Millionaire Mayor’s Plan to Bail Out San Francisco by Soaking Its Cab Drivers. Part II

My first blog on this subject ended up on an high note with angry cab drivers apparently backing down Mayor Gavin Newsom. But I think this created a false impression - at least with me. As it turns out the Major actually didn't back back off. He simply re-strategized - or maybe not. This is San Francisco politics: the subject is convoluted.

• Mayor's original plan had been introduced and withdrawn by Malcom Heinicke as the chair of the Taxicab Charter Reform Working Group which is now disbanded.
• Heinicke, who is a member of the MTA (see A Micro History of ...), reintroduced the plan as one of nine or ten Proposition K reform proposals to be discussed and considered by the Taxis and Available Services Town Hall Meetings. (Whew! No wonder these people use acronyms.)

The Mayor's plan is one of the stranger documents that I've seen - especially when you consider that it's supposed to end up as a law. The most striking thing about it is that it contains no hard figures or percentages.

• It states, for example,  "The City would call in a small percentage of the medallions (perhaps 10% per year) for re-issuance ... " and "current medallion holders will receive some portion of the ... proceeds."
• Even stranger is the idea that the buyer of the medallion could only own it "for a set term." If I understand this correctly, it means that the new medallion owner (or not) would "hold" it for, say, three to five years (or whatever) when he or she would be forced to re-sell it. 
• While the original medallion holders would receive a "minority of the proceeds," the new medallion holders would "receive a set percentage," which sounds better but might not be.
• In addition, "The MTA would have the authority to issue new medallions of a different nature ... " apparently at any time. This would necessarily lower the value of the medallions that had already been sold. In other words, the MTA would be able to change the rules whenever.
• Newsom and Heinicke seem to have been so mesmerized by their fantasy of endlessly milking their "cash cow" medallions that they failed to realize that no one in his or her right mind would buy a medallion under such conditions. 

Or not. The plan is so unworkable that it may have been drawn up simply to scare the shit out of the taxicab drivers - in which case it has succeeded admirably.

S.F. Taxi Drivers Outraged by Mayor Newsom's Duplicity

Last week's Taxi Town Hall Meeting turned emotional when driver after driver expressed outrage at their callous and duplicitous treatment at the hands of Mayor Gavin Newsom. 

The drivers are ordinarily divided between those who own medallions and those who don't, those who manage companies and those who merely work for them, but they were united in their hostility toward the Mayor's plan to steal (calling a spade a spade) their medallions for political purposes.

• Mark Gruberg of the United Taxicab Workers (UTW) attacked the Mayor for sneaking the rider into Proposition A that put taxicabs under the control of the Metropolitan Transportation Agency (MTA) "without public discussion."
• Using words like "traitor" and "liar," other drivers condemned Mayor Newsom for going back on his word not to make changes in Proposition K which forbid the sale of medallions. 

1. Fact - Newsom did sign an agreement together with the then President of the Board of Supervisors Aaron Peskin not to change Proposition K and made verbal statements to the same effect on several other occasions.
   
2. Fact - Newsom announced his plan to auction the medallions, with the City keeping from 51% to 99% of the profits from the sale, in January 2009 - two months before Proposition A even took effect on 3/01/09.
3. Fact - In New York City the transfer of a taxicab medallion is taxed at a rate of 5%.

• Ruach Graffis of the UTW said that she'd worked as a driver for 37 years and, despite the fact that she is already partially disabled, is given no medical or disability benefits under the current system; and that Mayor Newsom's plan would leave her with nothing.
• Other drivers who have been waiting up to 13 years on the list to own  a medallion said that the Mayor's plan would leave them without a retirement or a future when they were unable to work. 
• Chris Hayashi, the director Taxis and Available Services, attempted to calm the drivers down by telling them that she wanted to find a solution that would help all the taxicab workers whether they owned medallions, were on the list or were simply ordinary drivers. She further said that the purpose of the Town Hall Meetings was to find such a solution.

