Thursday, December 23, 2010

In Defense of Chris Hayashi

Director Christiane Hayashi is currently the object of an hysterical attack by cab driver Tariq Mehmood. From the way he's bellyaching you'd think she'd either turned racing to the airport into a capital offense or taken all the medallions and gave them to Malcolm Heinicke.

Her actual crime?  Long lines to get an A-card.

Let's put this into perspective.
  • Despite their length, the lines are moving quickly.
  • People talking about 3 minute lines at City Hall in the old days are delusional. For one thing there were 3 lines (One to do the paperwork and take the picture; one in another room to pay the fee; one back in the first room to pick up the A-card.) I waited many an hour at those lines in the old, old days. It was only in the last few years that they streamlined the process and speeded things up.
  • This is the first time that the MTA has done this and it's tough to get it right the first time out.
Should Hayashi have foreseen this problem and done things differently? I suppose.

If Cliff Lee had foreseen Edgar Rentaria mashing his pitch over the left field fence he probably would have thrown it differently and the Giants might still be waiting for the ring.

The important thing is that, unlike Lee, Hayashi has been able to correct her mistake.
  • Next year the deadline will come on drivers birthdays so there shouldn't be any lines at all.
  • The deadline has already been moved back to January 31st and, starting in January, the hours to get A-cards will be expanded.
The hours will be:

Monday, Tuesday, Wednesday and Thursday
9 am - 11:30 am and 2 pm - 4 pm

If people want to write letters to the MTA it should be to get them to release funds so Taxi Services can hire more staff.

It seems like a good time to remind everybody what Chris Hayashi has done for us. Without her:
  • There wouldn't be a Pilot Plan.
  • There wouldn't be a Driver's Fund.
  • The Waiting List would no longer exist.
  • Buyers wouldn't have the best loan terms in the nation.
  • There wouldn't be a Taxi Advisory Council.
I could go on and on. The job that the Director has done goes way above and beyond what anybody could have hoped for or imagined.

As for Mehmood's rant ... he hates Hayashi because she wisely didn't put him on the Taxi Advisory Council.

On New Year's Eve, my first toast will go to her in honor of her hard work and everything she's accomplished.

Friday, December 17, 2010

A - Card Renewal

The line was for A-card renewal extended about ten deep outside the MTA building last Wednesday when I took this photo.

The wait is part of the growing pains for Taxi Services as they bring everything relating to taxis under their wing; and is due to the fact that A-cards are only issued on Tuesdays, Wednesdays and Thursdays from 9am - 11:30 and from 2pm to 4pm.

At the last TAC meeting, Jarvis Murry of Taxi services said that Mondays would also become available for picking up the A-cards after the first of the year.

Director Christiane Hayashi, who wasn't happy with the situation either, said that Taxi Services would switch to a birthday based deadline for the A-cards next year. She also said that lines were moving quickly despite their length and that most people were being processed in an hour or less.

My own in-depth reporting on this issue found the average wait from a little less than one hour to two hours, depending upon the time of day.

The first issue of the A-cards also caused a problem with some drivers.

The cards included not only a photo but the driver's date of birth and drivers license number. One driver at the recent TAC meeting was very upset by this because he thought that it could easily lead to identity theft.

Mike Harris of Taxis Services said that the DOB has already been eliminated from the newer cards and the initial letter has been dropped from the driver's license number. He said that drivers who didn't like their cards could exchange them for the newer version.

However, it might be a good idea to wait until after January 31st.

Wednesday, December 15, 2010

A GPS Solution by Barry Korengold

In light of the current airport debate, I think it'd be helpful to revisit this proposal for a GPS solution that the SFCDA submitted to airport officials last May.  This will also give some insight into the ideas being considered at the time.  The "two line system" I refer to, was a proposal to have a separate "local" line and a long line. The drivers would choose which line to wait in, with 2 different curb spaces at the terminals.

I think it's time to reconsider this GPS solution.  A system such as this could have feasibly been in place by now.

Barry  Korengold

May 7, 2010

Airport Directors                                                                                                            
Landside Operations Management
San Francisco International Airport

Dear Sirs/Madam,

We’ve considered the various options proposed at the April 28th meeting, including our own proposal of a single line with a minimum $20 or $25 fare from the airport.  We’ve heard from many drivers on the subject, and although we think a $25 minimum would eliminate the angst of getting a “short” ride after waiting long periods, many drivers are afraid of losing too much business and if the minimum was lower, it wouldn’t be enough to make up for the wait.

The SFCDA’s board has concluded that some kind of “short” system is needed to make it worthwhile for cab drivers to spend the time necessary to have enough cabs available at busy times.

We feel there will be problems with a two line system. It would take up more curbspace, and tend to fall apart when it got busy, creating the need for a single line.  Many drivers who waited in the “long” line, would be forced to take local rides.  It would also be very subjective when the starters would start sending cabs from the long line to pick up from the local line.

The New York style system where the starters give the passengers tickets indicating they’re shorts, would be very cumbersome during busy times, requires lots of extra personnel and lends itself to corruption.

We spoke at length with John Wolpert, CEO of UpStart Mobile, a Best Buy spinout, and previously designed systems for IBM.  He feels GPS can be used to verify geographical “local” trips and prevent cheating of the system, but is not quite reliable enough to use for real time verification.  In other words, there are glitches and reasons the signal might be lost temporarily, but that the information could be “cached” and recovered at a later time to help keep drivers honest.

So here’s what we came up with:

Clear geographical parameters would be set for trips considered “local”.  These parameters are subject to discussion, but we suggest Cezar Chavez to the north, Mission street to the west, Daly City, South City, Skyline Blvd, San Mateo, Foster City.  These are all trips of $25 or less.

For efficiency and to avoid backups, only cabs with short or “local” rides would pass by the exit gate.  A sensor would establish what cab was at the gate, the driver would swipe their card and the system would match the driver with the vehicle.  When the driver comes back and goes through the “local” line, he/she swipes his (or her) card as they do now before entering the main lot, and there’d be a record that they went through the local line.

If a driver tried to cheat the system, nothing would happen that shift, but the GPS information would show they went further than the established boundaries or that they turned off their GPS, the computer program would automatically flag these trips and they would later be blocked from the airport for a significant period of time.

If the penalty was stiff enough, drivers wouldn’t try to beat this system.  There should be a slight buffer zone however, so that if a passenger is going just a few blocks beyond the boundaries the driver won’t get penalized.  This could be programmed so that the actual “red flag” zone was a bit beyond the established boundaries.  Egregious violators would be easy to identify and less serious breaches could be admonished on the first violation.

Wolpert feels such a system would be relatively easy and inexpensive to implement, and could reasonably be in place sometime between September and the beginning of the year.

