Sunday, October 25, 2009

Another Town Hall Meeting

This list is the end result of 3 hours spend searching and haggling during the Town Hall Meeting on Friday, October 23, 2009.

The idea was to define what we need to solve our problems in order to come up with an agreement that everyone can embrace.

This is what we have so far.

The hard-liners are staying hard. The middle however is expanding and the edges are soft.

I don't know what that means either.

Conflicts have been reduced. I was only in three arguments on Friday - a definite improvement. But tell that to Charles Rathbone who sat 3 feet away from my gargantuan mouth.

The rest is silence.

More details on Monday after 6 more hours of settlement negotiation. We're looking desperately for that elusive "yes."

We won't take "no" for an answer.

Monday, October 19, 2009

Chris Hayashi's New New Plan

Used to be that bureaucrats were predictably dull and boring. You could go to a meeting, take a seat and sleep behind a person with a weight challenge knowing that you wouldn't miss a thing.

Then along came Christiane Hayashi. Not satisfied with the new plan she presented on Friday, the Deputy Director came on yet another, more radical, one on Monday.

Did I say radical? In the long history of labor conflicts, there be may nothing quite like this.

What Ms Hayashi wants to do is negotiate an agreement between all the interested groups that would give something to everybody in such a way that what is taken away magically balances out. If that doesn't make any sense, it's because I don't fully understand everything that she is trying to do.

It'll take hours of discussion to begin to work this plan out. For the moment, all I can try to do is give you some highlights.

What Ms Hayashi proposes (if I understand this correctly) is a structured settlement agreement between the city and all other parties with a "recognized interest" in the taxi business to do the following things:
  1. Suspend the lawsuits regarding the ADA and the Gates thus feeing up money that would be spent on legal fees by the city, the MHA, the UTW and others.
  2. Raise $18 million for the City of San Francisco by selling 100 cabs to drivers on the list for $180,000 a piece.
  3. Give another 100 cabs to people on The List without charge.
  4. Qualified (10 years of driving + age 65) medallion holding drivers would be allowed to retire for the next three years. This retirement would be guaranteed regardless of whether the settlement continued or not.
  5. There would be no permit fees for anybody during the next three years.
  6. A driver's fund would be set up for non-medallion drivers.
There were also other features that would be traded in a Quid Pro Quo manner, such as:
  • Taxi companies would be allowed to pass their credit card charges on to the drivers.
  • But the drivers would pay the corporate rate of 2.5%
  • In return, the Companies would reduce the Gates 5%.
  • Drivers on The List would have the choice of buying a medallion or taking one for no charge.
  • It was assumed that most of them near the top would take pass on the buy option.
  • But, at a certain point, people down on The List would opt to buy and could thus jump the people ahead of them. It was unclear whether there would be a fee charged for this or not.
  • It was also unclear as to what guarantees the drivers buying the medallions would have that they would get their money back.
Many other points were also not clarified but we'll be discussing this plan for at least the next couple of weeks. Things should become clearer and clearer as we go along - or not?

Over the three year period $18 million would be dived thusly:
  • $6 million would go to the MTA for no apparent reason.
  • $6 million would go to the SFPD for enforcement of laws against phony taxis, illegal limos and other things.
  • $6 million would go to the Taxi department to pay for staff, materials, driver training, etc etc.
The settlement would be binding as a legal contract, would last for three years and the signees would include:
  • MTA
  • Police
  • Credit unions
  • Taxicab companies
  • Color schemes
  • Litigants in related lawsuits
  • MHA
  • UTW
  • Taxi coalition
It would also include a Memorandum of Understanding (MOU) between different departments with the city, including:
  • SFPD
  • Treasurer
  • Department of Human Resources
  • DA
A Request for Information (RFI) on rates of loaning money from credit companies would also be necessary in order to help finance the medallion purchases.

At the end of the three year period, the agreement could be renewed, modified or dumped.

There were a lot of questions asked and scenarios worked out. Most of the people were very interested. Some, including myself, were enthusiastic. The usual hardcore suspects, however, remained hardcore.

