Monday, June 29, 2009

Players & Plans: Jane Bolig Comments & Clarifies

Dear Ed,

Thanks for the ink. I happened upon your blog a few days ago and was pleasantly surprised at your kindly appraisal of my proposal.

Unfortunately, I don't think the ESOP (Employee Stock Ownership Plan) proposal has much of a future. It has no powerful champions. It doesn't promise big bucks to bureaucrats or speculators, nor does it wish to seize and redistribute medallion profits. In its undramatic way it tries to imagine a means by which we could give elderly and disabled medallion holders respectable compensation for their medallions and a realistic retirement hope for all drivers through stock ownership. It imagines an industry in which cab companies compete primarily for customers rather than medallion holders, and in which we need fewer and fewer regulations...and regulators.

ESOP, I think, is really pretty simple. Drivers within a company would use their gates to purchase medallions from current medallion holders who wish to retire. "Wouldn't that mean higher gates?" No. Same gates, but instead of your money just going to another person, you--and your fellow drivers in your company—would purchase real ownership in the form of stock. You earn your shares simply by working. The more days and years you work, the greater your shares. When you are ready to retire you cash out your shares.

Imagine that instead of working as a driver for 15-20 years and then getting a medallion--and then worrying about staying healthy enough to keep it--you could work 20 or more years and at the end of that time leave the industry with enough income to live comfortably for the rest of your life. That's the ESOP idea.

ESOP doesn't wipe out the current system. Drivers who have invested a lot of years working and waiting for their medallions would not lose their sweat equity. Newly issued medallions still would go to the top qualified persons on the waiting list. What about reissued medallions? Because current medallion holders could, but would not be forced to, sell their medallions to ESOPs, their medallions, too, after death (or confiscation) would be reissued to those on the waiting list, just as they are now.

Once a medallion was sold to an ESOP, so long as the company it was in remained solvent, it would not move. As time went on, yes, there would be fewer and fewer medallions available to individuals. By then, however, obtaining an individual medallion would become less of a necessity and more of a cherry on top of an already tasty reward for years of service.

ESOP is not an instant fix. (There haven't been any instant fixes in 30 years, nor will there be, no matter what changes may come.) The gradual transformation it offers, however, is our best hope for the healing and revitalization of our afflicted industry.

As I noted earlier, however, there are too many large, contending forces that want it all now, whatever "it" is: Big bucks for MTA vs. big bucks for medallion holders vs. confiscated bucks for city hall commissars. I'm reminded of a book I read as a kid, "Millions of Cats," in which millions of cats fight over which is the prettiest. In the end the only one left is the one that didn't fight.

Perhaps that's ESOP.


No comments:

Post a Comment