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Does it pay to drive a cab in D.C.? A look at the fair wage debate in the nation’s capital

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For Larry Frankel, veteran D.C. cabbie, driving a taxi is like fishing. You have to know the spots.

When Congress is in session, he prowls Capitol Hill at lunchtime; during the evenings, he cruises out-of-the-way restaurants; and in the wee hours, around closing time, he lurks in front of the most popular bars.

At the end of an eight- or 10-hour shift, what he has to show for it amounts to about $12 an hour after expenses.

Plus, an aching back.

“Basically, we’re getting slammed out here,” he says, swinging his 2003 Grand Marquis to the curb recently. “If cabbies are a little grumpier these days, there’s a reason. We’re hurting.”

The District of Columbia implemented a new meter system and fares three years ago, and today few, if any, major U.S. cities offer such a sweet deal for the riding public. On the other hand, as Frankel, 58, and his cabbies have argued loudly ever since, the flipside is that cabbies are being shortchanged with virtually every fare.

Now the divide over taxi rates is about to get a thorough hearing after three years of strikes and lawsuits from drivers, and the dispute reflects the broader national debate over what is a fair wage and the virtues of market forces.

The price of a taxicab ride in the District ranks among the lowest for major U.S. cities, according to a survey by The Washington Post. They’re lower than any surrounding jurisdiction, too. And, unlike many cities that limit competition through licensing, the District generally has ensured a plentiful supply of cabs and cabbies.

The result is the kind of grimly efficient system that economists often tout: Prices are low for consumers, and while cabbies might complain, there are plenty of people still willing to get into the business. It does, after all, offer flexible hours and independence. Most of them work as independent contractors who lease or own their own cabs.

But whatever the virtues of cheap cab rides, the rate change has stirred the ire of the city’s roughly 8,500 cabbies, many of them African Americans and immigrants from Ethiopia, Pakistan and Iran. Since the meter system replaced the old “zone” system in 2008, their earnings have dropped about 30 percent, they say, forcing them them to worklonger hours, sacrifice time with their families and endure the aches and ill health that come with them.

“We sit for hours at a time — 12 hours a day — and we don’t have time for exercise,” Nathan Price, chairman of the D.C. Professional Taxicab Drivers Association, told city officials in remarks that echo across the city’s fleet. “Having less money means it’s harder to eat right. When you’re working longer hours, you don’t have time to see your family. The stress keeps adding up. And it’s killing us.”

The cabbies, as a result, are calling for solutions that many market economists consider abominations: Even though there’s no shortage of people willing to work as cabbies, they want the D.C. government to raise fares. Some, moreover, are calling for restrictions on the supply of cabs or drivers. In Frankel’s terms, this would mean fewer fishermen.

* * *

As the Occupy Wall Street protests provoke a national debate about fair compensation, a formal petition on driver pay has been filed with the D.C. Taxicab Commission and is expected to receive a full hearing in coming months.

Amid the passions and economic abstractions being bandied about in the debate, it might be helpful to get a sense of the particulars.

Consider Frankel’s business. His is a simple case: He leases a cab and does not have dispatch service.

He spends $180 a week for the lease, which includes $35 in liability insurance. He usually drives about six days a week, so that’s about $30 a day. He spends about $35 a day in gas. His yearly taxi/limo license costs $125. So on a daily basis, that cost is negligible.

Overall, as a result, his daily costs are about $65.

As for his revenue, in a typical nine-hour day, Frankel aims to earn between $150 and $200 in fares and tips. He gets about two or three fares per hour. Call it $175. So, subtracting expenses from his fares and tips, he makes $110 in a day.

The bottom line: He makes about $12 an hour, which is in line with what other cabbies report.

Is that fair?

* * *

If a price is fair when someone is willing to accept it, as economists might say, the existing taxi fares the District are fair. There are plenty of people willing to work as cabbies at those rates.

“I would say a price is effective — not sure about fair — if at that price, enough people on both sides of a market are happy with the outcome,” said Russell Roberts, an economics professor at George Mason University. “The fact that thousands of people are eager to drive cabs under the current fare structure suggests that it is sufficiently generous to cabbies.”