Mark Guberg of the UTW thought the plan too complicated and instead wanted to continue his vendetta against medallion holders by making these worthless freeloaders pay for the retirement of all drivers.

Barry Korengold of the SFCDA didn't like the idea of selling cabs for a fixed price because the buyers would lose money on the interest. He was also afraid that this would open the floodgates for future auctions which would unfair to the average driver.

Hansu Kim, who only last week was telling me that he could accept fixed price sales and wanted to maintain The List, reverted to form by singing a lengthy praise to auctions and saying that drivers not on The List should have a right to bid too.

Michael Spain claimed that everyone would think like him in 20 years so we should do the inevitable and start auctions now.

Deputy Director Hayashi said that what the final plan would consist of would be what everybody would agree to in writing.

"What if everybody won't sign the agreement?" a man asked.

"That's not an option," she told him. "We'll keep having meeting until we have an agreement."

Does she intend to take a page from Robert Kennedy Jr. and lock us all in a room until we all sign a settlement?

Saturday, October 17, 2009

Chris Hayashi's New Plan

Deputy Director of Taxis Chris Hayashi had an epiphany the other night which led to a change of emphasis during the October 16th Town Hall meeting. Originally she had intended to discuss two separate plans: one offering medallions holders a chance to buy a retirement and the other offering the chance sell a medallion at a fixed rate.

Ms Hayashi's revelation was that the two ideas could be combined into one. She only saw the broad strokes in her vision so the details have yet to be worked out. However, the outline goes something like this:
  • Medallion holders could opt for either retirement or sale.
  • The List would be maintained and drivers on it apparently would have a choice between getting the medallion by paying for it or not.
  • The City would take fees of at least $10 million for brokering the deal because they are giving us public access to the streets ... or something.
  • Some of these fees would go back to the taxi industry in the form of enforcement against illegal taxis and limos as well benefits for the non-medallion drivers.
It's hard to see how some of this would work but the genius is always in the details and we won't begin to see those until Monday.

I think the idea was generally greeted with enthusiasm - especially by those of us who thought that the twain could never meet between the plans; and that the people favoring one side or the other could never reach an agreement.

There was hostility loudly expressed against the high percentage of the fees (ranging from 20% to 50%) that the MTA wants to charge the taxi industry for putting Deputy Director Hayashi's plan (or any other plan) into effect, mostly by medallion holder Jim Templeton and myself. Jim argued that it was absurd for us to be contributing to the salaries of MTA personnel who make more than twice as much money as we do. I concentrated my attack on the fact that we would be hit by much higher taxes than anyone else pays.

I'm afraid that we both of got a little carried away. Jim had the good grace to apologize for his outburst but I did not. I should have. My Irish temper had the best of me. My animosity was (or should have been) directed at the idea not the person. Let me apologize now.

In any case, our complaints had no effect. Ms Hayashi told us that we should talk to an attorney. Her legal opinion is that the MTA has the right impose any fees that they wish.

She saved the best news for last. She told us that the plan that wouldn't die is finally dead.

"I tried to get one of you to say something good about the plan but couldn't," she told us.

She deflected all attempts to get details about this radical change of direction with a series of impish "yes" and "no" answers to all queries on the subject. In the shadowy Byzantine world of the MTA, the force apparently is finally with Deputy Director Hayashi.

The people in the taxi industry are apparently to be given the chance to decide their own destinies.

Let's hope the wind stays at her back.

Wednesday, October 14, 2009

The Plan That Wouldn't die?

Despite unanimous loathing from cab drivers and company managers, Mayor Gavin Newsom's plan to rip-off San Francisco's taxicab industry remained the centerpiece at the Town Hall Meeting on October 9, 2009. Deputy Director of Taxis Chris Hayashi led the discussion with the aim of "adding to or improving" the scheme.

This gave taxi industry insiders a chance to see how dysfunctional the scam (which was adapted from MTA Director Malcolm Henicke's Charter Amendment plan in 2007) really is.

Unable to "get it," at one point I asked Ms. Hayashi to draw a visual representation. Jane Bolig, the manager of Desoto Cab, quipped that it would "look like Berlin after World War II." Medallion holder Mike Spain thought that the plan was drawn up by a grad student. Certainly it appeared to be dreamed up by somebody who knew little about business and less about taxicabs.

