March/April 1996, p.12-13

Uneasy Riders
Technology and Economics Run Messengers Off the Road

By Brendan Mernin

Like corned beef on rye or the lights of Times Square, the bicycle messenger is one of New York's most recognizable cultural icons. He-or she-races through the streets in any weather, at obvious risk to life and limb, all to deliver a package safely and on time. To some, the messenger stands as a latter-day frontiersman, the best of New York on two wheels: fast, healthy, independent, industrious, and free. To others, however, the bike messenger calls to mind a different set of adjectives: reckless, intimidating, irresponsible, and menacing.

Without a doubt, the messenger gig does not attract the same people who flocked to it a decade ago. Now the government takes taxes out of messengers' pay and, because an intensely competitive market has kept delivery rates steady, take-home pay has declined severely for those who ride for a living. A competent messenger at a busy firm can take home about $300 a week, but not all messengers make even that much money. Some of them are only one or two steps from homelessness. "The good people leave because it's dangerous and the pay isn't steady," says rider Eric Sabo.

There is no question that messengers work is not what it used to be. Gone arc the heady days of the mid-1980's when legions of athletic independent contractors roamed the streets for $600 a week in cash, and owners raked in profits with hardly a thought of cutting costs. These days, the business is subject to the same economic forces pulling on industries throughout the region and the nation, Companies are consolidating and laying off workers, owners are trying to squeeze profits out of a vulnerable work force, and insurers are raising rates to keep their revenues rolling in. Meanwhile, an effort to organize one of New York's most transient and powerless work forces has foundered after some early success, and no one is really sure whether a union would make matters better or worse. It all adds up to an industry in flux.

In the late 1980's, the advent of the fax machine and the growth of overnight delivery services cut the market for bike couriers almost in half. Since then, the industry has been consolidating, as larger companies buy out smaller ones or several firms join forces to keep up. But Robert Kotch, head of Breakaway Couriers, a mid-sized messenger company, does not see an inexorable tend. He says, "I'm not quaking in my shoes. PeopIe are looking for quality, and the big companies can't always provide it."

Kotch believes that the biggest threat to the messenger business is not consolidation or competition, but rather the skyrocketing cost of insurance, especially to cover Worker's Compensation claims. When a messenger is hurt on the job, Worker's Comp will pay for his hospital bills and lost time, "My premiums have gone from $2,000 to $100,000 in three years," says Kotch.

Virtually all bike courier companies must purchase Worker's Comp coverage from the State Insurance Fund, a quasi-public agency that underwrites employers deemed too risky by private insurers. The State Fund charges an employer a percentage of payroll, based on the number of claims made by employees in the past four years. Bike messengers were once insured at the same cost as foot messengers, who cost about 1 percent of payroll to insure. Bikers now cost at least 6 percent, not including surcharges. For a large employer with a lot of claims, payments could reach a million dollars a year.

Despite the owners' claims of poverty, many messengers and observers believe that the business remains lucrative largely because the owners exploit their workers. "First, they don't pay overtime," says Leon Greenberg, a private attorney who often represents messengers in pay disputes. "Second, double billing is rampant.

That is the company bills the customer, say, $15 for the delivery, but tells the messenger that it only charged $10. That cuts into the messenger's commission. That's outright fraud, and the owners are very good at it." Eric Sabo, who has ridden for ten companies in his three years as a messenger, says that "One company even had two sets of books. They would sometimes even refuse to pay their messengers, then laugh when they quit. They just hire new guys the next week."

Clearly, the economics of the 1990's have put a strain on both bike messengers and their bosses. Into this breach stepped the Teamsters Union. In 1994, Local 840 tried unsuccessfully to organize the 150 messengers at Orbit/Lightspeed, then a mid-size courier firm. When the union lost by three votes, organizers claimed that owner Robert Wyatt had intimidated his employees. "He fired three union leaders, threatened the immigrants with deportation if they joined the union, and told the parolees that they would go to jail if they went on strike" says union organizer Bernadette McCulloch. "On the election day, he was on the sidewalk telling people to vote no. It was all illegal."

Wyatt feels that the riders voted down the union because he treats his people well. "Besides," says Kotch, "they don't want to be part of any institution. And they don't want to admit it's a career. While owners and 0rganizers debate over the reason Orbit riders failed to support a union Wyatt's company has phased out bikers in favor of walkers. Only ten riders remain of the 150 who plied the streets only two years ago. "My service is not as good,' says Wyatt. "But now I save couple of hundred thousand dollars a year."

No one really knows whether Wyatt rid his company of bikers to save money or, as organizers contend, ill response to the threat of the union. And no one knows whether a union would give messengers the safety and security many want, or would simply price the union shops out of business. What does seem certain, however, is the long-term decline of the cycle messenger in favor of walkers, faxes, overnight services, and vans." I see fewer and fewer bike messengers, says Charlie McCorkle, who owns a downtown bike shop. "I especially see fewer young messengers."