Mayor Newsom's New Plan to Soak the Taxi Industry

Yesterday, at the SFMTA's Police and Governance Committee, Mayor Gavin Newsom unveiled his proposed plan for taxicab reform. Although the presentation was made by Taxicabs & Accessible Services Director Christiane Hayashi, the plan was a modification of one originally drawn up by MTA board member Malcolm Heinicke during the Charter Reform meetings of 2007.

The highlights (really mostly "lowlights") of the plan are:

• The gradual destruction of the Prop K waiting list. The list would be cut off at 5 years ago, meaning that 178 people who thought they were in line for a medallion would get the shaft. Medallions would be given out as usual for the rest of the people on the list until the list was exhausted. Prop K would then be kaput.
• Post K medallion holders would be allowed to retire with an annuity estimated at $1,500 a month.
• Pre K medallion holders would be allowed to die peacefully.
• The city would be cleansed of medallion holders.
• All medallions, including those held by taxi companies, would eventually become M medallions.
• M medallions would be leased, not sold, to cab companies.
• The amount of money paid for the leases would be determined at periodic auctions involving only cab companies.

The main purpose of the plan is clearly to gain revenue for the City but there is no real estimate of the total amount that they expect to receive. They do expect to gain:

• $5.5 million a year from a 50/50 split with 300 K retirees.
• $1.73 from Pre K medallions that covert to M medallions.

But the math doesn't work - at least not for the Pre Ks - so I guess I'll do it for them. (Correct me if I'm wrong.) Ultimately, (when all medallions are M medallions) the city expects to be able to earn:

• 1,500 medallions at $3,000 per month =
• $4.5 million per month =
• $54 million a year

No wonder they didn't do the math. City Controller Ben Rosenfeld estimates that the entire taxi industry currently brings in $65 million a year. The plan, in short, is insane.

The retirement option is supposed to be a sop to the medallion holders but $1,500 a month is not enough to retire on in San Francisco.

Newsom also threw a bone to the gate and gas drivers by stating that only non-medallion holders can drive M vehicles. This would indeed mean that more regular drivers would be given good shifts but the long term effect would be to take $2,000 a month away from drivers who would have become medallion holders and give the money to the City.

The plan in reality appears to be one of those Bush-type vehicles where the real intent is to destroy social value. Medallion holders would be wiped out as a class. Power and money would be taken away from both cab drivers and taxi companies and given to the MTA.

However, these figures involved appear to come from Heinicke's fervid late night fantasies.

• Given the small amount of the annuity, medallion holders aren't likely to retire until they are ready to die.
• Jane Bolig, Manager of Desoto Cab, said that her company couldn't afford to pay $3,000 per month and turn a profit. The companies are paying about $2,000 a month for a medallion now. Why would they bid $3,000?
• And, with only five or so companies bidding against each other, you'd could expect them to collude and bid less.

In sum then, the plan would:

• Destroy Prop k.
• Liquidate medallion holders.
• Take money away from both the companies and drivers.
• Destroy San Francisco's pool of professional drivers by eliminating the list.
• Ruin taxi service in the city by lowering the quality of both the drivers and the equipment.

Not surprisingly everybody in the taxi industry stood in unity against the plan including: Jim Gillespie of Yellow Cab, Barry Korengold of the SFCDA, Mark Gruberg of the UTW, Carl Macmurdo of the MHA, Charles Rathbone and Tom Stanghellini of Luxor Cab, several drivers and myself.

Lost in the hubbub was the fact that the taxi industry also spoke in unity against MTA's reorganization plan to drop taxi's from an autonomous division equal to Transit to a subdivision and demote Director Christiane Hayashi.