The great physicist Richard Feyman once said that the best solution to a problem is usually the simplest. Instead Newsom/Heinicke take a complicated problem and convolute it.

The taxi system as it is now.

There are three different categories of medallions.
  1. There are about 300 Pre K individual medallions.
  2. There are 96 Pre K corporate medallions.
  3. There are 1,100 Post K medallions
The medallions are not for sale.
  • They are given out to working drivers on a waiting list on a first come first serve basis.
  • The list is currently about 3,000 drivers long.
  • Holders of the medallions are required to work a minimum of 800 hours per year.
The major problem with the system is that there is "no exit strategy." Since they cannot sell the medallions and there is no retirement program in the industry, medallions holders tend keep the medallions until they die. This forces many of them to keep driving long after they want to, or should. Others pretend to drive and don't.

The upshot of this is that it takes a long time for drivers to gain a medallion. I've had mine for four years, for example, and it took me a dozen years to get it. While I personally don't think that this was an unreasonable amount of time to wait to own a piece of a business, there were only 1,000 people on The List when I signed up. The List is much longer now.

Heinicke's solution to this problem is to create yet another class of medallions called M medallions. These would consist of:
  • All newly issued medallions.
  • Pre K medallions that go back to the city as the holders die off.
  • Corporate Pre K and Post K medallions that would return (through a convoluted route) to the city after all their holders passed.
Did I say convoluted?
  • The corporate Pre K medallions would first be transfered to a living person who was a shareholder of said corporation as of July 1, 2009. Only when he or she died off would the medallion become an M.
  • Post K medallions, on the other hand, who continue to be given out to people on The List but The List would be capped at around 3,000.
  • Current Post K medallion holders would be allowed to retire and their medallions would become M medallions.
  • The 3,000 New Post K medallion holders would not be allowed to retire thus keeping the current system with all its problems alive. As they eventually bit the dust, the New Post K medallions would become M medallions.
  • In short, all the medallions would eventually become M medallions but the process would take 40 or 50 years.
The plan is actually more complicated than that but the less you know the better. Trust me on this.

The M medallions would be leased to taxi companies not to drivers. The companies would bid against each other at periodic auctions. Heinicke expects the companies to bid about $3,000 for each medallion. This would set up an interesting scenario. For 40 or 50 years there would be two types of medallions:
  • M medallions for which the companies would pay $3,000 per month.
  • All other medallions for which companies usually pay about $2,000 per month.
Why would companies that ordinarily pay $2,000 for a medallion suddenly pay $3,000? Good question. I haven't the foggiest.

Numerous taxi company management types were at the Town Hall meeting and they generally agreed on the following:
  • Taxi companies could only afford to pay $3,000 if they cut back on services like the radio and only dealt with long term leases.
  • The larger companies would probably drive the smaller companies out of business by initially overbidding.
  • After they'd wiped out the small fry, they'd bid whatever they liked. Jane Bolig mentioned a dollar as a possible price.
  • Another possibility would be that the companies would collude to keep the bidding down. This seemed like a popular option with most managers.
In other words the Newsom/Heinicke plan doesn't even work on its own terms.

If I'm a little more acerbic than usual its because I've wasted six hours of my time taking apart two pieces of paper that should have been shredded a month ago. Everybody in this business has already told the MTA that the Heinicke plan won't work.

This is a not very ingenious ploy to separate us from our money. Under this con all the profits in the business would eventually go to the MTA. The medallion holders would be wiped out, the companies would be reduced to leasing agencies and the drivers would become a permanent underclass with no hope of ever improving their status.

I wonder when or if Newsom will realize that, in putting his trust in Heinicke, he's riding a dead horse.

Last Friday's Town Hall Meeting was attended by people who were experts on all aspects of the taxicab business. They were and are eager and ready to come up with a plan that would benefit the companies, the drivers and the public.

When is Mayor Gavin Newsom going to start listening to them?