We like this system because it preserves the safety net of the short line, and also prevents corruption on the part of drivers or starters.  It’s not a huge change in procedure, and allows for further testing of a more complete and real time GPS system.

Although problems have been identified with the current time based short system, we don’t feel it’s as bad as portrayed in the media or that there’s an urgent need to get rid of it immediately.  The SF Weekly article was a staged event, with the driver purposely driving crazy fast to make his point.  We feel most experienced cabdrivers are safe and courteous and we should stick with this system until this GPS backed system is in place.

Thank you for considering our ideas, and we urge you to go with this plan.

Barry Korengold
President, San Francisco Cab Drivers Association

Monday, December 13, 2010

A Green Christmas

I was surprised by an e-vite from manager Athan Rebellos to attend Green Cab's Christmas party at the Sierra Bowl in Daly City. I mean, the company is owned by Mark Gruberg and is a bastion of UTW drivers.

Since I've bad-mouthed the organization and its leader more than once, I wondered if they intended to throw bowling balls at me. On the other hand, no other taxi company has ever invited me to a Christmas Party - I have my medallion with Luxor and I don't even know if they have a Christmas party - so I went.

Athan told me that he'd invited me so that I'd write the event up in my blog but that I couldn't tell anybody his bowling score. It seemed like a fair exchange for free pizza and conviviality. 

Green Cab is a very interesting company and the drivers I talked with were enthusiastic about working there.

Green Cab is unique in this city for being a democracy. Athan was elected to his position as manager and has to be re-elected every year. This creates a very different atmosphere from that of most companies where the management style appears to have been copied from the Gestapo.

"I didn't know what to do when I first came over here," a medallion holder told me, "Athan was friendly and actually wanted to hear my ideas ... I could probably make more money somewhere else but it's so enjoyable working here that I'm not going to change."

The type of party itself was democratically chosen. The drivers voted on what they should do for a Xmas party and the majority wanted to go bowling.

I had a good time, enjoyed the pizza, met some very nice people and ran into other people I don't see very often. It was especially nice to talk with Rua Graffis who was a political ally and a pal back when I first started driving 27 year ago.

In keeping with my promise to Athan, I can only say that his score was less than 300 but more than 93.

Wednesday, December 8, 2010

Airport Commission Nixes Airport Plan

President of the San Francisco Airport Commission, Larry Mazzola, sent the Airport's plan to end shorts back to the drawing board after listening to airport and MTA spokesmen as well as seventeen members of the public.

Tyg McCoy, Deputy Airport Director, presented the plan saying that the airport had worked together with a committee of twelve people from all aspects of the taxi industry to formulate the plan which would pay cab drivers a minimum of $17 for all rides, pass $3 of the $4 airport fee back to the drivers, and eliminate shorts. He said that, although there were numerous ideas floated during the committee meetings, the "vast majority" of the drivers were behind the SFO plan.

Linda S. Crayton, Vice President of Airport Commission, asked him if he'd done a survey of the taxi drivers. He said that he hadn't but felt confident that the plan had a broad consensus in its favor.

Then, during public comment, all 17 of the  speakers trashed the plan. Medallion holder and advertising star Brad Newsham, even threatened to lead a strike against the SFO on February 5, 2010 if the plan went into effect on February 1st.

The opposition to the plan was not a case of one group organizing a protest but rather a true consensus of the real "vast majority" of the industry. Speakers against the airport's plan included: members of the United Taxicab Workers, the San Francisco Cab Drivers Association and the Medallion Holders Association as well as Marty Smith, who is a manager at Luxor Cab, and myself.

Among the reasons given for attacking the plan were:
  • It would drastically reduce driver income.
  • It would stop many drivers from working the airport.
  • It would thus hurt service to the public.
  • It would not stop cab drivers from racing.
President Mazzola, reading the writing on the wall, ended public comment after one hour and instructed McCoy (and presumably us) to come back with a plan that actually had the support of the drivers.

Even Javis Murray of the MTA, who spoke in favor of the plan, told me after the meeting that he and the MTA backed the plan primarily because it would end "time-based shorts." He added that he would back any plan that would stop dangerous driving on the part of cab drivers.

Both Barry Korengold of the SFCDA and medallion holder Murai, who were on the Airport Committee, told me that that the Airport's presentation was misleading.

It sounded, for instance, as if the plan called for a minimum of $17 plus a $3 charge back on the $4 airport fee which would equal $16 (17+3-4) to the driver.

Actually, the plan calls for the $17 figure to include the $3 charge back, meaning that the drivers would only get $13 (17-4). ($13 an hour is approximately how much is costs a cab driver to operate a taxi.)

The SFO also plans to move airport shuttles down to the same level as the cabs thus putting them in direct competition with the taxis. This wasn't mentioned during the presentation and is vehemently opposed by cab drivers.

Most of the people I talked with who attended the Airport Committee meetings felt that (with the exception of McCoy) SFO spokesman negotiated in bad faith and used the committee to create the illusion of a consensus. SFO officials pretended to listen to the drivers and then went ahead with basically the same plan that they started with in the first place.

Korengold and Murai also pointed out the Airport Committee had voted overwhelmingly to support a distance-based short system like they have in New York City - only to have the SFO shoot it down without further discussion.

Monday, December 6, 2010

Airport's Plan to Shaft Cab Drivers

The Airport Commission is going to vote tomorrow on a plan to eliminate shorts. Instead they will have a $14 minimum and allow a $3 charge back for the $4 airport fee.

Since I don't play the airport I'm going to link you with John Han's blog The San Francisco Taxi Industry Advocacy Jounal.

Personally I think the best option would be the New York plan where a starter checks with the cab to find out where the driver is going then gives a short ticket for certain areas. There would be no time limit so there be no reason to race.

If you don't like the plan, I think tomorrow is the last chance to protest.

Tuesday, November 16, 2010

MHA 2010 Meeting

The Medallion Holders Association held its annual meeting Monday at the Mars Bar and Cafe.

A nice buffet which included hot wings, hors d'oeuvres and delicious hamburgers seemed to be enjoyed by just about everybody. Board member Mike Spain briefly summarized his plan for peak-time medallions and President Carl Macmurdo discussed various subjects and strategies important to the members. But the highlight of the evening was an appearance by Deputy Director of Taxi Services Christiane Hayashi.

Showing her usual charm and charisma, the director fielded questions and used them as a springboard to express her thinking on various topics. Not necessarily in order, these included:

The Fixed Price for Selling Medallions.

Hayashi said that she liked the fixed price because:
  • It's unique to San Francisco and other cities have shown an interest in it.
  • The price is low enough to be affordable for drivers. 
  • It thus allows buyers to get reasonable loan options.
She pointed that in New York, where medallions often sell for $500,000 or more, only high interest loans with balloon payments are available and that buyers rarely succeed in paying off their loans.

