Barry Korengold Clarifies His "Criteria for Compromise"

Barry Korengold (photo) wanted so many changes in my post of his plan that I decided to turn the editorial juggling over to him.

I think the explanation of our "plan" would work better presented as a "criteria." As we don't really give any specific details, these are conditions that must be met by any plan that would get our support.

Also, it's called "Criteria for a Compromise". The word "solution" is not in the title. The SFCDA would consider a compromise if these conditions are met:

• The principles of one driver per medallion and a minimum driving requirement of 800 hours per year would be maintained.
• Most medallions would continue to be issued to those on the waiting list as they have been, with nominal processing fees.
• Only a small percentage of medallions would become transferable at a fixed price, subject to adjustments for inflation.
• Qualified drivers on The List would be offered "the right of first refusal" in the order that they're on the list.
• Low interest loans would be made available to all qualified medallion applicants. This would include loans for the down payment.
• A fixed price for a medallion would be set at a fiqure that allows a new medallion holder to increase his or her income after making payments on a loan - without having to work more than 40 hours per week.
• A percentage of any transfer fee would go to a drivers fund.

Town Hall Meetings: The SFCDA's Criteria for Compromise

Barry Korengold of the San Francisco Cab Drivers Association presented plans for both a compromise solution to taxi reform and a driver's investment fund at the November 23rd Town Hall Meeting.

Called a "Criteria for a Compromise solution," the SFCDA plan would:

• Maintain the principles of one driver per medallion and a minimum driving requirement of 800 hours per year.
• Continue to issue most medallions at no cost to those on the waiting list.
• Consider transferring a small number of medallions at a fixed rate with adjustments for inflation.
  
• Give drivers on The List the right to purchase (or decline to purchase) the transferred medallions on a first come first serve basis.
• Provide Low interest loans for the drivers as well as help in making a down payment on the loan.
  
• Insure that the fixed price be calculated in such a way that a new medallion holder would be able to increase his or her monthly income after making payments on the loan without working more than 40 hours per week.
  
• Guarantee that a percentage of any transfer fee would go to a driver's fund.

The SFCDA plan would also allow drivers to retire although it's unclear from reading the text exactly what form this would take. There appear to be two possibilities:

1. Medallion holders who are 65, have held an A-Card for 20 years or have completed the driving requirement for 10 years would no longer have a driving requirement. This would put them in the same situation that Pre-K medallion holders have now.
2. Medallion holder could retire by paying a flat monthly fee of no more than $500 a month. Part of the fee would be contributed to a driver's fund.
   

The SFCDA would appear to prefer the first possibility but would consider the second as part of a compromise with the SFMTA.

The "Drivers Investment Fund" would be created for the benefit of all drivers, not just medallion holders. It would be more like a stock or a bond than a pension plan and would help drivers to invest in their futures.

The details of the plan haven't been worked out but it would work "something like this."

• Each driver would contribute $5 per shift.
• This could come from a 25 cent drop increase on the meter.
• A percentage from the transfer of medallions could also be contributed to the fund.
• Retiring medallion holders might also contribute to the fund.
  
• A driver could cash out only after completing 5 years of the driving requirement within a 6 year period.
• Every driver would have an account and could cash out any time after completing their requirement.
• Once cashed out, a driver couldn't cash out again for another 5 years.

Korengold provided an estimate of how much retiring medallion holders might contribute to the fund if they paid $100 a month or $1,200 year per person into it. "Here’s an example of what retired medallion holders at this rate, would add to the fund:"

• 200 Retired MH = $1.2 million per year.
• 300 Retired MH = $1.8 million per year.
• 400 Retired MH = $2.4 million per year.

The main thrust of both the SFCDA plans would be to help provide security for medallion holders and regular drivers alike.

Town Hall Meetings: the MHA Plan

Yesterday medallion holder Michael Ferguson, Pre-K medallion holder Patrick Shannon and MHA president Carl Macmurdo (picture) presented their ideas for taxi reform.

I was unable to catch Mr. Ferguson's talk but I was told by a reliable source who wishes to remain anonymous and not be quoted that this plan focused on solving the MTA's financial problems by imposing a small tax on all city businesses instead of a gargantuan $10 million tax on us.

I can only second this idea and add that I think that a 50% tax against the salaries of the MTA staff would go a long way toward helping to cover Muni driver's overtime income. In fact, it would go a long way toward eliminating the overtime as well as serving as a strong motivation to bust bloated union contracts.