In fact, the city a few years ago imposed a moratorium on new licenses for cab drivers. If the city began accepting applications again, D.C. Taxicab Commission Chairperson Ron M. Linton said, “we’d have 1,000 people lining up to become cabbies.”

Indeed, some cabbies seem to revel in the work.

“You get to talk to a lot of people,” Frankel said.

Moreover, the existing rates offer what the District ordinances consider a “living wage.” In its laws regulating what contractors must pay their employees, the District has defined the “living wage” as $12.50 an hour, and the taxicab rate appears to be roughly in line with that.

But from a variety of other perspectives — the pay cut that came with the new rates, how they stack up with other jurisdictions and the nature of the work — the anger seems justified, and Linton believes that a raise is appropriate.

The existing low rates were ushered in by former Mayor Adrian M. Fenty, a polarizing figure in District politics.

The meters “will meet the needs of the drivers and also the riding public,” Fenty said at the time.

Indeed, the shift to meters from the old zone system, which often baffled riders, was long overdue by most accounts. The basic rate is now easier for most passengers to understand: $3.oo for the first sixth of a mile, and then $1.50 per mile afterward, plus waiting time.

Fair or not, Fenty might have lost his bid for reelection in the back seats of the District’s cabs. The ire of the cabbies was intense enough that they printed thousands of flyers denouncing him during the campaign, and they take some credit for his downfall in the 2010 elections.

“For two years, you basically had every cabbie in D.C. telling their passengers that Fenty was a bad man,” Frankel said with a chuckle. “That can’t be a good thing.”

Fenty did not respond to requests for comment.

The drop in revenue that followed the new rates explains much of the anger. But the rates rank at the bottom when compared with other jurisdictions locally and around the nation.

Consider, for instance, fares for the 26-mile trip from downtown to Dulles International Airport. Heading there, the fare is about $43. The reverse trip costs about $55.

Why the difference? The return trip is under Virginia rates, which are higher.

And while $12.50 might be considered a “living wage,” as independent contractors, cabbies do not get health benefits, pensions or workers’ comp. Driving a cab each day can cause a range of ills.

“When I got into this business, someone told me something that I really took to heart: Taxi drivers die from the waist down,” Price told city officials. “At Yellow Cab, we’ve got what we call the card room. It’s where the drivers can come to play cards or checkers, and relax a little after their breaks. The card room has a wall of pictures of drivers who are deceased or have become sick since 2008. They’re dying from heart attacks, strokes and diabetes.”

Likewise, Frankel attributes the bursitis in both of his shoulders to his years behind the wheel.

“Most people know only what it’s like to be in a car for eight hours when they travel somewhere to go see family,” he says. “But think of doing it every day, over and over and over.”

Then there’s the hassle of passengers, many of whom are suspicious that they’re being overcharged — even with the meters. Last month, according to police, driver Domingo Ezirike was shot dead after a dispute with a passenger over the heat, the radio and a difference of 75 cents in the fare.

It is the far more mundane that has angered most cabbies, however.

“Personally, the longer hours have crippled my family life,” Negede Abebe told city officials. “Whereas I could spend two hours a day or more with my three children, I am now lucky to see my 6-year-old daughter for 40 minutes a day. In a typical workweek . . . I rarely see my other two middle-school-aged children. It is heartbreaking to be unable to play a larger part in my children’s lives.”

“There is a lot of stress for me and my family,” said Haimanot Bezuayeh, 42, the father of two school-age kids. “I am not able to provide all the things necessary for a family.”

Idris Yusuf, 36, said that it is almost impossible to help support his parents and sisters in Ethiopia with what he makes taxiing with his 2001 Ford Windstar van.

“I couldn’t even pay my credit card bills anymore,” he said. “I tried to work more, but I got back problems,” he said. “Now I’m looking for a different job.”

Linton, who has been chair of the taxicab commission since August, agreed with the thrust of the cabbies’ complaints, he said this week.

The cabbies “have taken a hit,” he said. “I think that there’s going to have to be an increase in rates. I think that’s intuitive.”

He stopped short of weighing in on what fair wages would amount to, though he said it would be determined through forthcoming public hearings.

“What I don’t yet know,” Linton said, “is, ‘What is a fair raise?’ ”

© The Washington Post Company