Wednesday, June 24, 2009

Players & Plans: The UTW & The Asian Law Caucus

Before examining this proposal, I should admit that there are two reasons why I can't pretend to be objective:

1. Money for the plan would come out of my pocket. It would treat other medallion holders and myself as if we owned companies instead of just medallions and tax us as much as $10,000 per year.
2. The UTW went to Supervisor Chris Daly's back door before the people in the taxi industry even got a chance to look for more reasonable and creative solutions to the benefits problem at Town Hall Meetings.

The UTW and the Asian Law Caucus (ALC) mainly want:
  1. Health insurance for the drivers.
  2. Retirement for the drivers.
  3. Enforcement of laws against illegal limousines.
Well and good. I agree. In fact we medallion holders are already paying $1.5 million (or 5% of our incomes) to (among other things) help fight bandit limos - who also steal rides from us.

The ALC does make several statements that I can agree with:
  • Non medallion drivers, many of whom are immigrants, are low paid, forced to sign "independent contracts" which deny them the right to unionize and are exploited in numerous ways.
  • These exploited drivers must wait for as long as 15 or 20 years in order to own a medallion.
  • Once a driver owns a medallion his or her life is changed dramatically by an income that effectively doubles.
  • In addition to whatever they make driving their cabs, medallion holders earn around $2,000 per month by leasing their taxis out when they themselves are not working.
  • "The dream of holding a medallion inspires many taxi drivers to stay in the industry and maintain good driving records."
Well and good. It's all true. The disagreement starts with the UTW's financing plan. They want to charge medallion holders an additional fee of from 20% (ALC) to 50% (Supervisor Chiu). This is a tax rate many times higher than any company or corporation pays for employee benefits.

The reasoning to justify such outrageous fees - if reasoning is the word - starts with the above mentioned facts and then goes bonkers. George Orwell probably would have called the UTW's arguments double-think - in his kinder moments. Many of their other rationalizations are just plain false.
  • The $2,000 that these poor, exploited drivers stayed in the industry for up to 20 years to earn is magically transformed into "unearned income" by the UTW. Apparently all those years of toil and strife should gain drivers nothing but a chance to pay the bills for people who haven't yet paid their dues. It's OK for those abused immigrants to dream but not too much.
The ALC also likes to load it's arguments. The word "immigrant" mysteriously disappears whenever medallion holders or fees are mentioned although a substantial number of the holders who would pay these fees are indeed immigrants.
  • The $2,000 is treated as a huge pile of money by the ALC that claims that imposing extortive fees "will encourage medallion holders to actually drive their vehicles ..." This is a variation on a bogus factoid constantly yammered by Rua Graffis of the UTW who once claimed that medallion holders stayed home "eating pizzas" instead of driving.
This is nonsense! Where do these people think we're living - San Francisco Del Mar, Mexico? Studio apartments here rent for $1,500 a month. Even if there wasn't a driving requirment, we'd need to work. But there is a requirement. If medallion holders don't work, they lose their medallions. Personally, I work about 50 weeks a year just to tread water.

  • The purest piece of double-think, however, is the idea that the plan will give medallion holders an "incentive to retire." This in turn supposedly would result in an "exit" strategy that is lacking now.

Think and think about this. The medallions holders would pay 20% to 50% of their incomes to finance not only retirement plans but other benefits for thousands of people. Any such plan would pay them back cents on the dollar. Maybe I just have a strange sense of humor but wouldn't we be better off putting that $4,000 to $10,000 into our own plans? As for the "exit strategy" - another joke. Under the UTW's plan, holders would be able to save little if anything and would cling to their jobs even more desperately than they do now.

As a former insurance underwriter, I think the main flaw of this and other proposals like it is that it distributes the cost among too few people. Usually the rate of insurance is spread among tens of thousands or hundreds of thousands of people. This was the case back in the day when the Teamster's union provided benefits for San Francisco's cab drivers.

But, the ALC and the UTW want to stick less than 1,500 people with the bill. This means that San Francisco's medallion holders would be charged a rate five or ten times higher than any other group pays to provide similar benefits. As such, the fees would be punitive and oppressive.

However, one aspect of this proposal is true. It would speed up the waiting list. Few drivers, immigrant or otherwise, would be willing to spend 15 years being abused by the companies only to be exploited in turn by the UTW, the Asian Law Caucus and the City of San Francisco.

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