One medallion holder said that the $150,000 that a holder would clear by selling the medallion would not be enough to retire on.

Ms. Hayashi responded by saying that the medallion sales were never intended to be a retirement but rather a way to help people retire in conjunction with other savings.

She added that she didn't expect the Fixed Price to go over $300,000. Otherwise medallions would no longer remain affordable for working drivers.

Peak-Time Medallions

After hearing plans about peak-time medallions for as long as I've been in the cab business, it looks like an idea whose time has come.

Director Hayashi said that people in city government wanted to see it happen so it will - probably early next year.

Various plans for how this will happen are being discussed at TAC but she did say that her plan called for the peak-time medallions to be leased from the MTA.

Not, on the other hand, a popular idea among MHA members.

Watch Those Flashers

Medallion holder Norma Greer had recently written to Hayashi about being harassed by a policeman when she tried to drop in a bus stop. The cop also threatened to cite her for using her flashers illegally.

The director said that she looked up the law and there is indeed an obscure vehicle code against using the flashers for anything except emergencies.

Hayashi said that it was legal to drop in a bus stop - as long you pull "as far forward as possible." She also said that she would discuss enforcement policy with the PCOs (meter maids).

In the meantime, she added that you should fight any such tickets and report the incidents to her office. It's also helpful to get the badge number of the officer involved.

Electronic Waybills and Credit Cards

Hayashi said all taxis would probably have electronic waybills installed by the first quarter of 2011. She added that Luxor and Yellow Cab were already equipped to handle them right now.

She expressed enthusiasm for the new technology because "we'll be able to gather accurate information" about the number of rides and so forth "for the first time ever." This could prove invaluable to the Controller's office in helping to figure out how to improve taxi service.

Ms. Hayashi also said that systems for handling credit cards would be installed on the back seat of some cabs at the option of each company.  One such system, VeriFone, would:
  • Allow the customers to swipe the cards themselves.
  • Prompt the customer for a tip.
  • Automatically transfer the funds into a driver's bank account.
There would be a 5% charge to the driver but Hayashi says that studies have shown that drivers make more than the additional 5% off the tips because of the prompting.

She also said owners and medallion holders could use other systems if they wanted - citing Yellow Cab that has chosen to keep their own system - but, in such cases, it would be illegal to pass the credit card charges onto the drivers.

This naturally segued into ...

Calling 311

Director Hayashi went on to say that every cab driver in San Francisco was required to take credit cards and, if they didn't, other drivers should report the culprits on 311. She also added other crimes such as being rude to customers or reckless driving to the list of things that should be reported.

So ... next time you see a cab driver holding up a customer with a Uzi be sure to call 311.

(Okay. Okay. Off with the sarcasm.)

I did point out to Hayashi that my information was that the taxi drivers, who were turning down credit cards, mostly drove for companies that were illegally charging the drivers 10% - 12% per transaction.

Hayashi said that we should let her know which companies were doing this.

Taking her at her word - the number to call (if your company is illegally charging you for credit card transactions) is 415.701.5235

In the past, Ms. Hayashi has promised anonymity and protection to any driver who makes a complaint against a company. I've never known her to go back on her word.

Thursday, November 11, 2010

Taxi Services Speeds Up the Medallion Applicant Process

Medallion applicants will no longer necessarily have to have a hearing in order to be issued a medallion. In the future the process will go like this:

1. The SFMTA will notify the applicant of the availability of a medallion.
2.  They will concurrently post the notices on the SFMTA website and several other places inviting the public to assist in its investigation of the applicant.
3.The applicant will supply proof that he or she is qualified for a medallion.
4. SFMTA investigators will review the materials and decide whether to issue or deny the application for a medallion.
5. If they decide to issue the medallion, a member of public will have 20 business days to protest the issuance and request a hearing.
6. The SFMTA must set the hearing within 60 days.
7. The burden of proof for not issuing the medallion would be on the member of the public.

If, on the other hand, the applicant is denied issuance, he or she has 20 business to request a hearing and the SFMTA must set the hearing within 60 days. The burden of proof would be on the applicant.

These procedural changes were presented by Jarvis Murray (photo, standing) at this week's TAC meeting.

The official explanation is that the change is being made because the hearings have become a bottleneck slowing down the entire process. But I suspect that the ignorance of the taxi business exhibited by many of the hearing officers (an officer at a recent hearing reputedly berated an applicant for NOT playing the airport) may also have had something to do with the decision. Hopefully, with fewer cases to be heard, only officers schooled in the cab business will be presiding from now on.

A Change in the Public Speaking Format

Also at the Taxi Advisory Council meeting, Chairperson Chris Sweis announced a change in the order in which the public will be allowed to speak on an item. Prior to Monday's meeting, the public spoke first. From the last meeting on, the order will now be:
  1. Reports on a subject will be given.
  2. The council members will discuss the subject.
  3. The public will be allowed to comment (without asking specific questions).
  4. The council members will be allowed to make motions and vote.
The change was made because many members of the public, including myself, felt that they were unable to address a subject properly unless they were given the opportunity to speak after the council members had spoken. And, indeed, I think that the public contributed much more to this weeks discussions than they had in the past.

I also think that Chris Sweis (photo) is to be commended for showing the largeness of mind to change his procedures in order to suit us.

Wednesday, November 10, 2010

How to Improve Service? Centralized Dispatch?

Before entering this debate, I think it would be helpful to imagine an ideal business model. And, this model should be looked at strictly from the standpoint of picking up cab customers in the most efficient way possible. It should have:

1. One dispatching system. As to whether this would be one big company like Pre-K Yellow Cab or a centralized dispatch is not important. What's essential is that all the taxis in the city would be connected to it.
     A. You ask why? Primarily because it would minimize the major curse of all radio/computer dispatch players - the NO-GO. No mas customers calling 7 cab companies simultaneously.
     B. No mas 4 taxis showing up for an order while passing 3 potential calls en route.
     C. This would work for the customers as well because they wouldn't be calling for, say, a distant Yellow when there was a Luxor a block away.

2. I think the system should be computerized with a modern app like Cabulous and the cabs should all be GPS enabled.
     A. I have a vision of a computer or a dispatcher automatically assigning each order to the nearest taxi. No muss mo fuss.

3. All drivers should have to pick up whatever order they are assigned unless they have very, very good reasons.
     A. I'm not interested in the employee vs Independent Contractor debate here. This is an "Ideal" system.
     B. The drivers, for instance, could agree to pick up all dispatched orders as part of their contracts. As to whether or not this would play with the EDD is something I can't answer.
     C. In any case, certain orders would not be picked up (for one reason or another) unless such a rule was in place.

