Organizing Drive

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Pulling out of the Holland Tunnel into Manhattan, Gamal Salem holds forth on Greek myth. In the back seat of his peach Lincoln Town Car, two clerks from Merrill Lynch are complaining about their overbearing boss and the secretary who leaves too early each day.

Making a living by driving a “black car” is like a punishment meted out by the gods, Salem says, like being up past your chin in water and having to constantly push the rising tide away or drown. “This business has been stretched thin, so we have to work harder to keep up with our bills,” he says. “But when you are working 15 or 16 hours a day and you are not achieving your goals, then it seems like something is wrong. There is millions out there. Somebody is making that. We are not.”

As a driver for Brooklyn’s Ace Car and Limousine, Salem shuttles around executives from investment and law firms for 12 hours a day, six or seven days a week. He says he takes home about $20,000 a year. “We are like slaves,” Salem says. “That should be your headline: ‘Slaves in America.'”

Like Salem, most black-car drivers are immigrants from Pakistan or elsewhere in South Asia. Most, like him, feel overwhelmed by the job. But four years ago, drivers at one of the largest black-car firms in the city, Elite Limousine Plus, started trying to do something about it, organizing for better pay, health benefits and relief from excessive fines from the company for transgressions as trivial as not weaning a tie.

The drivers had little success at first, until their lawyer hooked them up with the International Association of Machinists and Aerospace Workers. Today, the 700,000-member TAM is running the biggest union drive in the city, according to labor experts, attempting to organize the city’s 12,000 black-car drivers. During the last few months, the drivers have won several big victories, including a successful unionizing campaign at Ace and a union contract at Elite, the first at a major New York City black-car company. It’s all the more impressive considering that the drivers are considered independent contractors by their employers.

In a time of shrinking union membership, the drivers’ successes have created a buzz among labor leaders in the city and around the nation. “These guys work alone, they are spread out, they are immigrants, and they work under extremely difficult conditions,” says Ed Ott, director of public policy for the New York City Central Labor Council. “If you had told me two years ago that they would be where they are now, I would have said, “No way”

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Usually, people come over here and they have no money,” says 42-year old Salem as he waits outside an office building in Jersey City for a pickup. “My story is the opposite of that. I came over with money, but now I am dying in debts. I owe about $20,000.”

To work for most black-car companies, drivers must purchase a “franchise”–basically, the right to drive for the company–which costs $12,000 at Ace but can go for as much as $35,000. And unlike with taxis, a car company owner can sell as many franchises as he wants. At one point, Salem says he held five Ace franchises but was losing money on them. He sold four at a great loss, keeping one for himself to support his wife and two kids, who currently live in Europe.

Despite the steep costs, many black-car drivers see it as a step up from taxi-driving. They get to wear suits, drive luxury cars and escape the dangers of picking up passengers off the street. There is also a fraternity among the drivers, They talk about family, work and homeland politics at fast-food joints and a handful of Pakistani restaurants or in their cars parked in out-of-the-way spots where they wait for jobs.

Corporations keep the black-car companies on account, so employees going home late can just call a dispatcher. The drivers get paid according to distance traveled, giving a portion to the company [see “Fare Share”]. They have little control over how much work he gets but doesn’t have to scramble for fares like a cabby.

As an independent contractor, however, a driver has no health insurance and is required to pay his own social security and workers’ compensation, in addition to the maintenance and insurance on the car. “The biggest problem is the [health] insurance thing’ says Mohamed Bedir, who has driven for Ace for 12 years. “I have four kids–ages 17, 9, 8 and 4–and I have to pay for them to go to the doctor.”

Last year, Ace drivers, having heard about other unionizing efforts, started working with TAM to organize their own shop. They immediately ran into resistance from Ace owner John Acierno, who owns at least seven black-car companies, making him, in the words of one union organizer, the “800-pound gorilla” of the industry. He argued that his drivers were not eligible to form a union because, as independent contractors, they own their cars, set their own schedules and can refuse jobs.

Acierno’s appeals were rejected by the National Labor Relations Board (NLRB), and the vote to unionize was ordered for early February. (Acierno, through his lawyer, declined to comment for this story.) When the Ace ballots were unsealed in April at a meeting at NLRB ‘s Brooklyn offices, a small crowd was on hand to watch. A palpable sigh went up when the tally was announced: 84 votes for the union, 30 against.

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The Ace vote was the fifth black-car election held by the machinists’ union since 1996. The count so far: three victories and two delays, where ballots have been impounded because of owner objections. The 400-plus union drivers even have a new local: Local Lodge 9, Limousine Drivers Union.

It’s a victory that few expected to come so quickly, especially since most drivers are new to the country. “Initially, the fact that many of these people were immigrants made them fearful,” says Kevin Lynch, the union’s gravel-voiced veteran organizing director. “They really don’t know the laws in this country, which means that it is easy to take advantage of them. Who else would pay $35,000 for a franchise, $25,000 for a car, $4,000 for car insurance to buy an opportunity to work 12 hours a day and make $20,000 to $25,000 a year?”

In the early days of the drive, Lynch and his lieutenants made a lot of late-night visits under the FDR Drive near 34th Street, at the airports, near the South Street Seaport: all the places where drivers park for cheap, away from the cops. “I could tell you every place in this city where a driver goes to catch a few minutes of sleep,” Lynch says. “The first year, we were out every night. For these guys, the ideal time for organizing is between 12 and 2 in the morning.”