Except for showing an appalling ignorance of business ethics in China, Patrick Shannon gave a stirring and interesting speech. His misinformation would have been of no importance except that he used it to draw a false analogy between China's economic miracle and the honesty of their business culture. Actually, if The Cheating of America is a best seller in China, it's probably because Chinese businesspeople think it's a how-to manual.

But I digress.

Actually Shannon presented some great ideas. He wants San Francisco to build up a world class fleet of green, energy saving taxis. He thinks that the current medallion system, especially the gate and gas system, prevents this from happening.

What he would like to see are employee owned companies (ESOPS) or real co-ops competing with each other to improve the business. He thinks that if profits are tied to performance and the wealth is spread to the drivers the service would improve and the industry would flourish.

I've always liked these kinds of ideas and I think that, if something like this was actually put into effect, it would probably work pretty much like Mr. Shannon thinks it would. There is only one problem with it - I don't think the powers that be would go for it.

Although I've had a little fun with him in my photo, Carl Macmurdo gave the most serious speech of the three. By "serious" I mean that parts of it might actually end up in Deputy Director Hayashi's presentation to the MTA board.

What Mr. Macmurdo presented was a fixed-price taxi medallion proposal. I don't have space to go into the plan in too much detail here but you can probably find it online at the MHA website http://www.medallionholders.com/. Some highlights are:

• It would allow for the sale of all current and future medallions
• It would give drivers on the waiting list right of first refusal by position.
• The fixed price would be set at $280,000.
• A down-payment assistance program would help buyers that would be funded from the money created by a transfer tax.
• The transfer tax would be 5%.
• After two years - or after 500 permits have been transfered by medallion holders to waiting list applicants - whichever occurs last, medallions will be transfered by periodic auctions.

Carl said that the specific numbers were flexible. The fixed price, for instance, might set at $200,000 instead of $280,000 and 1,000 permits might be transfered to people on the list before the auction system takes over.

Mr. Macmurdo says that, while he doesn't personally like the idea of auctions, he thinks that they are inevitable.

The mere fact that the MHA is now in favor of a fixed price system is probably more important than any specific detail. For the last five years, the semi-official position of the MHA has been one of transferability by open auction.

This move shows flexibility on the part of Carl and his organization. It shows a willingness to do one of the hardest things in the world - re-examine one's own ideas. It shows a willingness and desire to move toward the unity and consensus that is the only real hope for the Taxi industry.

Re-reading this piece, I can't but notice that a little weirdness and a tendency toward irrelevance has crept into my post. I need a vacation from all these meetings. Fortunately, mine starts tomorrow.

The UTW's Nov'09 Flyer

At a time when almost everyone in the taxi industry is trying to work out a reasonable compromise reform plan, when even the arch-demon of open auction transferability Mike Spain is talking consensus, the UTW has chosen another route - an hysterical propaganda attack on the Town Hall process.

Almost everything in this flyer is false. Let me count the ways:

1. You can't save Prop. K. It's dead. It's past. The war is over and the people in favor of preserving K (including myself) have lost.
2. The Town Hall meetings are about how to create the future.
3. As of yet, there is no plan to sell medallions. There is no plan of any kind. The plan hasn't been worked out yet. That's what the Town Hall meeting are for.
4. However, people attending the meeting have been moving toward a consensus plan that would include:

• Maintaining the waiting list.
• Giving drivers on the list the right to choose between getting a medallion without charge as they are now or buying a medallion for a fixed price.
• A retirement plan for medallion holders.
• Building a retirement fund for all drivers - most likely from the sale of the medallions.

The plan has yet to be fully worked out but, because it's being attacked, I want to go into the fixed price idea in some detail:

• The whole idea of a fixed price auction is to make the medallions AFFORDABLE for the drivers on the list.
• It is a compromise based on the idea that most drivers would not be able to compete in an open auction.
• There has been talk of a $200,000 selling price but this would be discounted 10% so that the buying price for those on the list would be $180,000. These drivers would later be able to sell their medallions for $200,000.
• One thing that proponents of the plan have insisted on is that there should be NO DOWN PAYMENT REQUIRED to purchase a medallion.
• The idea that a driver would lose a medallion for missing one or two payments is a RIDICULOUS LIE. Nobody but the mob lends money with that strict a pay-back policy.
• In fact, no financial institution has yet provided any information on loans to cab drivers. The BOGUS STATEMENTS in the flyer are strictly UTW FANTASIES.
• Deputy Director of Taxi Chris Hayashi will soon be taking bids from credit unions to find the best possible terms for loans to drivers.
• No selling price will be settled on unless a working medallion holders can afford to make the payments.

