Workers’ Comp Fund For Drivers Used For Lobbyist, Political Contributions

Liz Carey

New York, NY (WorkersCompensation.com) – A fund set up to pay for injuries to for-hire drivers is being used to pay for board meetings, entertainment, political contributions and lobbyists, a report out Monday showed.

According to Crain’s New York Business, the Black Car Fund, a fund set up to pay for medical bills and lost wages for driver, was supposed to protect workers. But now, the report says, the fund is being used to make political contributions, to pay for attorneys and lobbyists, to pay for entertaining elected officials and to purchase a building that hasn’t been used in years.

The Black Car Fund is paid for by fees tacked on to every “black car” or independent contractor who chauffeur people around New York. Passed in 1999, the intent of the fund was to protect those independent contractors and make the Black Car Fund the legal employer of taxi drivers who drove for the black car base.

Since 2013, a 2.5 percent surcharge has been added to every fare – including those for Uber, Lyft and other ride sharing services. The fund takes in around $100 million annually. As part of this fund, driver injuries were covered, to the tune of $65.4 million in 2017, up from $12.3 million in 2012. Additionally, the fund added safety training classes for its drivers, at a cost of $1.7 million, and a $50,000 death benefit for drivers. Last year, it also modified its operating plan and added vision insurance and a telemedicine program, according to the organization’s web site.

But the Crain’s report said the money has been used to protect the fund’s interests as well. In 2017, the fund spent $4 million on payroll and fringe benefits, up from $2.3 million in 2012. Payments for other expenditures increased as well, office expenses doubled to $363,251; board meeting expenses tripled to $52,441; and meals and entertainment expenses double from $22,918 to $49,404.

The fund also paid into some of its political supporters’ campaigns. New York’s Board of Election records show that the fund paid $5,000 to the Kings County Democratic Party in April 2013, as well as to other Brooklyn and Staten Island Democratic organizations. Between 2014 and 2018, the fund gave just under $40,000 in campaign contributions, the report said.

The Fund also created an LLC that has contributed more than $70,000 to candidates, the report said, as well as $1.5 million in renovations and construction on a building the fund purchased for $8 million that currently sits vacant and untouched.

Steve Shanker, counsel for the Independent Livery Driver Benefit Fund that provides workers’ compensation to drivers in Upper Manhattand and the outer boroughs, said the statute that created the Independent Livery Driver Fund – nearly identical to the Black Car Fund – would not allow such expenditures.

“I do not believe that either the livery fund law or the black-car law provide for the ability of the fund or the discretion of the board of directors to make contributions to politicians, because I do not see how that could be necessary for the execution of the power and duties of the fund,” Shanker was quoted as saying to Crain’s. “I do believe lobbying could be necessary. … But it depends what you’re lobbying for.”

In a statement, Ira Goldstein, the fund’s executive director, said the donations and lobbying were legal.

“It is the responsibility of the Black Car Fund to serve New York’s for-hire drivers and their families, and to ensure they receive the benefits and protections that keep them and our roads safe,” he said.

Representatives from Uber and Lyft did not return requests for comment.

The fund continues to work for drivers, the company said, including fighting effort to cap for-hire-vehicle licenses and opposing a “congestion fee” on Manhattan rides. Additionally, it testified against a New York City Council bill that would establish a health care and disability insurance program for all taxi and for-hire vehicle operators. However, the organization continues to work on a bill that would expand its power and revenue – a bill in the N.Y. Senate that would add a 10 percent fee on all rides in the Black Car Fund’s jurisdiction so it could provide “health, vision, dental, life, paid-leave, retirement and financial services” to its drivers.

Goldstein has said he sees the Black Car Fund as a solution to benefits in a gig economy future.

“I think in that way it was so revolutionary and ahead of its time, really,” Goldstein said in an interview on National Public Radio last year. “It’s now a national issue, and it’s a national problem that people are trying to find a resolution to.”

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