Of course the system would be overwhelmed from time to time like during conventions or rush hour Friday nights but, on the whole, I think it would give the City very good coverage with the number of taxis we have now. It might also allow a cab to do things like piggy-back pick-ups when it's the only taxi in an area like the deep Sunset. And, customers could be given a more accurate estimation of how long it would take for them to get a cab; thus easing their anxiety, hostility and their desperate desire to ride in expensive limos.

Coming Soon - Reality.

    Thursday, October 28, 2010

    TAC Votes to End the Driving Requirement for "Key" Cab Company Personnel on the Waiting List ... Or the End of Daly/Ma?

    At the 10/25/10 meeting, the Taxi Advisory Council voted 12-3 to recommend ending the driving requirement for key cab personnel on the Waiting List. From the discussion leading up to the vote, "key" here means, not only managers, but mechanics and dispatchers as well. Only driver representatives John Han, David Kahn and Bill Mounsey voted against the motion.

    There is a lot to be said about this motion but first I think you need to see the agenda item under which it was voted upon.

    "Medallion Sales Pilot Pilot Program: Review buyer/applicant qualification procedures for the Medallion Application Process (Discussion and Possible Action.)

    A careful reading of the above naturally leads to a few questions.
    1. What does giving cab company personnel medallions without their having to drive cabs have to do with Pilot Program?
    2. What does it have to do with the agenda item?
    3. What happened to public comment?
    Barry Taranto, a sometimes driver and a member of the public, started to object about the lack of connection between the motion and the agenda item only to be silenced by Yellow Cab's Jim Gillespie who said, "Barry - we don't think we need your comments."

    Nor did they think they needed comments from the rest of the public. The specific subject of the motion wasn't brought up until AFTER public comment on the theoretical agenda item. So, as a member of that public, I have no choice but to make my comments now.

    Arguing in favor of zapping the driving requirement for taxi company personnel were Anthon Rebelos, Jane Bolig and John Lazar. Lazar said that mechanics and dispatchers were so important to running the companies that they shouldn't be burdened with having to drive taxis. Rebelos said that managing a cab company was a very demanding job and he had trouble finding time to meet the driving requirement. Medallion holder Jane Bolig, (a little off topic but perhaps looking forward to a future motion) seconded this idea saying that she was not even paid for being the president of Desoto Cab.

    I'd like to look at these "key" personnel groups one by one.


    As David Kahn and Bill Mounsey pointed out, being a mechanic is its own trade and it can be a good one. If they belong to a union, mechanics have it made - retirement and all the other stuff that cab drivers, including medallion holders, don't have.

    Unionized or not, why should mechanics be entitled to a medallion simply because they work for a taxi company instead of a bus company or a garage?


    This is may favorite.

    These are the guys who used to give me cars without brakes if I didn't tip them enough. But we all know about the corrupt practices that are "key" to their income flow so I won't go into the subject here.

    Let me just say that, almost without exception, dispatchers are ex-drivers who quit driving cabs for one or all of three reasons:
    1. Dispatching is easier.
    2. It's safer.
    3. It pays a lot more money.
    John Han mentioned the five or ten dollars that drivers have to tip in order to "get out" but he didn't total it up. I've heard numbers as high as $400 or $500 a shift but I suppose that's rare. Nonetheless, it's well known that dispatchers make two or three times more money than cab drivers do.

    It must be a good deal. Once they start being fed those five dollar bills through the window, dispatchers almost never go back to driving taxis.

    I think being dispatcher is a perfectly legitimate life choice - unless he or she wants a medallion. In which case, they can put in the time just like the rest of us.

    Management Problems

    I can certainly identify with the demands that meeting the driving requirement puts on people like Chris Sweis and Athan Rebelos. We all know what it's like.

    Take me for instance. During the nine years leading up to the day I received my medallion, I worked two different jobs - teaching driving in addition to driving the cab - six or seven days a week. I did this because these are both low paying jobs and I needed money to take care of my loved ones.

    I suppose I could have simply driven a cab six days a week like Francoise Spiegelman but, for the ten years prior to taking up teaching, I had been driving a cab over 2,000 hours per year and I began getting all sorts of repetitive stress injuries. I took up teaching because it's much less physically demanding. Of course you have to concentrate all the time when you teach or the kids might suddenly go on the freeway the wrong way or try to whip a left in front of a charging semi; so, it's not exactly relaxing.

    In short, I know how tiring putting in the hours for the driving requirement can be. But managers, like other "key" personnel and unlike regular drivers, can pick and chose the shifts they want to work. They can schedule their time any way they want. And, remember, they only have to work 156 four hour shifts or 624 hours a year. That's a lot less than the time that Francoise, I and hundreds of other medallion holders put in to earn our medallions.

    In addition, like all other medallion applicants, "key" personnel only have to drive four out of the five years prior to applying. They can take a year off and kick back whenever they get close.

    If, as "key personnel" they can't find the time to drive, being a manager is still a very good job. Managers certainly make considerably more money than I do.  In fact, a few of them could be considered wealthy.

    Unlike regular taxi drivers, they shouldn't need a medallion to help them retire.

    Conflict of Interest?

    Since this clearly is a foreign concept to the Taxi Advisory Council, a definition is in order. From Wikipedia:

    "A conflict of interest (COI) occurs when an individual or organization is involved in multiple interests, one of which could possibly corrupt the motivation for an act in the other."

    "More generally, conflicts of interest can be defined as any situation in which an individual or corporation (either private or governmental) is in a position to exploit a professional or official capacity in some way for their personal or corporate benefit."

    Chris Sweis, Athan Rebelos, John Lazar, and any other members of TAC who are the list, have engaged in a conflict of interest by using their positions on the council to vote to give themselves medallions worth a minimum of $250,000, or $25,000 for life, without meeting the requirements demanded of everyone else.

    The ideal of K

    I voted in favor of Proposition K long before I ever drove a cab myself because it promised to reward taxi drivers for working. When I started driving myself, and realized that unions were a thing of the past, I began to understand that a medallion was the only reward that a working taxi driver would ever get from this city. As I got close to getting my medallion, I began to see how much this system contributed to public service by keeping the best and most experienced cab drivers in the business.

    Of course it was never perfect. In the old days, anybody could put his or her name on the waiting list. It was common for mechanics, dispatchers, lawyers and cops to put their names on the list and then claim that they intended to drive when their numbers came up. As Hansu Kim has pointed out, this resulted in all sorts of people (including a few millionaires) getting medallions who wouldn't dirty their hands by driving a cab.

    With the advent of Daly/Ma back in 2001, a concrete set up of rules was adopted to insure that medallions would only go to working taxi drivers. Once again, of course, the system wasn't perfect. People could still fake waybills - although it was much more difficult to cheat than it had been earlier. 