Of course the devil is in the details and what the final plan will look like will depend upon what people decide at the Town Hall meetings. And more non-medallion holders should be there. But they should coming to express their ideas and points of view, not to protest against a plan that doesn't exist.

You know, I can accept other people's points of view. Certainly the UTW's concern for the people on the waiting list is legitimate and their longing for the security of Prop K is something I can identify with.

One thing I can't abide, however, is intellectually dishonestly. There has been at least one UTW member at every Town Hall meeting that I've attended. Therefore there is no excuse for the distortions and scare tactics contained in that flyer. It's a new low point in the taxi reform debate.

But if it brings more non-medallion drivers to the Town Hall meetings, it could turn into a good thing. It could give more people a chance to find the truth about what is happening ... and add their two cents to the process.

The SFCDA Meeting: Chris Hayashi Strikes Again

The indefatigable Deputy Director of Taxis, Chris Hayashi, took a break from washing her car and turned up to speak at the SFCDA meeting on Wednesday.

Many of the drivers had not attended Town Hall meetings so the session was largely a matter of bringing people up to date.

A few of the non-medallion holding drivers expressed fear of retaliation from the companies if they spoke openly at public meetings. One large mouthed medallion holder claimed that the companies would be afraid to mess with a driver once he or she became publicly known. Nonetheless, many of the drivers at this meeting clearly did not want to be photographed.

Many of the drivers also did not want to see any changes in Prop. K and there was a lively debate with many points of view expressed. As of yet, the SFCDA has not come up with a working position on taxicab reform. It is still a work in progress.

Ms. Hayashi fielded comments and questions for two and a half hours. The discussion was multi-faceted and open-ended. Among other things, many drivers became convinced that they should be attending the Town Hall meetings.

The MHA's Annual Meeting: Kim and Gonzales

Matt Gonzales and Hansu Kim of the Taxicab Coalition also spoke at the MHA meeting last Monday.

They spoke for about 45 minutes, mostly about various aspects of taxi reform. They both pointed that this wasn't a simple problem and Gonzales warned against being too eager to form a consensus - if it was to back the wrong policies. He added that it was sometimes difficult to tell what effect a proposed change like adding prime time taxis might actually have on the business. In the end, they agreed that the right kind of consensus and unity was necessary.

They favor open auctions but may be willing settle for a fixed price transferability system. This is big change in their previous position and a definite step toward the unity that they mentioned.

Kim was concerned about the MTA's wanting $10 million from us (and rightly so) but Gonzales later said that the $10 million might also open up an opportunity to change Prop K for the benefit of the medallion holders and other drivers.

It was a long talk and they covered many aspects of this plan that is too detailed to go into here. There was, however, one thing aspect of their talk that I have definite bone of contention with.

Kim appeared to say that he's in favor of maintaining The List and not maintaining The List at the same time. When I mentioned this to him the next day he said that it wasn't an either or proposition and implied that it was possible to keep The List in some situations and not in others.

Really? I think I'd need more details on that idea.

What bothered me in his speech was what I took to be a back-door attack on both the drivers on the waiting and the drivers who already had their medallions.

Hansu started out by claiming to support those on the waiting list and said that the majority of medallion holders had gotten their medallions honesty. This took about 15 seconds.

Kim then spend the next 7 or 8 minutes attacking people who he claimed had gotten their medallions illegally. He gave very little actual evidence that this was true. For instance:

• He said "We all know" drivers who have gotten their medallions dishonestly. "We all know?" Well - I don't know anybody like that or at least I don't know that I know them.
• He then brought up one example of a former deputy sheriff who used obviously phony waybills to get a medallion. As an ex-philosophy student, Mr. Kim should know that this is a major No-No. It's the logical error of generalizing from the particular. Because one person does something illegally, it does not mean that anyone else in a group did. It's also hared to find any human activity that someone hasn't cheated on.
• Hansu went on to say that before Daly/Ma "we" really had no way of knowing if people on the list were honest of not. But he would not have brought the subject up unless he wanted us to think - "not honest."
• Than Kim went way overboard and, throwing all pretenses to logic and rules of evidence aside, said that before Daly/Ma "it was possible" for a driver to pretend to work and not do so. "It was possible?" Can't you just imagine Kim as a prosecuting attorney telling a jury, "it was possible for Mr. X to murder the butler in the tea room. Therefore he's guilty."

