Opinion ID: 427313
Heading Depth: 2
Heading Rank: 1

Heading: The Operation of the Leasing Program

Text: 5 Drivers seeking leases from Suburban submit an application with references and a resume describing their driving experience. Those who are accepted sign a lease agreement and post a $100 to $250 bond, depending on the lessee's driving record. 5 Lessees are also required by the Airport, Bloomington and Richfield to pass a physical examination and to be licensed as cab drivers. 6
6 Suburban offers a wide variety of leases to applicant drivers. Drivers may contract for different periods ranging from eight hours, 24 hours, a weekend, or an entire week. Drivers may also extend their leases for extra hours. One newsletter to drivers described the range of available leases as follows: 7 We now have lease rates available to suit everyone's needs: 8 Day Lease from 6:00 a.m.-6:00 p.m. Short a.m. I Lease 6:00 a.m.-12:00 noon 9 Short a.m. [p.m.] II Lease 12:00 noon-6:00 p.m. Dog Lease 12:00 mid-12:00 noon Dog Lease 12:00 noon-12:00 mid 10 Extra Hours 3.00 hr. 11 And our new Single Shift Lease 6:00 a.m. to 6:00 p.m. 24 hrs. 12 Did you know that you can lease a fully equipped new Yellow Taxi with radio for $202.00 for the entire week? Why bother owning that second car, paying the insurance and maintenance on it, when you could be driving a fully insured, fully maintained Yellow for $202.00 a week? 13 Newsletter from J. Feldman, Suburban (undated) (JA 215). 14 Rates vary according to season and time of day. One announcement to drivers stated: The rates for fall are as follows: 15 Single shift $35.00 per day, $202 per week Days 25.00 per day Nights 20.00 per night Weekend Special 50.00 Saturday & Sunday 16 Remember, the more days you lease the smaller your rate is. 17 Letter from Minneapolis-Yellow to Lessees at 2 (Oct. 3, 1977) (JA 210). 18 A wider selection of leases can scarcely be imagined. The available rental periods vary greatly. Extra hours may be added. Suburban is not obligated to renew or extend the term of the lease. Lessees are not required to account for the amount of fares collected, Tr. 132 (J.A. 227), or to accept any calls other than those the lessee may agree to accept. Tr. 34 (JA 95). Drivers are not restricted to any particular area, required to stand at any specified place, or assigned any particular lease periods. 19 In return for the leasing fee, which is paid when the lease agreement is signed, the lessee receives a fully equipped, licensed cab furnished with a meter and radio dispatch equipment (and the right to use the radio dispatch service), liability insurance, tires, anti-freeze, free towing service within 50 miles of Suburban's garage, and repair service for all damages determined not to be the driver's fault and for all damages in excess of the driver's posted bond. 7 The cabs bear the logo Suburban Yellow Taxi, and the driver obtains the right to use Suburban's name and good will. He may not change the trade name. Article 7 of the lease agreement provides: 20 The relationship of employer-employee or principal-agent does not exist and is not intended to exist by either party to this lease. Instead, only a lease exists. Specifically: 21 a. Lessee's compensation is not guaranteed. All income derived from the use of the Taxicab by Lessee is the sole property of Lessee. 22 b. Lessee is at all times free from right of control and direction of Lessor in the operation of the Taxicab, or while the same is in Lessee's possession, and Lessor shall not exercise or attempt to exercise any supervision over the service performed by Lessee. Any rates of fare suggested by Lessor which are not regulated by law, ordinance or governmental rules or regulations are merely for the information of Lessee and Lessee is not obligated to charge such rates. [The municipalities regulate taxi cab rates]. 23 c. Subject to compliance with [the law and existing regulations], Lessee shall not be required by Lessor to operate the Taxicab in any prescribed manner or accept any calls other than those which Lessee may of Lessee's volition agree to accept. 24 d. Lessee shall not be required to report the location or whereabouts of the Taxicab at any time during the lease period. 25 e. Lessee shall not be required to account to Lessor in writing or otherwise for any amounts collected from passengers. Lessee shall not be required to furnish Lessor any trip sheet or other record of Lessee's activities unless required by applicable law, ordinance or governmental rules or regulation, except for information relating to accidents or relating to the defense of any claims or suits against Lessor. 26 f. Subject to compliance with the provisions of [applicable law], Lessee shall not be restricted in any manner as to the area in which Lessee may operate the Taxicab. 27 g. Lessee shall not be required to have the Taxicab remain in any specified place or operated for any minimum number of hours during the lease term. 28 This agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and may not be modified except in writing signed by Lessee and an Officer of Lessor. 29 Sample Lease, supra note 5, at 1 (JA 197). In addition, lessees may use the cab for pleasure and for personal business. See Tr. 186, 285 (JA 124, 147); Sample Lease, supra note 5, p 7b (JA 197).
