Chris Hayashi at the CPUC

Director of Taxi Services Christiane Hayashi (photo) gave two powerful speeches at the recent CPUC hearing on Order Instituting Rulemaking on Regulations Relating to Passenger Carriers, Ridesharing, and New Online-Enabled Transportation Services.

Hayashi illuminated issues obscured by the rhetoric of both the so-called NOETS and the CPUC spokespersons. She also explained the negative consequences for the public of legalizing these bogus taxicab services.


The first talk begins with a comment on sharing the podium with Uber. The joke is that Uber had held court for over forty minutes before Director Hayashi was given the opportunity to speak. And, of course, Uber and Hayashi don't like each other very much.

The second talk is brilliant and impassioned. It's ending also points out the varying levels of respect given by the CPUC to the spokenperson for the City of San Francisco and the one for Uber.

A CPUC "facilitator" rudely shut down Director Hayashi before she had a chance to finish by claiming that Illya Abyzov, a manager for Uber, had only been given two minutes to talk before his Q & A. Actually Uber attorney Ed O'Neil's introduction of Mr. Abyzov took two minutes by itself and, as I mentioned before, the entire performance took up over forty minutes with Illya neither saying much nor answering any question he didn't like. The kicker is that Illya Abyzov is not listed as a "Party" to the Rulemaking. That is to say - he should not have been allowed to speak at all.

You might also have noticed that Hayashi was cut off precisely when she was about to give the "specific" ideas for change that the "facilitator" claimed to be asking for.

The SFMTA'S Comments on the CPUC's Rulemaking on Ridesharing

No, I 'm not on the MTA payroll. I've earned my gold star for SFMTA bashing by writing twenty some posts criticizing them for trying to cure San Francisco's shortfall by taxing cab drivers and killing the waiting list.

But that fight is now in the past and possibly in the future. At the moment we're both lined up against the same adversary - illegal app mongers out to destroy the taxi business.

That's right! Contrary to urban myth, the SFMTA is as strongly against the illegal encroachments of Uber, Lyft and Sidecar as anybody. 

The government officials actually responsible for keeping attack dogs off the techie, snake-oil, sales-persons are the California Public Utilities Commission (CPUC), Mayor Ed Lee and pro-corporate, anti-environment Supervisor Scott Weiner.

The SFMTA has actually gone beyond mere opposition to help organize and lead the fight. Director Christiane Hayashi, for example, has been instrumental in showing Barry Korengold of the San Francisco Cab Drivers Association and myself how to jump thorough the CPUC's hoops so that we could become part of their rulemaking process.

The below comments were put together by the Taxi Services staff with the final version being written by City Attorney Mariam Morely. The paper was okayed and signed by Director of Transportation Edward D. Reiskin. 

It's an excellent, well-thought out and thorough presentation that I thought I'd share with you. 

I. Introduction

As the SFMTA stated in its Initial Comments, the use of electronic hailing applications to deliver transportation for hire services does not change the underlying nature of the services.   Electronic hailing can and is being widely used to support delivery of both state-regulated charter-party service and locally-regulated taxi service.  It is also being used to support completely unregulated service.  With or without electronic hailing, transportation for hire services like those offered by Uber, Lyft and Sidecar must be regulated to protect the public health and safety and to meet many other critical public policy goals served by local taxi regulation. 

Services like Uber, Lyft and SideCar meet the statutory definition of charter-party service; however, as we review the record, we note that electronic hailing applications have effectively dissolved the previously coherent regulatory distinction between charter-party service and taxi service.  While meeting the statutory definition of charter-party service, Uber, Lyft and Sidecar offer services that can equally  be characterized as taxi service.  The solution to this regulatory problem is not double regulation; nor can it be the solution suggested by the CPUC's recent interim settlements with Uber and Zimride -- a weakened halfway form of charter-party regulation.  Existing California law provides two distinct frameworks for regulating transportation for hire.  The regulatory problem triggered by electronic hailing will not be solved by  "charter-party lite" or "local taxi lite" regulation.    Because transportation for hire services are critical to maintaining environmentally sustainable and economically vibrant urban areas, we urge the CPUC to work closely with local taxi regulators to develop a regulatory scheme that that ensures the availability of safe, reliable, affordable, environmentally-sustainable and nondiscriminatory transportation options for all segments of the market.  