Sunday, October 4, 2009

A Short History of San Francisco's Taxi Crisis: Bigoty & Cabbies, Part 2

When Mayor Newsom discovered that he was $600 million in debt, one of the first things he DID NOT DO was tell the people of San Francisco that he was going to cut back on their bus service. Instead he came out with his plan to "improve" taxi service by taking taxis away from cab drivers, auctioning them off and keeping the money for the city.

People in San Francisco take ten times more buses than cabs. In short, the issue was and is a red herring, a pump fake, a sound bite designed to take the public's mind away the fact that they are going to be waiting longer for buses.

Mayors from Dianne Feinstein on have used taxicabs for similar ploys, but Newsom is the first mayor to claim that he could improve taxi service by attacking San Francisco's cab drivers.

His justifications rest on a series of half truths coupled with assumptions that are essentially racist. But first - the facts, just the facts.

San Francisco has a unique cab system.
  • Taxi medallions are not for sale. They are leased to drivers on a first come first serve basis.
  • There is a waiting list to get a medallion that is currently 3,000 applicants long.
  • The wait for a medallion is about 15 years.
  • The medallion goes back to the city when a medallion holder either stops driving or dies.
Now some half truths followed by facts.

Half truth: Auctioning off cabs would give more taxi drivers a chance to own one.
  • Fact: Almost 1,400 out of 1,500 of San Francisco's taxicab medallions are owned by individual drivers. About 1 driver in 5 owns a medallion. In other words 90% of the taxis are owned by individual drivers. This is by far the highest percentage in the country.
  • Fact: In New York City by comparison, 5,525 out of 13,107 are owned by individual drivers. This works out to 42% of the medallions - less than half the percentage in San Francisco.
  • Fact: Johnny Marks of writes: "That % (the 42%) sounds a little high, what with the cost of the city license (medallion) presently going for $750,000.00 which does not include the cost of the cab itself."
  • Fact: According to the Asian Law Caucus only 1 driver in 20 can afford to buy a taxi in NYC.
  • Probability: Most of the cabs in NYC are actually owned by people financing the cab drivers, not the drivers themselves.
Half truth: According to Mayor Newsom's man at the MTA, Director Malcom Heinicke, taxi medallions are "essentially free."
  • Fact: The medallions are not dropped from the sky or won in a lottery.
  • Fact: A driver puts in an average of 15 years of hard labor to get the medallion and pays about $200,000 in rental fees. Therefore, the medallion is "earned" not free.
Half truth: Aging medallion holders are not working and because of this the service is bad.
  • Fact: About 20% of the medallion holders are indeed too old to drive. This does not, however, mean that the cabs are sitting idle. Ordinary drivers work the cabs when the medallion holder doesn't. Almost every cab in the fleet is in operation 20 hours a day, seven days a week.
Doublethink: According to Newsom, "If drivers had more of a stake in their industry ... that could translate into better service for the customers."
  • Opinion: I don't see how somebody would have "more of a stake" by getting a cab in an auction than working 15 years to own one.
  • Fact: If you own the medallion you own the medallion. It doesn't matter how you got it. The stake in the industry is the same.
There are subtexts to Newsom's arguments that basically racist. He's morphing the stereotypes formally associated with blacks. What's he's saying in other words is:
  • The service is bad because the drivers are lazy.
  • We're paying them too much money so they aren't working.
  • If we pay them less (put them in debt to pay for the auction price) they'll work harder.
Newsom has no idea if the cab service is good or not. (The average waiting time in front of his most famous restaurant, The Balboa Cafe, is about 15 seconds.) But Newsom does know that he can always gain political points by appealing to people's prejudices and bashing "cabbies."
  • The truth is that the medallion system has created a class of professional drivers. The promise of being able to own a medallion someday keeps experienced drivers in the business.
  • Fact: San Francisco has the most knowledgeable cab drivers in the USA.
  • Fact: Replacing San Francisco's veteran drivers with deep-pocket newbies would most certainly make the service much worse.
The idea that medallion holders aren't working because they make too much money is absurd.
  • At one public hearing, a woman claimed that medallion holders weren't working because they were home eating pizzas. Did she mean to say that they were home eating watermelons?
  • Facts: Medallion holders average about $45,000 per year. The average salary in San Francisco is $65,000. Medallion holders get paid $2,000 a month to lease out their cabs. Studio apartments start at $1,500 per month. Most cab drivers can't afford not to work.
According to a source who wishes to remain anonymous, Newsom came up with a plan when he was a city supervisor to solve the homeless problem by detoxing homeless people and having them drive taxicabs.