If Hansu is really in favor of keeping the waiting list, it's hard to see why he spent so much time attacking it in this (for me) bogus manner. Intentionally or not, he often used words in an imprecise and misleading way.

For instance, Kim went on to say that he wanted to get medallion into the hands of "real working drivers" and the only way to do that of course was by holding auctions open to all "working drivers."

From the context of his talk it sounded to me as if he was implying that people on the list were not "real working drivers."

This brings up a problem that Kim didn't go into: how do you tell who "a real working driver" is? All the arguments that Hansu used against "possibly" unworthy medallion holders and "possible" cheats on The List could be doubled and tripled for drivers not on the list:

• Unless a driver is on The List, he or she doesn't have to keep records.
• Without waybills, how would you know if somebody has ever even driven a cab at all?

One reason that the waiting list was developed in the first place was precisely to be able to tell who was or was not a "real working driver" qualified to own a medallion. It was also a way to reward people for years of service and insure that experienced drivers stayed on the job.

It hasn't been a perfect solution. Nothing done by humans is. A few people have been left off this list who should be on it. A few people have gotten medallions who shouldn't have.

Hansu apparently wants to help drivers who have worked hard and didn't put their names on The List for one reason or anther to get medallions. Fine. He also wants to help younger drivers enter the business. Also fine - as long as it's not at the expense drivers who have been working and waiting for medallions for 15 years.

But I don't see how these constant attacks on medallion holders and people on the list are in any way shape or form productive or conducive to bringing unity to this business. If he does know people who cheated, he can turn them over to Chris Hayashi. She'll cleanse them for us.

Otherwise, I'm sick and tired of having to defend myself against what I might "possibly" not have done before Daly/Ma when I was working 2,400 hours year but don't have the waybills to prove it.

If Mr. Kim really wants to bring unity, he should be concentrating on how to improve The List now instead of harping about a small minority that broke the rules in the past.

THE MHA's Annual Meeting: Hayashi's Talk

The MHA held its annual meeting last night highlighted by talks by Chris Hayashi (picture), Hansu Kim and Matt Gonzales. Dan Hinds also showed up but had to leave before he was able to deliver his scheduled speech.

Deputy Director of Taxis Hayashi covered much the same ground as she has in her Town Hall meetings so I won't go into the them here. Many of the drivers had not attended the meetings so her talk turned into a catch up session for them.

Ms. Hayashi did emphasize that, despite all the rumors flying about, the Newsom/Heinicke plans to confiscate medallions are dead.

On the other hand, Hayashi said that Proposition K would have to be changed because of the lack of an exit strategy and that it was up drivers to come up with a plan that most people in the cab industry could get behind. She encouraged drivers to either make presentations at the Town Hall meetings or send their plans and comments to her.

She said that she would formulate a reform plan taken from the various driver plans and the work done at the Town Hall meetings and present it to the MTA. The MTA would hold open hearings on the plan and, if they was no massive opposition, the plan would go into effect soon afterwards.

Director Hayashi set a target date of February 1, 2010 for wrapping up the whole process.

Medallion holders talked to her on many topics after her speech. One main theme that kept cropping up was the thought (expressed passionately by many) that the MTA had no right to extort $10 million from cab drivers. Ms Hayashi as is her custom told them that she did have the legal right to do so.

One driver said that, while she might have the legal right to steal our money, she did not have the moral right - a thought seconded by this blogger.

Another theme popular with the drivers was the idea of unity. Many drivers who asked questions of (or made comments to) Ms Hayashi as well as Hansu Kim and Matt Gonzales said that San Francisco's cab drivers had to come up with a plan that drivers from all factions could all get behind - another thought seconded by this blogger.

Chris Hayashi can be reached at:

Christiane Hayashi

Deputy Director of Taxis

San Francisco Municipal Transportation Agency

1 South Van Ness, San Francisco, CA 94103

(415) 701-5235

Town Hall Meetings: Extremes - UTW

I'm going to start talking about plans by looking at the people least likely to compromise and work toward a consensus.

Mark Gruberg (picture) of the UTW thinks that Proposition K should not be changed. All drivers should be put on The List for a medallion by seniority and, when the medallion holder can no longer drive, he or she should give up the medallion without compensation.

