied on contract labor. Formerly designated as employees, most drivers now have to pay medallion-holding companies for the use of their vehicles, as well as shoulder the cost of gas and tolls. Uber has taken this business model and put it in hyperdrive, going as far as to force its drivers to pay sales and workers compensation taxes.

Gov. Cuomo has come to Uber’s defense on more than one occasion, describing the company as “one of these great inventions, start-ups, of this new economy.” Last year, he signed legislation that granted Uber and other ride-share services license to operate statewide under the authority of the state Department of Motor Vehicles.

Meanwhile, the value of taxi medallions has plummeted. In 2013, a medallion cost $1 million. Today, they are commonly auctioned for less than $200,000. Medallion holders who borrowed heavily to purchase their licenses now find themselves holding worthless documents, undercut by Uber and its competitors and unable to capitalize on their investment.

Hedge funds, seeing an opportunity to sweep up the medallions at rock bottom prices, have been purchasing them in droves. In September, bidders with MGPE, Inc., a front company for an undisclosed out-of-state hedge fund, purchased 46 medallions at just $186,000 each. The medallions had belonged to Gene Freidman, the Taxi King himself, until Citibank foreclosed.

Hands Off the Wheel

Should Uber or Lyft, utilizing predatory pricing models and flush with venture capital cash, monopolize the taxi market, what’s to stop these multi-billion dollar companies from doing away with drivers all together? Nothing it seems, but their technological ability to do so — a roadblock that Uber, along with Alphabet-subsidiary Google and the big automakers are diligently working to lift.

Proponents of driverless cars argue that they will be safer, particularly since 94 percent of all traffic accidents are caused by human error. They also contend that they will reduce time and fuel usage, given that driverless cars will be able travel closer together at constant speeds and without a lot of the fuel-guzzling hardware of traditional cars. “A million fewer people are going to die a year,” Uber’s former CEO, Travis Kalanick, told Business Insider in 2016, before he was forced to resign last year amid allegations he created a toxic work environment at the company and video of him screaming at an Uber driver went viral. “Traffic in all cities will be gone. Significantly reduced pollution and trillions of hours will be given back to people — quality of life goes way up.”

Uber also expects driverless cars to bump up its profit margins.

While safety claims remain to be tested, it is possible that by doing away with typical inhibitors to vehicular travel like fatigue and intoxication, automated cars might in fact lead to an increase in emissions. It is easy to imagine someone, unable to find a parking spot in Manhattan, sending their Tesla looping around the block while they sip a few cocktails in Soho, then, hopping back on board for the long ride back to Connecticut, which, hey, isn’t such a slog now that the automated driving system does all the work.

Then there is the question of technological control. Technologists have raised concerns that Google, a company that traffics in information and makes its money selling ads, has hopped into the driverless car space. What happens should your Waymo vehicle decide to take an unexpected route home, forcing you to stop at the store of a favored advertiser?

These dilemmas aside, what will happen to the humans? Specifically, the half-million taxi and rideshare drivers in the United States, not to mention the nation’s 3 million truck drivers? It’s a quandary borne of what Peter Frase, author of Four Futures: Life After Capitalism describes as the “automation anxiety endemic to industrial capitalism.”

From the cotton mills in 19th century England to the assembly lines in 1970s Detroit, “as long as there has been industrial capitalism, there has been that drive to economize on labor, to increase profits, to make more with less by needing fewer workers,” Frase told The Indy. “The question always, whether we’re talking about the Luddites or the automation of cars, is who benefits? Uber has driverless cars, who benefits from that? Is it the people who used to be taxi drivers or is it just the CEO and stockholders of Uber? It’s a political question and it’s a class question.”

Moving Right Along

Current laws governing automobile safety were written assuming humans are driving our cars and trucks, but perhaps not for long. New federal legislation intended to govern the deployment of driverless cars was approved with bipartisan support by the House of Representatives last fall. A similar measure received the approval of the Senate’s Commerce, Science, and Transportation Committee. Both pieces of legislation would grant the Department of Transportation the authority to preempt a patchwork of state laws governing automated vehicles and allow automakers to circumvent certain safety requirements like brake pedals.

The Trump administration is supportive of the new laws, though the Senate bill has been held up in the wider body due to concerns the exemptions it contains — lifting airbag requirements, for instance — are too broad. Sen. Ed Markey (D-Mass) has also raised the alarm that the Senate’s bill does little to protect consumer privacy or guard against the potential for cyber attacks.