Newsom's callous disregard for the fate of the drivers is certainly consistent with this attitude. In his world, cab drivers are lowlifes and undesirables. They are not "one of us," not real San Franciscans. If the drivers are too old, you just take the cabs away and let them fend for themselves. If they waited 15 years and paid $200,000 in fees with the idea that they were going to own something at the end of it, that's their problem.

This is the way you treat a member of an underclass, not a fellow human being.

When these stupid, lazy cab drivers mounted a series of protests against his plan, Mayor Newsom had his man Heinicke take it off the table.

This was in March 2009. But that wasn't the end of the matter. Only the beginning.

Thursday, October 1, 2009

A Short History of San Francisco's Taxi Crisis: Bigoty & Cabbies, Part 1

An African American customer of mine was waxing sympathetic.

"I don't know how you do this job," he said, "I mean they're rude, they abuse you, they demean you ... it's almost like being black."

"Except," I said, "I don't have to drive the cab home."

But he had a point. The stereotype is almost exactly the same. Cab drivers supposedly are dumb, dishonest, lazy, dirty and smell bad. Although they're stupid, you have to watch them because they're clever and they'll cheat you if they can.

The cliché is also fed by the fact that many cab drivers are immigrants and minorities of various kind. Snobs who are way too PC to utter a racial or ethnic slur can still get their jollies by slandering "cabbies."

Of course labeling a class of people as inferior leads to more than mere insults. Inferior people are treated differently. If you want to complain about a bus driver, you call your local MTA. If you want to complain about about a cab driver, in most cities you call the police.

Far too many people would probably agree with the former Director of the San Francisco Taxi Commission, Heidi Machen, who wrote, "All of the ex-cons and alternative types who can't make it in another profession ... eventually wind up driving ... taxis."

At best, we're seen as a collection of foreigners and lowlifes.

Certainly San Francisco's "liberal" mayor, Gavin Newsom, was not thinking of cab drivers in February 2009 when he wrote, "Our job (during the recession) is ... to save San Franciscan's from losing their homes, losing their jobs and losing their small businesses."

On the contrary, Mayor Newsom intended to help fight San Francisco's budget deficit by taking the taxis away from San Francisco's cab drivers, selling them at auctions and keeping "most of the money..."

Newsom never mentioned the fact that his plan would cause most of San Francisco's 1,200 taxicab owners to lose their small businesses, their jobs and no doubt their homes.

"This city asset (taxis) has been underutilized and the (taxi) industry has underperformed," said the mayor who ran for election on a platform of balancing the budget. The city was $600 million in debt at the time he spoke.

And he talks about us underperforming?

That's the nice thing about spouting stereotypes. You don't have to worry about facts. If by "underutilized" the mayor means the taxi industry isn't paying its fair share, this is nonsense. The cab business actually pays millions of dollars per year in fees and taxes. Medallion holders alone pay $1.5 million per year in licensing fees.

If the mayor means (as he seems to imply) that he can solve San Francisco's deficit problems by selling cabs, he's dreaming. If he auctioned off all of the fleet's 1,500 taxis for $400,000 a piece, it would indeed cover his deficit. But (legal issues aside) who would buy the taxis in such a scenario?

Can you imagine the outcry that would take place if Newsom tried to pull a stunt like this in another industry? What if he decided to take over the city's trucking businesses? Or beauty salons? Or even massage parlors?

He would be condemned by the unions on one hand and civil libertarians on the other.

But cab drivers? Who cares? They're "underperfoming".

Mayor Newsom fought against a 1.395% business tax that could have raised millions of dollars for the people but would have hit his friends and himself.

Gavin Newsom apparently thinks that somebody has to sacrifice themselves for the good of the city but it's not going to be him or his cronies.

Let it be the cabbies.