1. However, Hayashi admitted that, while she was independent, she wouldn't "have a job in 2011" if she didn't find some revenue from the taxicab industry for the MTA.
2. She also said that the only way to raise revenue from taxis was to sell the medallions and that:
3. The board of the MTA is appointed by Mayor Gavin Newsom.

• The manager of Desoto Cab, Jane Bolig, lost her usual coolness and wit as she blasted Newsom and the MTA, expressing her fears that the Town Hall Meetings were nothing but a farce designed to make the Mayor look democratic. 
• Medallion Holder Mary McGuire seconded this thought and pointed out that she had been fired from the board of  the Taxi Commission by Mayor Gavin Newsom for voting to fire the director, Heidi Machen, after Machen had hired her ex-con roommate to look into the personal records and finances of cab drivers, medallion holders and the cab companies. 

Chris Hayashi closed the meeting by telling the drivers that they had six months to come up with a plan that would give the MTA money and still benefit the drivers. But, she didn't say by what right the MTA is demanding the revenue.

A Breathe of Fresh Air

At a Taxi Town Hall meeting on 3/10/09, Chris Hayashi, the new Director of San Francisco's Taxis and Available Services showed herself to be a refreshing change from her predecessor on the Taxi Commission, Heidi Machen. Whereas Machen had treated the drivers with overbearing arrogance and privately referred to them as "either criminals or people who soon would be,"  Ms. Hayashi clearly regarded a room full of owners and drivers as respected equals.

She discussed and listened to their opinions concerning the various plans to change how the taxi industry operates in San Francisco.  After a general conversation about possible scenarios, she led an examination of  proposed taxicab rules in the San Francisco Transportation Code.

Ms. Hayashi either changed or eliminated several provisions that drivers objected to including an obscene "snitch" rule that would have taken away the medallion of any owner who had failed to turn in another owner whom he or she knew to have been arrested or convicted of a crime. Such rules have a long, inglorious history and have been used by people as diverse as the commie dictator Joseph Stalin, the anti-commie witch-hunter Joe McCarthy and the Christian Brothers of Cretin High as techniques to humiliate and destroy their enemies. Heidi would have loved it. 

However, the subject that aroused the most passion among the drivers, limousines, wasn't even supposed to be on the agenda. Ms. Hayashi kept telling drivers that it would be discussed at a future date but, they kept bringing the subject up, so she finally promised that the Taxi Detail was going to hunt down, punish and eliminate illegal limos in San Francisco. Among other ideas, she proposed impounding their cars for 30 days when limo drivers were caught violating a law. "That should put a stop to them," she said with a smile.

Hayashi's attitude and approach stands in such sharp contrast to the Mayor's arrogance and indifference toward cab drivers' fates that I can't help wondering what's really happening. 

Historically, Mayors like Diane Feinstein and Willie Brown have used commissions and hearings as way to rubber stamp their own plans while giving them the veneer of democratic processes.

This does not appear to be what is going on here. Or is it? No one I've met has a bad word to say about Chris Hayashi, but it's unclear as to how much power she actually has. It may be that she's an unwitting pawn in an elaborate good cop/bad cop scheme designed by Newsom.  

Millionaire Mayor’s Plan to Bail Out San Francisco by Soaking Its Cab Drivers: Part 1.

 San Francisco Mayor Gavin Newsom who has used his movie star good looks and mastery of misleading sound-bites to become a leading Democratic California gubernatorial candidate, recently tried to fix his city's $600 million deficit by attempting to take 1,500 taxi medallions away from their owner/drivers and sell them at an auction.

