For years now the for-hire driver insurance system has been heading towards a cliff, one that could jeopardize the jobs of tens of thousands of drivers like me. But there are ways to help, including a New York City Council bill – introduced by Council Member Carmen De La Rosa – that would move the TLC’s insurance law in a positive direction, eliminating both unnecessary and overburdensome insurance minimums, and making fraud claims less attractive to predatory lawyers.
It’s no secret that insurance costs have exploded in recent years. Basic protections like home and auto insurance are increasingly out of reach. There are a number of reasons for this. As materials become more expensive, the cost of replacing them or repairing them does as well. Rising healthcare costs means higher labor costs. Extreme weather events are becoming more common, increasing the likelihood of catastrophic losses.
Those same forces are impacting the cost of insurance for for-hire drivers as well. But there are some extra factors that are unique to the industry that make the situation even more difficult. Sixty three percent of NYC’s for-hire drivers (taxi and rideshare drivers) – including me – rely on the American Transit Insurance Company (ATIC) for our mandated coverage. And now the company is struggling financially.
Suffering from financial issues and vulnerable to insurance fraud and other issues, ATIC now owes an estimated $760 million in unpaid claims to New Yorkers. And while New York is likely to cover these claims through the state’s insurance security funds, it could not afford to fully cover ATIC’s shortfalls.
This would leave the state with unappealing options such as forcing for-hire drivers out of work or asking New York taxpayers to foot the bill. For drivers – many of whom invested what little we have in our cars and expensive Taxi & Limousine Commission (TLC) licenses – the prospect of losing our right to work would be devastating. And as a taxpayer, I know New Yorkers should not be forced to fund a private company’s failures.
Part of the solution is the City Council bill introduced by Council Member De La Rosa.
Currently, NYC drivers are required to maintain $200,000 in personal injury protection (PIP) policies – far more than what New York State requires – making drivers and insurers like ATIC vulnerable to fraudulent claims. And due to an uncompetitive insurance market, drivers are, on average, personally paying between $4,000 and $5,500 per year in premiums that eat into their earnings. And not only are drivers and fleet operators affected, New York consumers pay more for their rides when premiums are high, when fraudulent claims go unchecked, and when insurance requirements are excessive.
This bill would reduce NYC’s mandated insurance minimum and put it in-line with the state’s $50,000 requirement, and could save drivers like me between $400-$600 each year, while also reducing potential fraudulent claims and making the market more attractive to stable insurance companies. The current rules just don’t add up.
First, for-hire drivers across the rest of New York State and in other U.S. cities operate with a $50,000 insurance mandate without issue. Second, ride-share drivers in NYC are shown to be among the city’s safest. And third, NYC for-hire drivers are already eligible for protections that make a $200,000 mandate redundant, including workers’ compensation for yellow cab drivers and medical coverage and wage replacement from the Black Car Fund. Plus, if individual drivers wanted to buy further coverage, they still could.
The TLC’s insurance mandates were meant to help and protect drivers like me, not force us into buying insurance we don’t want or need.
Many of us come from underserved and overlooked neighborhoods. Others are immigrants with few job prospects. For some of us, driving is our only source of income, one we have invested heavily in and staked our futures on. But growing premiums cut into our margins and complicate our finances. Now, drivers like me are counting on the NY City Council’s leaders to champion this bill and help solve this crisis before we fall off the cliff.
Carol Ramnarine has been a for-hire driver in New York City for over six years.
