In tougher market, taxi drivers sue Chicago cab companies

Cabbies claim they're owed millions in back pay and benefits.

March 26, 2014

WBEZ/Odette Yousef
Gregory McGee is one of five cab drivers suing Chicago cab companies. He says under Illinois labor law, they’ve been incorrectly classified as “independent contractors” instead of “employees.”

Chicago cab drivers today added to the frenzy of litigation that has recently besieged the for-hire transportation industry, filing a federal lawsuit against the city’s four largest cab companies. They’ve enlisted the help of a Boston labor attorney who has had success in arguing that taxi drivers are inappropriately classified as “independent contractors,” rather than “employees” of cab companies. The Chicago drivers seek class-action status, and significant back pay.

“You know, I had a guy pull a gun on me the other day,” recounted Karen Chamberlain, a longtime Chicago taxi driver and a plaintiff in the case, “and I looked at him, I’m going, ‘you better shoot me, because I’m not in the mood.’ And he got out.”

Chamberlain laughs at the incident now, but says it’s harder to find the comic relief these days in a job that’s always had its share of ups and downs.

“I used to work 4-5 days a week, 8-10 hours a day. Now, to make the same amount of money – and I’m not even making as much – I’m working 7 days a week,” she said. “I take three days off a year now. And I’m not making the same amount of money. And I’m working 10-12 hours a day.”

Amid higher gas prices and a lingering recession, Chamberlain says business has been a struggle. Drivers have not seen an increase in taxi meter rates in eight years, and Chicago voters last week rejected a referendum on the primary ballot to raise fares. But Chamberlain says the city did the most harm when it allowed cab companies to raise lease rates on their vehicles two years ago.

“In 2006 I was paying $450 a week for my taxi. Right now I am paying $752 a week for my cab,” Chamberlain said. She also blames newly popular “ride sharing” companies, such as uberX, Lyft and Sidecar, for taking business away from taxis. The companies make smartphone apps that help regular people use their cars for hire.

“I’m sitting there waiting for a fare and some guy with a pink mustache drives up and takes a fare,” she said, referring to the fuzzy emblem that Lyft drivers mount on the front of their cars.

“You see cab drivers out there,” said Shannon Liss-Riordan, the Boston-based attorney who represents Chamberlain and the other plaintiffs in the lawsuit. “They’re working around the clock, long, long, long hours for very, very, very little pay. And this system of the drivers being classified as independent contractors really contributes (to the problem).”

Liss-Riordan is fighting a similar case on behalf of Boston taxi drivers, and has had some initial success. Last year she got a judge to freeze the assets of Boston’s largest taxi fleet owner. The case isn’t over yet, but the court said there’s a “reasonable likelihood” that cab drivers were misclassified.

She says labor laws in Illinois are similar to those in Massachusetts, which is why she believes her plaintiffs here will have a chance. In the Chicago lawsuit, Liss-Riordan expects the question to come down to whether the cab companies can prove that taxi drivers perform their service outside the companies’ usual place of business.

“The case law in the driving context establishes that the place of business, if you’re a driver, is out on the road,” said Liss-Riordan. She does not believe that cab companies will be able to prove that cab drivers perform their work anywhere else. The cab companies named in the lawsuit were not prepared to speak with WBEZ on Wednesday.

The outcome of the lawsuit is likely many years off, but if the drivers prevail, it could have significant repercussions throughout Chicago’s taxi industry. For starters, cab companies would be required to pay back wages for thousands of cab drivers, dating back to ten years, if it’s found that drivers earned less than the hourly minimum wage.

“Tens or even hundreds of millions of dollars are at stake,” said attorney James Zouras, who is working with Liss-Riordan to represent the drivers. It would also mean that cab drivers would be entitled to overtime pay, among other benefits. Zouras said if a court rules that cab drivers are “employees,” it would also allow them to unionize.

Gregory McGee, another plaintiff in the case, has tried to organize Chicago cab drivers for nearly twelve years, with little success. He said a win in the courts could finally give many the confidence to unite. Still, he said he laments the extent to which conditions in the industry have already deteriorated.

“I am now 54 years old, I have no savings, and I have had no days off for practical purposes,” he said. “As a matter of fact, I probably have no more than 30 full calendar days off, where I did nothing cab-related, in the almost twelve years now.”

The lawsuit now becomes the second in federal court, where Chicago cab drivers assert that they’ve been misclassified. The other, brought by taxi driver Melissa Callahan, seeks to show that cab drivers should properly be classified as employees of the City of Chicago. Liss-Riordan said she is not concerned about having these two suits progressing simultaneously.

“It’s possible for employees to have multiple employers,” she said, “So they’re not mutually exclusive.”

McGee said if anything, the two suits bolster taxi drivers’ argument that the industry needs to be restructured. “That’s how serious the situation is here, folks, that we have not just one class action (lawsuit) in the Northern District Federal Court here in the Seventh Circuit,” he said, “we have two now, as of today.”

Odette Yousef is WBEZ’s North Side Bureau reporter. Follow her @oyousef and @WBEZoutloud.