    Now, with electronic waybills on the horizon, the ideal of "K" can finally be realized.

    And, at this precise moment, TAC is trying to change the rules so that non-cab drivers can once again own medallions.

    This is no small thing. It's a radical change in principle.

    One no longer has to drive a taxi to get a medallion, it's enough to work for a cab company. The medallion is now to be rewarded to people the companies "like" instead of working taxi drivers. The specter of medallion holders who have never driven a cab and never will, once again becomes a possibility.

    The 3,000 or so drivers who have already qualified under Daly/Ma will just have to take a step back in line to move room for taxi company personnel.

      Sunday, October 24, 2010

      A Conversation with Rebecca Lytle

      I spoke last week with Rebecca Reynolds Lytle, Vice President of Lending at San Francisco Federal Credit Union (SFFCU).

      Among other things we discussed the differences between a Gate and Gas and an Owner/Operator arrangement from her standpoint of making a loan to a new buyer. Other subjects came up during the conversation including, of course, her decision to require the full 20% down payment from those who choose the Owner/Operator lease and not accept down payment assistance except on a gate and gas arrangement.

      Let Last Be First

      It turns out that Ms. Lytle and SFFCU had already decided to require the full down payment from Owner/Operators before TAC voted to do so. The reasons for this were that an Owner/Operator loan:
      • Costs more to underwrite and maintain.
      • Has little or no way for the credit union to verify that various financial arrangement are, in fact, what the new buyers claim they are.
      • Carries a higher risk because of this.
      SFFCU wants to reduce their risk by getting the full $50,000 down payment from Owner/Operators.

      In order to understand the reasoning behind this, it's necessary to see how these loans are structured.

      Gate and Gas Arrangements

      Lytle described these are "turnkey" arrangements because the company:
      • Buys the car.
      • Provides the insurance.
      • Does the maintenance on the car.
      • Hires the drivers and makes certain that they have good driving records and A-Cards.
      • Etc.
      The taxi companies are set up to do this and they have a vested interest in making certain that everything is done properly.  Therefore the credit union doesn't have to sweat the details.

      Owner/Operators Arrangements

      The Owner/Operator has to do all the above himself or herself.

      In order to assure the safety of the loan, SFFCU and Ms. Lytle need to make certain that:
      • The Owner/Operator owns the car and does have insurance.
      • The drivers have A-cards.
      • The Owner/Operator is complying with City regulations by not charging more than $104 per shift for a hybrid or $96.50 for a regular vehicle.
      • Lytle is also considering getting copies of DMV printouts as supporting documentation that the medallion holder is complying with the Transportation Code.
      • Etc.
      All this involves considerably more work and thus more cost in terms of labor hours than a GG Loan. And, even after the additional issues, the loan company still has no way to guarantee that the information is accurate or kept up to date - although the credit union does require the Owner/Operator to provide updates on all the above annually, or sooner, if requested.

      Because of the uncertainly, Ms. Lytle and SFFCU want to see a greater amount of financial responsibility on the part of an Owner/Operator. Lytle added that it doesn't make any sense to continue allowing  Down Payment Assistance on a loan with this type of lease arrangement when the MTA intends to stop this practice in the next 30 days or so anyway.

      Forced into being Owner/Operators?

      Prior to 10/14/2010, when SFFCU began requiring the 20% down, Ms. Lytle said that 63% of the loans were to Owner/Operators. She takes issue, however, with people who claim that new buyers have been "forced" by financial necessity into this type of arrangement.

      Ms. Lytle pointed out that the $250,000 fixed price was chosen by the MTA requirement that loan payments not exceed the monthly amount that medallion holders are paid by taxi companies. The $250,000 number was arrived at by calculating the size of loan payments and comparing them to Gate and Gas monthly payments. Lytle also indicated that, in order to further validate the worth of the medallion, the MTA's fixed price was compared to medallion markets in Boston, Chicago and Philadelphia - cities similar to San Francisco.

      SFFCU so far has made three types of loans;
      1. 12 years with a fixed rate for $2,300 a month.
      2. 15 years with a 3 year balloon payment for $1,798 a month.
      3. 25 years with a 3 year balloon payment for  $1,440 a month.
      The monthly payment is slightly higher if the borrower did not have the full 20% down payment and needed the down payment assistance loan. You can view examples of loan payments for all the different types of loans on the credit union’s website at

      These numbers are consistent with the amounts that various companies pay their medallion holders.

      To the charge that the interest rates will probably rise when the balloon payments become due, it could be said that there will probably be a meter increase before then, meaning that medallion holders will be paid more money.


      Ms. Lytle said that these taxi medallion loans have given her more satisfaction than almost any other loan that she's ever underwritten. They've allowed her to "help these people realize their dreams." The medallion holders or their relatives are "overjoyed" to be able to sell the medallions after thinking that they never would be able to do so. And the new buyers are "so excited" to finally get their medallions.

      Ms. Lytle said that she would be more than happy to answer any questions about the loan programs. She can be reached at:

      Tel. 415.359.2926   Fax. 415.447.2240

      Tuesday, October 19, 2010

      Ordinance Amending the San Francisco Transportaion Code

      The ordinance that Director Christiane Hayashi intended to present to the MTA board today (it will be heard on 11/4/2010) does several things:
      1. It puts the enforcement of specific laws concerning the taxicab business under the San Francisco Transportation Code.
      2. It creates a class of misdemeanors.
      3. It clarifies and describes various violations of the law.
      For instance, it prohibits "Solicitation and Paid Passenger Referrals" and then spells out in detail exactly what this means.

      I intended to do a summary of the ordinance but the Director has already done it far better than a humble cab driver like myself could hope to do, so I'll simply copy her prose for you.


       The proposed ordinance would grant express authority to Taxi Services’ field enforcement staff the ability to enforce specified parking regulations. Such authority would also support their ability to tow illegally parked vehicles in violation of those sections in accordance with state laws.

       The proposed ordinance would move several existing misdemeanors from the Police Code to the
      Transportation Code: § 7.3.8 (to knowingly make false statement or conceal information in connection
      with a motor vehicle for hire permit); § 7.3.9 (to refuse to pay the legal taxi fare), § 7.3.10(a) (for a Driver to overcharge a passenger); § 7.3.5(a) (to drive or operate a taxi on City streets without a permit).

       The proposed ordinance would newly create the following misdemeanors in the Transportation Code:
      o § 7.3.5(b): To operate an unpermitted dispatch service or color scheme.
      o § 7.3.5(c): To drive a taxi without a permit or to allow a person without a permit to drive a taxi vehicle.
      o § 7.3.6(b): For any person, and for any person or business acting in concert with that person, to take
      payments for the purpose of referring passengers.
      o § 7.3.7: For any permit holder to solicit or accept payments or gifts from drivers in exchange for
      dispatch calls, shifts, vehicles or assignments.
      o § 7.3.10(b): For any permit holder to charge drivers except such charges to drivers that are authorized
      in Division II of the regulations.
      o § 7.3.10(a): For a taxi driver to charge more than the legal rate of fare.
        The complete text, as well Hayashi's summary of the ordinance, can be found here.