The transportation for hire market in California cities can sustain two classes of service -- both of which can be supported and improved by the magnificent opportunity reflected in electronic hailing innovations.  As public servants, we must deliver a solution to the regulatory problem we face that does not abandon the critical goals that have historically been served by regulation of transportation for hire.  Our solution must ensure that unregulated services do not drive regulated providers out of business and, in so doing, undermine our state and local goals for reducing greenhouse gas emissions and ensuring access to safe and reliable transportation for all California residents -- including seniors and people with disabilities.  While born of innovation and opportunity, this challenge is formidable.   We can meet it effectively only by working together.

(To read further Click below.)

The Hara Study: Hotels & ATT

"The correct perception of a matter and the total misunderstanding of the same matter do not necessarily preclude each other."    Franz Kafka

I find myself using the above quote far too often lately - usually in reference to brain-dead "investigative reporters." It gives me no pleasure to find Kafka's satirical wisdom also appropriate to parts of the Hara report.

I was one of the drivers that Dr. Hara interviewed. I found him to be personable, likable, intelligent, serious and apparently open-minded. He asked good questions. However, it's the questions that he didn't ask that now bother me. Dr. Hara didn't ask me (or I believe any other cab driver) one single thing about how hotels or cab stands operate. That is to say, he constructed a major part of his study without asking the experts in the field (us) how the phenomena he was studying actually worked.

Take the W Hotel (above photo) for instance. Dr. Hara found that at certain times of the day it was easier for a taxi driver to find a customer than for a customer to find a cab. Fine. I'm sure it's sometimes true. What Dr. Hara didn't understand is that the "shortage" of cabs at this location was due largely to policies of the people running the W hotel. That's the polite way of putting it. Another way, would be to say that the problem is primarily caused by the corruption and cluelessness of the hotel management and their doormen.

Deconstructing the W 

The hotel is at the corner of 3rd & Howard streets. The door where people come out to get cabs is on Howard about one hundred feet from the corner just behind the limo in the photograph. The taxi line is in front near the corner but away from the door.

What we are looking at here is an example of the aforementioned corruption. The women in the photo came out of the door and originally started walking toward the taxis. The limo driver quickly climbed out of his vehicle and engaged her in a conversation. A few moments later, she got in the limo and drove off. This was not an accidental occurrence. In order to be the woman's first option, the limo driver pays off the doorman who most likely splits the payola with management.

It doesn't have to be this way. At the Las Vegas Bally Hotel, for instance, taxis are the first option. But in most San Francisco hotels (the Fairmont, the Mark Hopkins, the Ritz, the Intercontinental, the Stanford Court, the Mandarin, all the Hiltons, all the Hyatts, etc) the doormen try to put customers into limos first - especially for airports runs and other long rides.

"So," the gentle reader might ask, "the cab driver gets the shaft. So what?

So, two things. Corruption breeds hostility and inefficiency. 1. Cab driver are not likely to go out of their way to help out these hotels when they do get busy. 2. Customers also are often kept waiting by the doorman for a driver who "really knows how to get to the airport" when of course what they are really waiting for is a dude carrying a bribe.

The "clueless" part of the equation should be obvious but apparently is not.

The "W" is on 3rd & Howard. Both are one way streets. 3rd is one of the main corridors heading downtown. The taxi shifts change from 3 pm to 7 pm. During that time, 3rd is usually flush with empty taxis that pass right by the W. But, as noted before, the entrance to the hotel is a hundred feet away on Howard. If a taxi driver wants to pick up the fare at the W, he or she has to spend 5 or 10 minutes circling the block through heavy traffic to get to a customer who almost certainly will not be going to SFO and might not be there at all.

The best cure for the "cab shortage" at the W then would simply be for the SFMTA to put one or two passenger zones on the 3rd street side of the hotel and move the doorman along with his customers to the corner. Viola! Problem solved!

This kind of artificial "taxi shortage" that is actually caused by management polices is hardly unique to the W. Numerous other hotels such The Intercontinental are set up in the same way - with similar results.

Doormen at other hotels such as the Fairmont, the Ritz and the Stanford Court insist that cab drivers only pick up in driveways that are frequently gridlocked and slow down the process of getting a customer into a cab 5 or 10 minutes every ride. Putting out more taxis won't speed up these door twits one wit.

And, this doesn't begin to mention the "Transportation First" polices of the SFMTA that have created gridlock on every street south of Market and drastically slowed down both the pick up times and the transportation of the public by taxicabs in the process. In addition, a seemingly small thing like making it illegal to turn left from Powell onto Sutter has had a profound negative effect on cab service at twelve small hotels on Sutter and Bush near union square. Once again, more taxis won't improve this situation as long cab can't make that left turn.

