City of Chicago Faces Cab Driver Lawsuit

On a weekend night in Chicago the majority of cars on the road are taxis, transporting tourists and locals around the city in search of a good time. The nearly 13,000 cab drivers in this city are undoubtedly an integral part of Chicago’s livelihood, but they are not without their own systematic grievances. This month, one headstrong taxi driver filed a lawsuit seeking to establish the city, instead of individual cab companies, as her full or part employer. Wage and hour attorneys believe that this decision holds much significance for the city of Chicago and could be a landmark case for the American taxi industry at large.

Anyone who has seen the inside of a taxi in Chicago recently may have noticed that meter rates are $1 per passenger (and another dollar for each additional passenger), plus a flat rate (at least $2.25) and charges according to miles or time. The lawsuit is based on the recent regulations set forth by the city which increased the maximum lease rate cab companies can charge drivers to rent its cars. It is standard practice that nearly all cab companies charge the maximum price. Although this lease price increased, the flat meter rates within taxis were kept the same, so drivers were being forced to pay more for their cars while charging the public the same rates as before.

A single mother of two, Melissa Callahan filed the lawsuit on behalf of herself and her colleagues, most of whom are immigrants and unable to find legal basis of funds for such litigation. Callahan wishes to establish the city of Chicago as her full, joint, or part employer due to the regulations she and her colleagues are subjected to. Regulations extend further than just taxes and lease rates, however. Chicago also controls driver dress codes, courtesy, and payment options, notoriously forcing reluctant drivers to accept credit cards. In most cities, these regulations are kept to the cab companies, and wage disputes exist only between the drivers and the companies.

Chicago argues that how much a taxi driver makes does not depend solely on the city’s regulations, but on other factors such as the quality and type of car, tips, frequency of pick-ups, and driving efficiency. If Callahan is successful in her case and she is deemed an employee of the city, she may be ensured the hourly minimum wage and even paid retroactively for back wage payments. If the case reaches class-action statusit will potentially include any number of the other 13,000+ taxi drivers in Chicago, costing the city a substantial sum in back payments.

As for the general public, if Callahan is successful, there will most likely be an overall rise in meter prices. This last occurred in 2005 to large public backlash and since then, the city has been reluctant to even consider another increase. The suit is currently pending and in the hands of a federal judge, who will decide on two of Callahan’s five complaints. Because the case requires significant cost, Callahan and some of her fellow drivers, referring to themselves as the Cab Drivers for Justice, are fundraising throughout the city. The effort was given $5,000 from the American Federation of State, County, and Municipal Employees, one of the largest labor unions in the nation.

This litigation comes in the wake of the Uber lawsuit filed on behalf of Chicago cab companies. Uber is a smart phone app associated with a black-car company, which enables users to find Uber drivers in their area, send the driver to their location, and pay through the application. In addition to their own black cars, Uber set up relationships with many standard taxi drivers throughout the city. The Uber app tracks and summons these standard drivers as well, through it is not revealed what company those drivers are working for.

For drivers, the app has been very efficient – Uber adds 20% to all rides as a gratuity and deposits the amount directly into driver’s accounts. Needless to say, Chicago’s cab companies are decidedly less excited about the new service.

Wage and hour lawyers at Pintas & Mullins Law Firm are carefully tracking Callahan’s case. We understand the complexities and personal nature of such lawsuits, and our attorneys are available to evaluate possible overtime claims, free of charge.


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