Yet technology companies and auto manufacturers don’t anticipate these impediments will remain in place for long.

Ford Motors has plans to roll out a line of fully automated cars by 2021. Not to be outdone, General Motors filed a petition in January with the National Highway Traffic Safety Administration (NHTSA) through its subsidiary Cruise to grant it a waiver to federal safety standards in order to deploy 2,500 driverless cars as part of a rideshare program it expects to launch in San Francisco next year. The vehicles lack brake pedals or steering wheels, similar to cars already tested by Google’s Waymo at lower speeds.

NHTSA is reviewing General Motors’ application. If current driverless car legislation is approved on Capitol Hill, it will allow the agency to issue 100,000 such exemptions per automaker per year.

For its part, NHTSA doesn’t seem too keen on developing safety standards. Under the direction of Transportation Secretary Elaine Chao, it issued new guidelines for automated cars last year. The guidelines are voluntary. Echoing the mostly-bipartisan enthusiasm for the vehicles at the Detroit Auto Show earlier this year, Chao said her goal is to lift “barriers to the safe integration” driverless automobiles.

A former Secretary of Labor under George W. Bush, Chao had little to offer in the way of consolation for drivers whose jobs are at risk. “In the long run, new technologies will create different types of jobs, but the transition period can be very difficult for dislocated workers,” she said, before inviting people to a career fair staged by the Michigan Economic Development Corporation at the auto show.

Where are the brakes?

It’s not that driverless cars mean an immediate pink slip for America’s hacks, bus drivers and truckers. There will still be an intermediary period where a human will need to be on hand. Driving will simply require a different set of skills. Yet it is easy to imagine a day when an Uber arrives and the driver’s seat is empty.

“Obviously, there is going to be a transition period,” said Larry Willis, president of the AFL-CIO’s 32-union Transportation Trades Department. “But they’re not doing this because it is a ‘gee-that’s-really-neat’ concept. They’re doing this to save money, cut costs and build their profits. That’s what companies do, but that’s why God created labor unions.”

Willis wants any driverless car legislation Congress passes to exclude commercial vehicles. But in the long term, he knows he’s facing a challenge. Ultimately he says something similar to a federal trade adjustment assistance program that offers training and financial assistance to workers who have lost jobs due to cheap imports is called for — only one that is effective. In the past, he says, particularly after NAFTA, “trying to prove your job was impacted by trade was difficult, the benefits that workers received were limited and it just wasn’t really set up in a way to make sure there were jobs for those who were displaced really through no fault of their own.”

The call to save jobs, however, is a “defensive battle and it’s a losing battle,” says Peter Frase. “It’s pitting one set of workers against everyone else who can see this new technology coming along and will wonder, ‘Why are these people being such jerks and resisting it.’”

He compares the situation facing drivers to that of fast food workers who have fought through the national Fight for $15 campaign to raise wages. Critics, including numerous fast food franchises, warned them to pipe down with their demands, otherwise, they would be replaced by iPads at cash registers. Low and behold, touchpad technology is slowly being integrated into the service industry. Borrowing from the Danish sociologist Gøsta Esping-Andersen, Frase calls this the “decommodification of labor.”

“We live in a society where our labor and therefore our selves are a commodity,” Frase says. “Our access to a livelihood is dependent on our ability to sell our labor.” When our labor is decommodified by technology, demands for positive rights such as universal healthcare and the more recent concept of a universal basic income (UBI) become all the more crucial. Our right to exist and persist shouldn’t be contingent on our ability to work, especially as automation increasingly displaces our need to do so. Hence, rather than rallying to preserve jobs on the endangered species lists, Frase asserts the labor movement must push for strengthening the welfare state.

Frase cautions that UBI, the idea that everyone deserves a minimum stipend on which to live, has its limits, pointing out that under capitalism a large chunk of whatever is dolled out would likely go toward lining the pockets of landlords and others who control the necessities of life. But having less of a concern for where the next paycheck will arrive from could free up more time for political organizing, fighting for another system — that “Star Trek” future that is waiting for us.

In the interim, says the AFL-CIO’s Larry Willis, “We’ve looked at UBI. We’ve looked at what other nations have done and what we’ve done in this country to deal with shifts in the economy, but I think we should be focused on trying to create a good job market and good job opportunities. People want to work. They want to earn a living. That is engrained in the ethos of this country.”

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