Dr. Hara could have found out about such things by talking to a few cab drivers. But perhaps the subject wouldn't have interested him anyway given that it didn't fit in with his theme.

 On the other hand, talking to us would've saved him from making a totally useless study of the pick up times at the cab stand on 2nd Street at ATT Park.

 Yes - the pick up times can be slow at this location. But with hundreds of cab customers coming out of a game at the same time that is more or less inevitable but the major reason for the shortage of taxis at that cab stand is PCO Badge No 309 (photo) and his colleagues. You can read more about the absurd details here but the important fact is that this twit (Sorry for the repetition but what better word is there?) gave me a ticket for picking up customers when I was legally parked because ... well I'm not too sure. Except that he clearly believed that ticketing cab drivers was far more important than helping baseball fans get home after a game.

I later learned that almost every cab driver has been ticketed by these clowns while trying to do their jobs. The result is that almost no experienced driver will head to the stand on 2nd. While many drivers won't go near the area when the ball games get out at all, I find that it's usually safe to pick the fans up at Cal Trans. I mean, like, I'm a fan too.

But this is minor stuff.  More important is the fact that the way that Dr. Hara went about collecting much of his data was fundamentally flawed.

More on this in a future post.

More Cabs, Hotels & Illegal Taxis

A doorman at the Marriot Marquis came up to me after the MTA Board voted to add the 120 plus taxis and rhetorically asked how they could put out more cabs without busting Lyft, Sidecar and Uber?

I thought it was an interesting question for a number of reasons - not the least being the source. If there is a hotel that could justly complain about the cab service, it would be that Marriot. It's at the end of the Union Square hotel row, the traffic is bad at the best of times and it is currently impossible to get to directly from the Square.

Yet, here is a doorman with a opinion that echos what I told he MTA Board. "You shouldn't put out more cabs unless the bogus rideshares are driven out of business."

This helps underline what I think are the weakest parts of the Hara report: the sections on the hotels and the ridesharing.

But before doing so I have to confess that I've partially changed my mind. The major themes of the report seem correct. There are too few taxis in San Francisco compared to some other cities and more people in the neighborhoods would take cabs if they could be sure of getting one. Almost everybody who gets in my taxi tells me this. If the city and state would eliminate the illegal vehicles, we could use some more cabs. Putting out 120 more now (an increase of less than 1%) - especially if the taxis go to people on the list - won't kill the business and will finally reward a few drivers for their devotion to the transportation business and their patience. And, if the fake cabs are zapped, we could use the additional taxies.

On the other hand, if the "fake rideshares" are left untouched, people should still be able to recoup their $125,000 investment. Friday and Saturday nights will still be Friday and Saturday nights.

More tomorrow. I have to try out my new running shoes then do to work.

SFMTA Board Authorizes 120 New Taxi Permits

Although the type of taxi permits were not part of the vote, it appears that they will be sold to the drivers at the top of the Waiting List for $125,000. The text of the amendment can be read below.

"Authorizing the Director to issue up to 120 new taxi permits in 2013 and up to an additional 200 new taxi permits in 2014; to offer such medallion permits to qualified applicants on the medallion waiting list, or lease medallion permits directly to drivers or to color scheme permit holders; establishing that all taxi medallionpermits shall be operated with a hybrid, electric or compressed natural gas vehicles; and amending Transportation code Section 1116 to reduce the Medallion Transfer price to $250,000, reduce the Reduced Medallion Transfer price to $125,000, and change the Medallion Surrender Price to $200,000."

The CPUC Workshops

Workshops on Rulemaking on Regulations Relating to Passenger Carriers, Ridesharing and New Online-Enabled Transportation Services (NOETS) were held on April 10-11, 2013 at the San Francisco CPUC auditorium. In the photo are some of the attorneys for Sidecar, Lyft and Uber.

I'm just giving a short impression of the workshops so I'm not going to do a laundry list of the people involved. I'm going to go into more detail later. Besides, the proceeding were videotaped and the speakers gave their names before talking. A link to the video will be provided at the end of the post.