The turning point was a 1997 decision by the NLRB that gave the Elite drivers status as employees. They had voted on joining the union at the close of 1996, but owner Shafquat Chaudhary–himself a Pakistani ex-cabby—had appealed, arguing that his drivers were independent contractors. The NLRB again disagreed, ruling that since the company exerted strict control over the drivers–even fining them for not wearing proper suits–they were employees with the legal right to unionize.

After a year of negotiations, Elite signed the first union drivers’ contract in the city on January 15. More than half of the 650 drivers at Elite have elected to join the union, getting benefits like health insurance, a life insurance plan and free legal representation in their never-ending battles with the Taxi and Limousine Commission.

“Instead of wasting money with the lawyers, I decided it could be spent on better wages,” Chaudhary says. “I always wanted to do something for the drivers. I thought that we can utilize this as a marketing tool: If I have good benefits, more drivers will come to me. It gives drivers peace of mind, and I am sure they will be better drivers now.”

The contract doesn’t have everything the union wanted. It lacks a pension plan and health coverage for family members, and Chaudhary refuses to pay social security or workers’ compensation for the drivers–the Internal Revenue Service still considers the drivers independent contractors, despite the NLRB ruling.

Union leaders grow rhapsodic over the Elite contract nonetheless. The president of the drivers’ local, Pakistani immigrant Syed Armughan, says he was fired from Elite for union organizing–but even he calls Chaudhry a “moral leader” for signing the contract.

And labor experts agree that the deal was remarkable. “Forty to fifty percent of the time a union wins an election, it doesn’t get a contract,” says Charles Craver, professor of labor and employment law at George Washington University. “The very fact that they got a contract is significant, particularly in a situation where the employers were anti-union [at first] and didn’t even want to sit down with them.”

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The unions are betting that organizing campaigns like this are the future. IAM has invested more than $500,000 in the driver campaign, and AFL-CIO President John Sweeney and other union bigwigs have met with the drivers on several occasions. “For as long as it takes–a week, a month or years–we are standing with you today, tomorrow and always,” pledged Richard Trumpka, secretary-treasurer of the AFL-CIO, at a rally for black-car drivers last summer.

Union insiders have watched the campaign with interest, aware of the difficulties inherent in organizing immigrants, organizing without a shop floor and–most of all–organizing independent contractors. More than eight million people filed tax returns as “independent contractors” in 1997. Many are treated by the IRS like high-powered consultants but are actually paid like low-level factory workers. Like the drivers, most do without basic employee perks. For example, the Bureau of Labor Statistics reports that only 3 percent of independent contractors nationwide received employer-provided health insurance in 1997, compared to 61 percent for traditional employees.

“The classification–or misclassification–of workers as independent contractors has become a particularly large problem,” says Paul F. Cole, secretary-treasurer of the New York State AFL-CIO. “In some industries, like construction or entertainment, there has been pretty egregious misclassification by employers because they can save money by not paying social security or workers’ compensation or any other benefits.”

“I don’t think anyone realizes how much this scam is blossoming across the country,” adds John Turchiano, spokesperson for Hotel and Restaurant Employees, Local 6. That local is currently fighting the owners of the Rainbow Room, claiming that the restaurant’s owners are trying to reclassify its entire waitstaff as independent contractors.

With only a few exceptions, though, unions haven’t tackled independent contractor shops. The black-car campaign is the machinists’ first, and there are only a few similar drives nationwide–like a home health care workers unionizing effort in California and truck drivers in Washington State. Meanwhile, the AFL-CIO is also lobbying hard to pass an independent contractors bill in Congress. Introduced in late April, the bill would drastically alter how the federal government evaluates “independent contractor” status, simplifying the rules and making it harder to use the classification.

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For the drivers in New York, the union hasn’t solved all their problems. TAM officials cite incidents of pro-union drivers being harassed or receiving unwarranted fines from their companies. Other company owners appear to have dug in their heels, ready to fight: Last Radio Group, whose drivers unionized last year, recently appealed an order to negotiate. And if Elite starts losing money, other companies will undoubtedly use that as an excuse not to negotiate. George Washington University’s Craver says he thinks the union will win more contracts, “but if this contract adversely affects the company’s ability to do business, then it will come back to haunt them.”

Union leaders are hoping to avoid that pothole by pressuring large investment firms and businesses to use unionized black-car companies. As part of the Elite deal, the union will encourage law firms it does business with to patronize Elite. They have already attracted some business this way.

It’s not easy, however, to demand concessions from titans like Merrill Lynch and Goldman Sachs. The Wall Street behemoths pay much more than the tab for a simple cab ride and use hundreds of cars a day. Their biggest concern is getting people home with no delay, a responsibility that can overwhelm some of the smaller companies that have unionized.

Getting behemoth Ace to agree on a contract for its union drivers is also no sealed deal. But even if Ace doesn’t come around, plenty of other black-car companies are dropping their resistance to negotiating with the growing union. “We’ve already won the campaign,” Lynch says. “The momentum is on our side. The opposition is crumbling. Employers are calling us up. They want to talk.”

Matthew Strozier is a staff reporter for India in New York.