From the Chicago Dispatcher
June 2009
By George Lutfallah
Dear Dr. Bruno:
I recently had the opportunity to read your study of Chicago taxi driver income in which you concluded that drivers earn an average of $4.38 per hour. First I would like to thank you for taking an interest in our industry. I am glad to see that someone from my alma mater was studying the income of cabdrivers. I know first-hand how difficult it is to earn a living as a taxi driver in Chicago. Second I would like to commend you on the obvious hard work you put in to this study.
However, I wanted to point out a few blatant problems with your study that undermine the credibility of your conclusions.
Surveys are unreliable ways to study cabdriver income
You conducted your study by surveying Chicago taxi drivers. The problem with this methodology is that it is nearly impossible to trust the validity of driver accounts of their income. Taxicab fares in Chicago are still mostly paid in cash. Many drivers don't keep good records of the money they make. Thus their memories may be selective when questioned about their incomes. I haven't seen your questionnaire but I wonder if you asked cabdrivers in your survey if they actually keep trip sheets or other written records of their income that are updated frequently.
Also drivers aren't always accurate about reporting their incomes. Interestingly, this cuts two ways. There are times when drivers are generally believed to underreport their incomes and there are times when drivers are known to over report their incomes.
Drivers have been known to underreport their incomes to two groups - their passengers and to people who are asking in an official capacity. When asked by passengers how well they're doing, drivers will often understate their income for two reasons. First, drivers don't want their passengers thinking that they're sitting on a lot of cash in case those passengers have any notion of robbing them. Second, some drivers will understate how much they're making in hopes of receiving a bigger tip out of sympathy.
When someone in an official capacity like a lease collector or the IRS is asking about how much money drivers make, you'll tend to hear low figures. You should be aware that a lawyer by the name of Donald Nathan who regularly writes for the AFSC-UTCC - the group that prompted your study - wrote the following last September in a public forum: “Of the thousands of cabdrivers I've represented as plaintiffs over the years, I'd estimate less than 50% reported income at all to the IRS. Of those, 75% reported net income of much less than $10,000 per year. And it was hardly uncommon for a driver to be claiming to have been making net income of $3,000 or even less and supporting a family at that sub-poverty level. Who in his right mind would believe such numbers? It was always so easy to attack the credibility of a cabdriver with tax returns that were obvious bullcrap.”
There are also times when drivers will overstate how much they make. Oftentimes when drivers talk to each other, they will brag about how much money they are making. I used to drive for a company that had a radio system in which drivers could talk to each other, and hear each other as they talked to the dispatcher. Over the air some drivers would routinely ask for directions for long, lucrative destinations, just to make other drivers believe that they got a good fare when in reality they were taking a break or going home for the evening. I think a big part of it is to demonstrate to other drivers a superiority in sniffing out the good fares or to incite jealousy. It's bragging.
Consider this: On October 22, 2007, Chicago taxi driver Steve Kim who is now the Vice Chairman of the UTCC told me that he made $3,000 a week on average driving a cab. We were meeting the day before a hearing for a fare increase, for which Mr. Kim was advocating. At first I thought I had misheard him and even repeated the number, which he said was right. I asked him rhetorically why he was pushing so hard for a fare increase.
Since your study was initiated by the AFSC-UTCC, I assume that Mr. Kim was a respondent. Your study was anonymous but I wonder if you'll have anybody who claimed to make anywhere near that. Then again, I suppose it’s possible that the average amount of money Mr. Kim made in a week could have changed by the time he took your survey, if he took your survey. If it helps you, Mr. Kim had informed me that he leased a medallion and owned the vehicle. I don't know if that is still his arrangement or if it was at the time he would have answered your survey but I thought you should be aware of this information.
here is fact, i have been driving for 10 yrs.
i used to make about $100 daily after lease and gas few yrs ago and these days , i make less than $50 daily after gas and lease and i drive 12 hrs.
i make about or less than $5 an hour and that is fact and almost same for all other cabbies.
others can say more or less but that is how much we make.
on top of the minimum below wage, we are treated very unfairly by this city with unfair regulations and flooding of streets with too many new incompetent cabbies.
can't wait to quit this for good!