My impression is that these proceeding were largely decided before the workshops were held. There are several reasons for this:

• As is well-known, Cease and Desist Orders were removed from Lyft and Uber before the hearings began.
• Less well-known is the fact that the Cease and Desist Order has not been removed from Sidecar. Nonetheless, the company has put out around 1,000 illegal cabs since they were given the Order and are not even going to be slapped on the wrist for it.
• In fact, a Sidecar attorney has said that they have just about worked an arrangement with the CPUC which would seem to make the proceeding very much beside the point.
• The CPUC backed up, not only Lyft, but Sidecar when they refused to show their "Million Dollar" insurance polices for us to look at.
• Early in the workshop an Uber official was given all the time he wanted to present his position. Director Christiane Hayashi of the SFMTA was later cut off in the midst of a speech because the moderator said that she was taking too much time.

But you can judge this for yourself.

In addition, the very way the issues were formulated assumed the acceptance of Lyft, Sidecar and Uber's major positions.

   1. We were instructed to frame our comments in terms "protecting public safety" and "encouraging technological innovation."

• Early on, the moderators repeatedly interrupted the proceeding to say that speakers weren't addressing the part about "encouraging innovation" enough.
• After the third such interruption, it became clear that by "technological innovation" they meant what Lyft, Sidecar and Uber do.

    2. We were also told to work out a "compromise" which would naturally assume the legal acceptance of Lyft, Sidecar and Uber.

• A compromise could be worked with Uber - in so far as it operates as taxi app or a limo service.
•  But compromise is of no interest to them whatsoever.
• Legalizing the bogus, so called "ridesharing services," the actual illegal taxicab services of Lyft and Sidecar, would effectively deregulate and thus destroy the legal taxicab industry. 
• There is clearly no room for compromise on this issue.

Numerous speakers pointed out that the apps used by the NOETS are in no important ways different than apps such as Taxi Magic and Flywheel that are already being used by taxis and limos.

My own position (was and is) that the only thing innovative about the NOETS has been their insistence in marketing their products by violating laws and ordinances set up to protect the public.

I would like to add that with many technologies the original invention is the crucial thing - the one that changes the world. All further innovations and improvements are minor or secondary.

Take the word processor for instance. We get a new version of Word every few years but it makes little difference except to our pocketbooks. The thing that the changed the way I write was the original invention. In fact, the WordPerfect program that I used fifteen years ago was in many ways easier to use and better than the world processor I'm using now.

With Taxi apps the major innovations are over. They all connect passengers and drivers more or less instanteously. They all have GPS showing routes and giving approximate times for connection. They all offer the driver the option of talking to the customer and visa versa.

Unless someone comes up with a way to transport customers ala Star Trek technological innovations are not really at issue here.

What was not mentioned as subjects for the workshops were the negative effects that the NOETS are having on the incomes, protections and benefits of professional drivers as well as the taxicab and limo industries.

One positive sign in the workshops was that an attorney for Sidecar seemed to think that HIS side was being abused and accused us of making "ad hominen attacks" on them. I don't really know what he was talking about because, with one or two admittedly regrettable exceptions, I think we pretty much attacked them on the issues.

But the attorney did add a little levity to the workshop by snapping at a CPUC official when she asked him a question.

"Don't interrupt me when I'm speaking!" he snarled. And people criticize me for being abrasive?

For physicists only: The most ridiculous argument was put forth by Attorney Edward O'Neill of Uber when he claimed that the few seconds it takes for a passenger to hail a cab using an Uber app and be accepted by an Uber driver constitutes "pre-arrangement."

Hmm - is my comment ad hominen?  O'Neill's argument is its own reductio ad absurdum.

Anyway - you can watch the action here.

MY Pre-hearing Conference Notes

I was pressed for time so I'll just make my points with Bold and bullets. Sorry.

The so-called “community driving vehicles” or “peer to peer taxi services” should not be legalized under any circumstances.

It would be impossible to regulate them.

• How would you tell a Sidecar from any other car? You couldn’t.
• It would cost the state millions to even try to regulate them and California is already strapped for money.
• 1. One reason that illegal taxicab services like Lyft and Sidecar got a foothold in the state is that the CPUC only had one investigator for all of northern California.

Legalizing Lyft and Sidecar, etc. would be the same as total deregulation of the personal transportation business.

