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Yellow Puts Deposit on Hold After Hearing from MTA

Yellow suspended its previously announced one-week gate deposit (notice above) after receiving a letter from MTA Taxi Director Christiane Hayashi (top).

For the third year in a row, Yellow Cab has tried to put in place a deposit on gate payments. And for the third straight time, the company, under pressure, has backed off its plan.

The latest Yellow scheme, which it calls a “prepayment”, was supposed to go into effect on Oct. 1. The company posted two notices informing drivers of the plan, but they were unsigned and so ambiguously worded that many drivers who lease by the shift did not think it applied to them. Unfortunately, it did.

The scheme appeared to violate a permanent court injunction in the case of Tracy v. Yellow Cab, prohibiting Yellow and Luxor from holding deposits illegally. Upon learning of the plan, UTW contacted MTA Taxi Director Christiane Hayashi and asked the agency to step in.

On Sept. 28 — two days before the deposit was to go into effect — Director Hayashi wrote Yellow, asking the company to “refrain from collecting advance gate fees from drivers pursuant to your new policy until it can be established that the practice does not violate the
injunction in effect.”

In response, Yellow “temporarily” suspended the plan. It has not tried to put it into effect since then. Although Yellow’s most recent scheme calls for a one-week deposit, the company’s two previous plans would have required drivers to post a month’s worth of gates up front.

UTW actively opposed those plans as well. In 2008, the Board of Supervisors unanimously passed a resolution at UTW’s request, urging Yellow not to go forward and urging the Taxi Commission to adopt a rule against deposits or pre-payments.

Under the Tracy decision, Yellow and Luxor are barred from collecting deposits unlawfully. They are also prohibited from opposing drivers’ claims for workers compensation or unemployment benefits on the grounds that drivers are independent contractors.

Word in the industry has it that Luxor Cab is under the gun from the state Employment Development Department (EDD) on the issue of unemployment benefits. Yellow apparently hopes that the gate deposits will help convince the EDD that its drivers are not eligible for those benefits. Should they succeed, drivers’ workers comp benefits would also be in jeopardy.

If Yellow decides to go forward with its plan, UTW will fight it by all available means.

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