30 Suburban is licensed in six municipal jurisdictions: The Airport, Bloomington, Richfield, Edina, Eden Prairie and Burnsville. Lessees are free to prospect for fares independently, Brief for Respondent at 9, but the vast majority of their business is obtained by radio communication from the radio facility of parent Minneapolis Yellow in downtown Minneapolis. The radio facility communicates with both Suburban's lessees and Minneapolis Yellow's commissioned drivers. Unlike commissioned drivers, a lessee may refuse runs offered over the radio, Tr. 34, 285 (JA 95, 147), but once he accepts a run he must complete it. ALJ Decision, supra note 1, at 25 (JA 38). Lessees are encouraged to keep their radios on at all times, but they are not required to do so. Tr. 186, 215, 246 (JA 124, 130, 141). Two drivers testified that they obtained 70 to 80 percent of their business from radio calls. Tr. 184, 238 (JA 122, 140). 31 The Airport is located immediately adjacent to or close by the suburban municipalities in the area where Suburban's cabs operate, and undoubtedly it is the source of a substantial proportion of Suburban's business. The Airport has a detailed regulatory Ordinance requiring the licensing of cabs and prescribing strict procedures for the operation of taxis at the Airport terminal. 8 The Ordinance regulates parking, traffic flow, and the loading of passengers and baggage by all vehicles used for public conveyance within the Airport. Airport Ordinance, supra note 8, p 11.2 (JA 249-50). An Airport starter is designated by the Metropolitan Airports Commission to call up taxi cabs from the taxi stand to any point which is designated for the purpose of picking up passengers or baggage. 9 The starter is an employee of the Airport--not Suburban. 10 Under the Ordinance, the Airport starter exercises general supervision over the taxi stand area and over the pick-up and discharge of passengers and baggage at the Airport. Id. paragraphs 11.2-11.4 (JA 249-55). The Ordinance provides that drivers may move out of line to pick up passengers in response to specific calls or for business for which Suburban has contracted for with other companies. Id. p 11(a), (b), (d) (JA 250). 32 Suburban has contracted with between 25 and 30 local corporations to furnish transportation, usually for packages, at flat rates which are agreed upon between the parties. See, e.g., Control Data Corporation (bulletin) (JA 207) (listing agreed fees for runs for Control Data Corporation). For runs not on the agreed fare list, meter fees are charged on a most-direct-route basis, as one might expect. Cabs are not authorized to operate otherwise. A number of airlines also have contracted with Suburban for transportation of baggage (usually delayed baggage of airline customers) from the Airport. Drivers are not obligated to accept such baggage runs when proffered and may refuse them. 11 If a driver accepts a business run, however, he is bound by the agreed fee (or the meter rate) and, upon pain of losing the opportunity to make such runs, he may not do business individually with such contract customers. Overcharges by drivers on such runs are determined by Suburban, which then exacts restitution from the driver and reimburses the customer. If a driver refuses to make restitution Suburban may refuse renewal of his lease. The same procedure is followed when lessees fail to deliver packages, lose them, or deliver them to an incorrect address. See ALJ Decision, supra note 1, at 23 (JA 36). Runs made pursuant to flat-rate and airline baggage contracts constitute only about five percent of the drivers' total business. Tr. 430-31 (JA 170).
33 Trip sheets or log sheets are forms on which cab drivers record their activities, showing the date, cab number, lessee number, number of passengers, the origin and destination of each trip, and the time the trip begins and ends. Brief for Respondent at 12-13; see General Counsel's Exhibit No. 12 (JA 208) (sample trip sheet). Regarding trip sheets, the lease provides as follows: 34 Lessee shall not be required to account to Lessor in writing or otherwise for any amounts collected from passengers. Lessee shall not be required to furnish Lessor any trip sheet or other record of Lessee's activities unless required by applicable law, Ordinance or governmental rule or regulation .... 35 Sample Lease, supra note 5, p 7e (JA 197) (emphasis added). Testimony indicates that the Airport and the municipalities of Bloomington and Richfield require drivers to keep trip sheets, to file them as part of the driver's record, and to open them to inspection by police officers. 12 Suburban's trip sheets do not require drivers to report fares. See General Counsel's Exhibit No. 12 (JA 208) (sample trip sheet). 13
36 The Board recognizes that lessees are generally free from direct supervision while they are on duty, but asserts that supervisors of parent Minneapolis Yellow, whose duties are chiefly directed at Yellow's commissioned drivers, occasionally make spot checks to ensure that a Suburban cab is not being subleased. Brief for Respondent at 13. Supervisors also may report incidents of speeding to Suburban. Id.; Supplemental Decision and Order of the NLRB, 262 NLRB No. 89, at 7 (1982) (JA 64). Suburban also has issued bulletins suggesting courtesy to passengers, 14 prescribing the manner of handling accidents, 15 and stressing the importance of being prompt. 16 Drivers may be offered flower runs, and if a run is assigned, they are told not to dispute or refuse it. 17 Drivers are also warned against falsifying their locations when reporting their positions; 18 not to congregate at certain locations, as this might cause the withdrawal of authority to use the cab stand; 19 not to leave their cabs unattended if parked at a cab stand; 20 and to keep down mileage. 21 Other bulletins describe how to collect for certain package runs, 22 remind drivers that airline baggage runs are to be run on the meter over the shortest possible route, 23 and suggest that watching mileage instead of the gasoline gauge might be a better way to avoid running out of gasoline. 24
37 Suburban may deny leases to drivers for a variety of legally based reasons, including driving while intoxicated and violating radio regulations of the Federal Communications Commission. Leases may also be terminated for driver dishonesty, refusal to reimburse overcharges, nondelivery of goods, sleeping at cab stands, falsifying cab location, making independent arrangements with contract customers, and for conduct detrimental to Suburban's good will and trade name, including customer complaints.