        Mas Dinero Por Citations

        The ordinance allows police to issue misdemeanor citations to illegal limos and taxis for $2,500 for a a first offense and $5,000 for a second. This is up from the current charge of $165.

         Taxi investigators for the SFMTA already have the ability to issue "administrative" citations to limos and taxis for $5,000.

        Administrative Enforcement vs Criminal Enforcement

        This is an important distinction because administrative laws allow SFMTA investigators to issue fines without having to go to court. This is similar to the fines that investigators can level against restaurants for sanitary violations or bars for allowing underage drinking.

        To tell the truth, I'd never heard of this field of law until I talked with Director Hayashi. Yesterday I tuned on Law and Order as a break from writing and there stood Lt. Anita Van Buren threatening to bust a bunch of militia types for carrying rifles in NYC under "Administrative Code No ...." It seemed effective. They dispersed.

        Administrative fines should greatly enhance the ability of the SFMTA to go after and penalize illegal taxis and limos, doormen soliciting tips and the hotels where they work as well as others violators of the misdemeanors listed above.

        If this ordinance is okayed by the SFMTA it will go to the Board of Supervisors for final approval.

        Friday, October 15, 2010

        TAC Votes to Limit Down Payment Assistance

        On Tuesday October 12, the Taxi Advisory Council voted unanimously (William Minikel and Dmitry Nazarov were absent) to grant Down Payment Assistance only to buyers who choose to work their taxis as "gate and gas" for at least three years. 

        The motion to do so was put forward by National Cab's Dan Hinds (photo, left) in order to limit the number of new buyers who operate their cabs as Owner Operators or Affiliates (i.e. owners who operate their cabs as Long Term Leases).

        The vote came after a lengthy discussion of the pros and cons of GG vs LTL and the problems of trying to run a full service cab company.

        Declining Profits

        Desoto's Jane Bolig said that: problems with the EDD (California's Employment Development Department), the costs of medallion holder bidding wars, and the increased number of cabs going LDL were causing declining profits in companies giving full service.

        (Her comments on the EDD referred to suits that the EDD had filed against both Luxor Cab of San Francisco and Yellow Cab of San Jose that charged the taxi companies with millions of dollars in back Unemployment taxes.)

        Yellow Cab's Jim Gillespie said that the EDD "only has issues" with GG drivers and leaves LTL alone. However, he added that it was possible to structure GG leases in such a way that "doesn't" turn GG drivers into "employees." He gave the practice of having drivers pay for their shifts in advance as an example.

        Jane Bolig said that she thought that giving Fleet Medallions to full service companies would be about the only way for them to survive.

        Green Cab's Athan Rebelos (photo, left) said that he agreed with the necessity for fleet medallions and added that he'd been in the taxi business in New York City where they had a combination of Fleet medallions and individual medallion holders and suggested that San Francisco follow a similar policy.

        But he also said that declining profits were a "national problem" and that in many cities neither the taxi companies nor the cab drivers were making any money at all.

        Scheduling Problems

        Lease Driver John Han (photo, right) said that he wanted to be a GG driver and that, if taxi companies would actually honor the "Independent" contracts that their drivers sign, fewer drivers would want to become LTL drivers.

        Han gave the example of his own shift which is listed as being from 7:00 am to 5:00 pm according to the lease he signed. He usually can't get started driving, however, until 9:00 or 9:30 am - unless he pays the dispatcher "some huge tip."

        Council President Chris Sweis chose to describe this as "a scheduling problem." And, indeed, it no doubt is. The company Han works for is clearly scheduling a "short" that overlaps John's shift. The "short" apparently runs from 3:00 am or 4:00 am to 9:00 am. This allows the company to get an additional three or four hours of profitability (not including tip) from the medallion. The "short" takes up part of Han's shift  because the company would be unable to sell the "short" without including the 7:00 to 9:00 morning rush hour.

        But I digress ...

        Unintended Consequences

        Dan Hind's original motion didn't impose any time limit but Jane Bolig said that having a GG taxi wouldn't do Desoto Cab any good unless they could keep the taxi for three years.

        Lease Driver David Kahn (photo, right) then proposed an amendment to the motion calling for a three year time limit.

        Athan Rebelos backed the motion saying that the Pilot Plan "had been developed around a gates and gas program" and that no one was prepared to deal with so many Owner/Operated taxis hitting the streets at the same time.

        The unanimity of the vote came from the perception that the conversion of GG cabs to Owner/Operated leases has been having a negative effect on almost everyone in the business except the new buyers.
        • Companies have been losing revenue from cabs.
        • Drivers have been losing shifts.
        "Warp Speed Scottie."

        The Taxi Advisory Council, as its name suggests, can only advise the MTA on a policy. The MTA has to okay a change and then a new policy does not officially take effect for 30 days.

        The San Francisco Federal Credit Union, however, already put the new Down Payment Assistance rules into effect on 10/14/2010. As of that date, "Supplemental funds from the down payment assistance provision in the Pilot Program are not acceptable for financing" Owner/Operator (aka Affiliate) leases.

        Wednesday, October 13, 2010

        TAC 10-12: This and That

        Most of the TAC meeting was concerned with leasing but a few other subjects came up.

        1. Chris Hayashi, wearing her flashiest dress ever, mentioned that she was re-staffing in order to end various backlogs.

        She also said that an owner/driver has been putting stickers on cabs calling for an end to Paratransit. The man apparently has a website advocating violence against handicapped people. Chris said that she has started revocation action against the owner and added that any other drivers who knowingly placed anti-Paratransit stickers on their cabs would face disciplinary action.

        "This goes way beyond the rights of free speech," she said.

        2. Hayashi has revised and re-written Article 7 of Division 1 of the Transportation code to add several new misdemeanors. I intend to write a post on the subject later but the ordinance would:
        • Allow MTA investigators to fine illegal limos and taxis $5,000 for violations.
        • Make enforced tipping illegal.
        • Make it a misdemeanor for a customer to refuse to pay the fare.
        The ordinance will go before the MTA Board on Tuesday 10-19-2010. Public comment will be allowed and is usually listened to by the Board.

        3. Speaking of public comment, I quietly suggested that TAC's policy of requiring public comment to come before the council discussed a subject instead of after was, "unheard of, ridiculous and outrageous" adding that TAC was the only committee that I knew of that followed such a policy.