Instead, a retirement plan for all drivers should be funded by charging medallion holders $300 per month. A previous plan of Gruberg's called for financing medical care for cab drivers by charging medallion holders $1,000 a month. Perhaps Gurberg's greatest triumph has been a successful ADA suit which would take medallions away from people too old or sick to drive a cab. The decision is being challenged at a higher court.

There is no doubt that Mark sincerely wants to help the average driver but it has long seemed to me that he is so fixated by his animosity toward medallion holders that it's addled his judgement. Certainly, many of his ideas and actions are illogical.

• He claims that he wants to help the average driver get a medallion.
• Yet the moment they get the medallion Gruberg wants to take away 15% to 50% of their income and control almost every move they make.
• He claims to be working for the benefit of all drivers, yet he has fought tooth and nail to take any sense of security away from medallion holding drivers as they get older.

He's so fixated on punishing medallion holders that he doesn't even consider other ways to raise money for driver retirement.

Every third or fourth Town Hall meeting, Gruberg gives a speech about how nobody is mentioning "the elephant in the room" which according to him is the "fact" that the medallion holders, who have spent 15 years working and following rules, have gotten their medallions for "free."

Mark can't see why these medallion holders should gain anything from taxi industry reform. Instead, they should be made pay for the benefits of everyone else.

The companies have far more money than the medallion holders and engage in various illegal practices, including extorting $8 million to $10 million a year in tips from the drivers Gruberg claims to represent. But he doesn't even mention the companies as a possible source of income for his schemes.

The fact that some of these companies are run by people who have inherited their medallions and/or positions doesn't faze him either. Apparently it's okay to get something for "free" as long as you don't spend 15 years working for it.

Some of Gruberg's actions would take (or already have taken) money away from the non-medallion drivers:

• In 2004 or 2005, the UTW stopped a meter increase from going through so that they could file a suit for back gates thus costing working drivers thousands of dollars.
• His latest idea is that medallion holders should drive a minimum of 1500 hours per year which would mean that there would be fewer good shifts available for regular drivers.

Gruberg keeps pointing to the same imaginary elephant over and over again and doesn't seem willing to compromise at all. If anything, as the Town Hall meeting progress, he appears more and more and more fixated on shafting medallion holders.

It would be interesting to see if Mark would back a plan that would help the average driver if it didn't somehow stick it to the medallion holders as well. Would "win-win" win with him?

Town Hall Meetings: Mission Statement

Deputy Director of Taxis, Chris Hayashi, perhaps appropriately dressed as Uma Thurmand in Kill Bill for the Halloween Town Hall Meeting, looks at the Taxi Mission Statement.

The outfit may have been inspired by Ms. Hayashi's tongue-in-cheek threat at an earlier meeting "to bring a gun" to keep the unruly, arguing cab drivers in line. The outfit and her sword seemed to do the trick last Friday.

The Mission Statement so far is the only concrete accomplishment of the thirty or so hours that the deputy director and taxi people have spent analyzing and haggling over the various plans designed to reform the cab industry.

Not that we've been twiddling our thumbs. Many plans, ideas and options have been discussed at the Town Hall meetings and the Mission Statement has given us a format to use as a basis for negotiating various points of view.

Before going into what the Mission Statement is, in light of various rumors floating around, I think it's necessary to say what the Mission Statement is not. It's not a plan. It's an approach to a plan - a listing of the problems that need to be solved and goals that need to be attained.

• There is not, for instance, a plan in effect to take medallions away from medallion holders.
• Nor is there a plan to put the medallions up for sale at an auction.
• The plan should be developed over the next few weeks.

The problems to be solved and the goals to be attained are:

1. ENTRY - Who gets a medallion and how.
2. EXIT - (Retirement for drivers and medallion holders) and/or (Sale of medallions).
3. CITY REVENUE - Deputy Director Hayashi keeps insisting in the face of all moral and ethical standards that the MTA has the right to extort $10 million from the taxi industry.
4. BUSINESS STABILITY - Whatever plan we come up must keep the companies flush.
5. RELIABLE SERVICE - For a good price. How do we improve service in the neighborhoods.
6. DRIVER QUALITY OF LIFE - How to improve the security and money for all drivers.
7. REPRESENTATION - How to get the representation at city government that we are lacking now.

The ultimate goal is of these meeting is to come up with a "consensus" plan that will be acceptable to a majority of the people in the industry. If we don't, Mayor Newsom and Malcolm Heinicke will more than likely come up with a plan for us.

In other words, our only chance is to develop a unified position and stick together.

Details of the plans and the characters who hold them starting tomorrow.