• Aside from the occasional right-wing think-tanker, most experts who have studied the deregulation find that it does not benefit the cities that have deregulated.
• TAXI DEREGULATION: INTERNATIONAL COMPARISON by Choong-Ho Kang, BSc(Eng), MSc(Eng) http://www.taxi-library.org/kang0898.htm#c6
• Entry Controls in Taxi Regulation by Schaller Consulting http://www.schallerconsult.com/taxi/entrycontrol.htm

According to Schaller:

“As the competition increases the amount of money for each driver declines. Drivers thus tend to congregate in the places that are busy already instead of going to the outlying area where they are less likely to get a ride."

• The quality of the vehicles also declines because there is less money available to buy new ones. 
• I would like to add that the quality of the drivers declines because experienced drivers will seek other work as income levels decline.

• More from Schaller: "there appears to be a strong relationship between taxicab crash rates and driver incomes. Higher driver incomes are associated with lower crash rates." http://www.schallerconsult.com/taxi/safercabs.pdf In Addition, the public could be exposed to danger from accidents or assaults by untrained and unvetted drivers.

Deregulation is already taking place in San Francisco.

• Income of drivers is dropping dramatically.
•  Resulting in many professional taxi drivers leaving the business.
• They are being replaced by part-time amateurs who are untrained.

The proliferation of illegal vehicles is leading to a drastic decline in the quality of cars.

• More than 90% of San Francisco taxicabs are hybrids that are inspected daily.
• Lyft, Sidecar, etc are using older, vehicles that are inspected randomly if at all. http://phantomcabdriverphites.blogspot.com/2013/02/undercover-at-lyft-and-sidecar-100000.html
• In addition, hundreds of gas guzzling limos, many of them used, are clogging city streets.

Classic deregulation theory says that a natural balance will eventually work out between customers and taxis or other personal carriers because oversupply will cease when only so many drivers or companies can make a profit out of the business.

• However, app suppliers like Lyft and Sidecar have virtually no expenses.
• They don’t buy cars, pay for insurance, pay for workers comp or claim any responsibility for what happens in the vehicles that are hailed using their apps.
• If, for instance, a Lyft customer were to be assaulted by a Lyft driver, Lyft has already disclaimed any responsibility in its “terms” that the customer (usually unknowingly) has signed.

Despite the fact that the city is already overflowing with their illegal taxis, both Lyft and Sidecar are continuing to pump out new drivers.

• Sidecar has so many vehicles in operation that a driver only has 15 or 20 seconds to respond to an order before  it is given to the next nearest five cars.
• This only would only happen if there were more cars than there is business.
• Sidecar has come out with a heat map to show their drivers where most of the business is.
• Which happens to be the same places where taxicabs are usually working.
• Lyft and Sidecar vehicles are also seen playing flags or lined up at hotels.
• Which they wouldn’t be doing if they had enough business.

Legalizing Lyft, Sidecar, etc. would lead to massive congestion and pollution.

• This is already taking place. Even if all the other vehicles were hybrids like San Francisco taxis, the duplication of effort - with all these vehicles competing for the same rides in the same places - would cause (and is causing)  massive congestion and pollution.
• The vast majority of the thousand+ illegal vehicles put on the street by Lyft, Sidecar etc. are not hybrids but older gas guzzling vehicles.
• If you add the thousand or so limos cruising the town - you have an environmental nightmare.

If the CPUC were to rule that Lyft and Sidecar et al were to be classified as “ridesharing” or “car pooling” services that could be covered by Personal Liability Insurance, the Personal Liability Insurance rates of every driver in San Francisco, as well as California and probably the country, would have to go up.

• Bruce Schaller did a study in 2004 showing the NYC cab drivers were “Less Crash-Prone Than Other Drivers.” http://www.schallerconsult.com/taxi/crash06.htm
• Schaller said,

"The lower crash rates for cabbies are not so surprising given that taxi drivers are far more experienced than other drivers. They are behind the wheel up to 3,000 hours a year. Their driving records are scrutinized by the Taxi and Limousine Commission and auto insurance carriers. They risk losing their livelihood if they have too many crashes or get too many tickets."

But leaving this aside, even if (and these are San Francisco drivers mind you - arguably the worst in the country) the illegal community cab drivers were A number one the cars would still be more accidents for two reasons:

• Drivers would be out working for more hours and thus have more accident exposure.
• They would be working at the times when most accidents take place:
• Morning rush hours.
• Noon rush hours.
• Evening rush hours.
• Friday and Saturday nights.

 Insurance companies do not loose money. If the CPUC forced them to insure the bogus “ridesharing” services with personal liability insurance, the insurance companies would be forced to raise the rates for everybody else in order to stay profitable.