The Fair Labor Standards Act exempts from its overtime requirements “employers engaged in the business of operating taxicabs.” The operative question then becomes whether the business meets this definition.
Many courts rely on the following U.S. Department of Labor “taxicab business” definition to answer this question:
The taxicab business consists normally of common carrier transportation in small motor vehicles of persons and such property as they may carry with them to any requested destination in the community. The business operates without fixed routes or contracts for recurrent transportation. It serves the miscellaneous and predominantly local transportation needs of the community. It may include such occasional and unscheduled trips to or from transportation terminals as the individual passengers may request, and may include stands at the transportation terminals as well as at other places where numerous demands for taxicab transportation may be expected.
This definition has several explicit and implicit factors courts look to when reaching its ultimate determination.
- Recurrent contracts. When there are significant recurrent contracts, courts are unlikely to find that a company is covered by the exemption. In one case, for example, the court held that the exemption did not apply because the company had “contract agreements with local hotels, corporate clients, and destination management companies.”
- Prearranged schedules. While the DOL’s definition does not mention prearranged schedules, many courts consider prearranged schedules as a factor against applying for the exemption. By comparison, no prearranged schedule exists when you hop in a cab and give the driver a destination.
- Fixed routes. The more often a driver is driving fixed routes, the less likely for the exemption to apply. This issue focuses on whether the routes are fixed in advance without reference to the convenience of a particular passenger, not whether the routes are prearranged between the customer and driver. This issue most often emerges with companies driving to or from the airport. The Eleventh Circuit examined this issue, finding the “Super Shuttle” company was not eligible for the exemption because, among other reasons, one end of the route was fixed: an airport. It the business operates without fixed routes, it is less likely to qualify for the exemption.
- While not part of the DOL definition, courts have considered how a company advertises itself. Companies that advertise as a limousine company are less likely to qualify for the exemption.
- While not part of the DOL definition, courts have considered whether the rates charged are closer to what limousine or taxicab companies charge.
Whether this exemption, like most exemptions, applies requires an overtime lawyer who specializes in this area. The overtime lawyers at Lipsky Lowe have that expertise. If you are a driver and believe you are entitled to overtime, contact the overtime lawyers at Lipsky Lowe.