        Much to my surprise, Council President Chris Sweis discussed the issue with me after the meeting. I told him that the public could make more meaningful contributions if they were allowed to speak after the councilors but before motions and voting. I was backed up in this by Barry Korengold who noted that both the Board of Supervisors and the MTA Board conducted their public meetings in the manner that I was suggesting.

        Sweis said that his main concern was that my approach would be less efficient. I told him that I thought that doing it (taxi reform) right was important than doing it quickly.

        Swiess said that he'd look further into the matter and presumably make a ruling on it next meeting.

        4. Mark Gruberg of the UTW, in one of his stranger (considering that he's supposed to be representing lease drivers) speeches, passionately attacked the provision in the MTA ordinance that would make tipping illegal. He said that it would be unenforceable.

        Nonetheless it'll be on the books, Mark, making it more enforceable the than nada we have now.

        5. As the meeting was winding down, John lazar, out of the blue, said that the taxi industry was being run by an agency that didn't know anything about taxicabs and was doing nothing. He added that the room was full of people who really knew what they were doing, implying (I think) that the cab business would be better off if it wasn't regulated.

        Director Hayashi  responded heatedly to Lazar saying, "I take exception to the idea that we've done nothing here." She went on to praise her staff for their hard work and accomplishments under trying circumstances; and pointed out that, among other things, they'd re-written all the rules and regulations concerning cabs and cab driving in San Francisco.

        I would add that, while Lazar and his knowledgeable pals spend over 20 years trying to get the right to transfer medallions, Chris Hayashi is the person who made transferability happen. She also:

        • Negotiated the Pilot Plan.
        • Set up a realistic method to rid the City of illegal limo and cabs.
        • Created the Taxi Advisory Council that has empowered Lazar to influence the way the industry is run.
        • Etc. Etc. Etc.
        Although I no longer think that Chris Hayashi is perfect, she's close enough for the cab business.

        Next: More on Leasing.

        Thursday, October 7, 2010

        TAC 9-27: The Driver's Fund

        As of last week, some numbers for the Driver's Fund were:
        • 13 = Total Medallions Sold at $250,000 each.
        • $162,500  (5% or $12,500 for each salex13) = Total in Driver's Fund.
        • $92,026 = Taxi Wrap Fund balance.
        • $254,526 = Taxi Wrap and Driver's Funds combined.
                                                        The Taxi Wrap Fund

        was a holdover from the Taxi Commission and has been administered by Taxi Services since last year. The money coming from the current taxi wraps ($141 to the MTA while $265 goes to the companies) is currently being put into the fund.

        The Taxi Advisory Counsel, in an unanimous vote, decided to wrap the Taxi Wrap Fund into the Driver's Fund.

        Director Chris Hayashi said that she was working to make sure that future wraps would not cover any windows in the cabs and that taxis would be clearly recognized as such by the public.

        The Driver's Fund

        There were an abundance of ideas about what to do with money (see top photo.)

        Jane Bolig said that what was done with it would depend upon whether it was "a popcorn fund or a plasma tv fund."

        Chris Hayashi did some arithmetic showing that the sales of 100 medallions under the Pilot Plan would bring in 1.25 million dollars.  If such sales continue beyond the Pilot Plan (almost a certainty), the fund would definitely grow way beyond the "popcorn" category.

        There were several ideas about how to increase the money in the fund:
        1. Put the money into an interest bearing account instead of just letting it sit as it does now. Chris Hayshi said that she would look into this.
        2. Councilor William Minikel had the intriguing idea of makiing the MTA give part of its advertising revenue to the Driver's Fund since the MTA gets money from us. Quid Pro Quo. Great idea. Good luck with that Bill. 
        3. Mininkel also proposed that each driver give one dollar to the fund every shift echoing a plan laid out by Barry Korengold last year. 
        Who gets the money?

        Barry Korengold (photo, right) wanted a vote to insure that the monies in the fund be used for non-medallion holding drivers - as the people at the Town Hall meetings intended. He said that it shouldn't even be necessary to discuss it.

        Director Chris Hayashi, on the other hand, has expressed the idea that the people at the Town Hall meetings had left it up to the Taxi Advisory Council to decide who the money was to be used for - an interesting view to me since the duties of TAC were never discussed at Town Hall meetings.

        My impression agreed with Korengold's so I checked my notes and, indeed, that the monies in the Driver's Fund should be used for non-medallion holders, was a basic cornerstone of the Pilot Plan.

        Chris Hayashi (photo, left) had said, "Nobody will get everything they want but everyone will get something." Her vision of fairness and justice - in a business with little of either - is what turned so many of us into her groupies.

        The Driver's Fund was the "something" that 5,000 or so non-medallion holders were supposed to get. The medallion holders would be given the right to sell their medallions and the non-medallion holders would have the right to benefit from the Driver's Fund. Quid Pro Quo. That was the compromise. That was the consensus. That was the deal.

        Nonetheless, Hayashi wrote it up differently than the vast majority of Town Hall participants had purposed and insisted that her Taxi Advisory Council decide for whom the money should be used.

        The Vote

        Despite the fact that eight of the fifteen members on TAC are taxicab company owners, managers or stockholders, I still thought that Korengold's motion would carry the day. My reasoning was:

        3. Those 5,000 non-medallion holders make up about 75% of the drivers in the business. Simple logic would dictate that, if TAC is supposed to be representing the taxi industry, something should be given be given to the majority of its workers.

        2. Retired medallion holder Art Lembke has often said that the reason that taxi companies can't give benefits to drivers is that the profit margins are too low. But the Driver's Fund is new money. Allowing regular drivers to keep that money would give medallion holders and company owners the chance to unleash the true generosity of spirit that Lembke claims has been held in check by the harsh realities of the taxi business.

        1. Taxicab owners and medallion holders are very sensitive to the public's perception of them as greedy, grasping, self-serving, venal and corrupt sharks. Allowing non-medallion holders to keep the money in the Driver's Fund could help to change this bigoted and unjust stereotype.

        After Korengold introduced the idea that the non-medallion holders should keep the fund, the ensuing discussion was initially lame, as if the councilors couldn't think of what to say. Then Luxor Cab President John Lazar (photo, in center), claiming that medallion holders could little more afford to pay for a catastrophic injury than a regular driver could said,

        "Its a Driver's Fund ... yea, the medallion holders make a couple a thousand a month more ... but they don't have so much either ... they're all drivers ..."

        A slight gasp of relief could be heard from around the room and one councilor after another soon gave a variation of the "we're all drivers" speech. I half expected them to break into a chorus of We Are the World.