• Saying vaguely that the city "would keep most of the money" from the auction "but some would go to the drivers," Newsom wanted the profits to go toward regulating the taxi industry and helping finance San Francisco's sinking public transportation system.
• At approximately the same time as he tried to impose a sales tax of 51% to 99% upon cab drivers - one of the lowest paid groups of workers serving the city - he also tried to veto a ballot measure to re-impose a 1.395% Gross Business Tax - which would raise far more money. Newsom, who along with billionaire Gordon Getty owns numerous bars and restaurants that would be affected by the business tax, said that while the proposition "would raise city taxes by tens of millions ... raising taxes does not necessarily raise revenue."
• The San Francisco Board of Supervisors overrode the Mayor's veto and put the measure on the ballot.
• Newsom, who has also claimed that the "challenge" for his administration is to save "San Franciscans from losing their jobs, losing their homes and losing their small businesses" would have taken jobs and businesses away from as many as 1,000 cab owner/drivers with his plan. They wouldn't have to worry about losing their homes, however, because very few cab drivers can afford one.

When over 100 angry cab drivers (many of whom were pretty good at sound-bites themselves) showed up at an MTA meeting to protest the plan, Newsom had it withdrawn.

A Micro History of S.F. Taxicabs with Definitions

In order to understand the issues involving the Mayor and San Francisco cab drivers, a few definitions and a little background are necessary. For starters, it's impossible to understand anything unless you know what a medallion is.

• Medallion = a license to own and operate a taxicab. I believe (correct me if I'm wrong) that all U.S. cities have some form of medallion system. In all cities, except San Francisco (once again, correct me if you can) these medallions are for sale, usually at auctions. In New York City they cost upwards of $500,000. They are currently not for sale in San Francisco because of:
• Proposition K = which was passed by San Francisco voters in 1978 and gave the city a unique system. The medallions are not for individual sale but are owned by the city and the rights to use them are sold to working drivers for a fee. There is a limit of one medallion holder (often called an owner) per taxi. He or she can use the medallion as long as he or she follows certain rules. When the holder retires or dies, the medallion reverts to the city and the rights to use it is sold to the the first driver on a waiting list. Over the years, the rules covering the holding of medallion have evolved. Currently: 

1. It takes an average of fifteens years to get to the top of The List.
   
2. A driver has to have worked a minimum of 800 hours per year for five of the last six years to qualify for a medallion.
3. Medallion holders have to work a minimum of 800 hours per year to keep their medallions.
4. If the holders cannot work because of disability or illness, the medallions are be taken away and given back to the city.
5. The San Francisco Medallion Holders Association has filed a lawsuit against the above rule on the basis that it violates the American Disabilities Act. A verdict is pending in the Ninth Circuit Court of Appeals.
6. Proposition K could not be changed except by San Francisco voters. Numerous attempts to eliminate Prop K were all overwhelmingly voted down. 
7. Then along came:

• Proposition A = which was passed by the voters in 2007 as a way to raise money for the reform of the Municipal Transportation Agency (MTA). The money was primarily to be used for the repair, rebuilding and improvement of the bus and rail system. The measure contained a one sentence rider that put taxicabs under the control of the MTA. The Mayor took this to mean that the voters had overturned Prop K.

Definitions 

• Independent Contractor = those who have signed an independent contract with companies rather than work for a salary. All the cab drivers in San Francisco are Independent Contractors. It is an accurate description of the condition of Medallion Holders. For ordinary drivers, however, the contract is pure fiction. About the only thing they are really independent of is the protection of most labor laws. Thanks to a Supreme Court reject named Robert Bork, independent contractors can't legally form a union.
• The List = the waiting list that cab drivers sign up for the right to own a medallion. The medallions are awarded on a first come first serve basis.
• Medallion Holders = guys who have bought the right to own and operate taxicabs. Often incorrectly called "owners."
• Medallion Holders Association (MHA) = what it sounds like. An organization devoted to the interests of the medallion holders.
• Metropolitan Transportation Agency (MTA, SFMTA) = The agency that controls San Francisco's buses, light rail, taxis and other vehicular sevices.
• Transferability = The right to transfer or sell a cab medallion to someone else.
• United Taxicab Workers (UTW) = what is sounds like. An organization devoted to the interests of non-owner cab drivers. It's an association, not a union.