Austin Taxi Drivers Unionize to Get Their Fare Share


A version of this story ran in the June 2013 issue.

There’s undoubtedly something romantic about driving a taxi: working your own hours in your own way, cruising the city streets instead of being anchored to a desk, picking up total strangers and never knowing where you might take them. And then there’s the economic reality. In Austin, cab drivers earn, on average, just $2.75 an hour after deductions for insurance, taxes and paying one of the city’s three cab companies for the privilege of driving their cars. Austin cabbies have brutally long hours—many work 12- to 14-hour shifts, seven days a week, 50-plus weeks a year—and as independent contractors, they have little job security, no unemployment benefits and no employer-provided retirement or health insurance.

For the three taxi franchises in Austin—Austin Cab, Lone Star Cab and Yellow Cab—the economics are much sweeter. The city has granted the three companies a total of 744 permits. In turn, they pay the city $400 a year per taxi. The companies then lease the permits to the drivers for $250 to $295 a week, or between $13,000 and $15,340 a year (a 3,000-percent markup). For Yellow Cab, which controls more than 60 percent of the market, that works out to nearly $6.8 million a year in revenue from permits alone.

“And nobody sees the discrepancy between those numbers?” asks David Passmore, president of the Taxi Drivers Association of Austin. “We’ve been going to City Council for years saying these things and they say, ‘We hear you.’ But they always vote in favor of the franchise.”

Passmore has been driving for Yellow Cab for five years. He likes the flexibility of the work but thinks the city has allowed the drivers to be exploited.

“I’m struggling right now, man,” he said. “It’s that uncertainty you have to work with each day—each day we start off in the negative.”

That’s where the Taxi Drivers Association of Austin comes in. Formed in 2009, the association is a formal vehicle for representing drivers’ interests. In late April, the association went one step further and formally affiliated with the AFL-CIO, making Austin the third city in the U.S. to see its taxi drivers unionize. But the catch is that with a membership of independent contractors, the association isn’t covered by most U.S. labor laws. Still, Passmore said, the affiliation is an important step in securing better pay, improved conditions and bargaining power.

“I do believe that it will give us some leverage,” he said. “It will better our position, speaking with one voice rather than being individual drivers.”

For the AFL-CIO, the affiliation represents a new tack in labor organizing. “How many workers are filing for union recognition and bargaining for a first contract?” asked Aaron Chappell, an Austin-based labor organizer with the AFL-CIO. The traditional methods of growing new unions are “broken,” he said. “People are going to use nontraditional means to make economic gains.”

The taxi drivers plan to ask City Council to cap the fees that cab companies charge their drivers, create a fairer insurance system that doesn’t leave drivers in the hole after an accident, and impose anti-retaliation clauses to protect union members from being punished or fired for their activities.