        Of course, one could have pointed out that:
        • Lazar had turned the question on its head and was using semantics and sophistry to spin his argument. 
        • Since the fund is about money and not sentimentality, the essential fact IS the $25,000 more a year that the medallion holders make, not the fact that some medallion holders also drive.
        •  The "couple of thousand" more that we medallion holders make a month could be used to purchase the accident insurance that non-medallion drivers rarely can afford.
        One could have added that:
        • Being able to sell the medallion gives the medallion holder an additional $250,000 more than non-medallions drivers.
        • Giving medallion holders access to the fund would be double-dipping - in effect giving them a rebate on the 5% that they are charged for transferring their medallions.
        One could have concluded that the reason the Driver's Fund was set up in the first place was to give the non-medallion holding drivers, who make half as much money as their medallion holding brothers and sisters and won't be paid $250,000 when they retire, a little pocket change.

        But one wasn't allowed to point anything out. TAC president Chris Sweis (photo, left) has decreed that (unlike at SFMTA board meetings or at most public government committee meetings of any kind in San Francisco and California) the public is not allowed to speak after the councilors and before a vote, making TAC's claims to meaningful public participation and true transparency largely bogus.

        Thus, did semantics and sophistry carry the day. And, thus, the public's unfortunate prejudicial, bigoted and unfair perception of taxicab owners might continue.

        Only Korengold,  John Han and David Khan voted in favor of reserving the fund for non-medallion holding drivers.

        In sum: A victory for TAC over the Pilot Plan. A defeat for Chris Hayashi's vision. And, a defeat for those 5,000 non-medallions holding workers who are "all drivers" too.

          Tuesday, October 5, 2010

          TAC 9-27: Gate and Gas vs Long Term Lease

          The main topics of the latest TAC were Gate and Gas (GG) vs Long Term Lease (LTL) and the Driver's Fund. Both subjects were discussed at length and in depth so I'll deal with them in separate posts.

          First, I want to apologize in advance for any omissions or errors. I recorded the proceedings and slacked on my note keeping. When I listened to the tape, however, the only people I could understand were myself and Carl Macmurdo, who sat next to me. This article, in other words, will be even more a stream of consciousness than usual.

                                             Random Stuff

          San Francisco, the third most expensive city in the country, has the 10th highest taxi fares.

          Some Pilot Program Stats:
          • 18 medallions are being issued to people on the list.
          • 1 SFMTA held medallion has been transferred (i.e. sold) to a buyer.
          • 19 medallion holder medallions are in the process of being transferred.
          • 9 Pre-K medallion holders have died during that last year.
          • 3 Pre-K medallions have been sold.
          Quote of the week,

          "Cab drivers are all schemers and frauds ... and need to be watched." Bill Mounsey  (photo, above) on the drivers ahead of him on the Waiting List.

          Leasing vs Leasing 

          The above title is my way of noting that no other system  (like a split of the meter) is in play. 90% of the county may work on some form of employer-employee relationship but we in the cab business prefer to stay in the same league as strippers, office temps and call girls.

          The Name Game.

          The initial discussion centered around tying to decide what to call the new owners who chose to work their cabs as an LTL. Some people wanted to call the relationship an "affiliate" because the new owners would usually be affiliated with a color scheme but I think Rebecca Lytle of the San Francisco Federal Credit Union carried the day by calling them "Owner Operated" leases (OOLs.)

          The Owner Operated Lease.

          It's basically the same as an LTL, except the owners don't lease it from a company. They buy their own cars and chose their own drivers. If they associate with a company, they pay for the radio and the color scheme.

          There are significant differences in the way the contracts are written because the credit unions demand certain information from the owners (I'll cover this later in an interview with Rebecca Lytle) but the taxis themselves are worked much like an LTL.

          The Leasing Debate.

          There are strong feelings on both sides of the GG vs LTL issue.

          Green Cab manager and councilor Anthan Rebelos said that he had "about five pages" of things he didn't like about the LTL. Councilor and driver John Han, Mark Gruberg of the UTW and myself also spoke strongly against the practice. Putting our ideas together, you could come up with the following partial list:
          • Hundreds of experienced drivers have lost their shifts or their jobs.
          • They've been replaced by drivers with less knowledge
          • LTL drivers are less likely to take radio calls.
          • LTL taxis hurt service in the neighborhoods.
          • LTL cabs are frequently subleased to brokers.
          • These brokers are charging desperate people illegal amounts of money to drive shifts.
          • This brings a criminal element into the industry and, as such, creates situations of potential violence.
          • This is almost impossible for the MTA to police.
          • The companies themselves often don't know who's driving their cabs.
          • This increases the potential for catastrophic insurance losses; and 
          • Endangers the public.
          • Jim Gillespie of Yellow Cab says that LTL drivers are as likely to take radio calls as anyone else.
          • In the past, he's also claimed that LTL drivers get into fewer accidents.
          • A man whose name I didn't get (photo, right) said that he'd been driving for 34 years and had been given junk taxis under the GG system.  He now works under an LTL  and loves it because he's got a brand new cab and makes a lot more money.
          • Driver Ton Lee, who represents Asian drivers at the airport, said that LTL drivers work hard just like everybody else and deserve consideration.
          The Devil Made Him Do It.

          John Lazar of Luxor Cab said that he resisted LTLs until 2004 when he "lost 24 GG medallions."

          This echoed Jane Bolig of Desoto Cab who said, "medallion holders are diving the system" by setting up bidding wars between companies (Hmm - guilty). She also said that "insane" liability insurance rates were forcing companies to change the way they do business.

          "Force" is a big word with Lazar who claimed that new buyers were "forced" to go OOL because of the high cost of their loans. At an earlier meeting, he had said that a buyer making $2,300 a month couldn't cover $2,700 a month loan. This time he asked Rebecca Lytle to confirm his theory.

          Ms Lytle, however, did nothing of the kind, saying that their cheapest monthly rate was $1,446 per month for a 25 year balloon loan. She later told me that the rates for the other loans that she had underwritten were:
          • $1,798 for 15 year balloon loan.
          • $2,304 for a 12 year fixed rate loan.
          Not Forced - Wanted.

          Nonetheless, all but a few of the new buyers have chosen to become Owner Operators. This is something that few people at the Town Hall meetings anticipated and it changes the dynamic of the sales. All the calculations that were done to come up with the $250,000 fixed rate were based on a GG system.

          Once upon a time, Director Chris Hayashi told me that she wanted to end LTLs. Even if she still wanted to do this, it would take three years to phase them out because of the money the drivers have spent on cars. And, what about the new OOLS?

          There could be a lot more said about this subject ... and there will be.

          Sunday, September 26, 2010

          Yellow Needs More Cabs? For Whom?

          There are several questions and interesting aspects about Yellow Cab manager Jim Gillespie's claim to the MTA Board that Yellow needs 139 more taxis in order to service all the radio calls that the company gets.

          1. Why 139? Why not 140 or 135? Must be scientific, huh? Let's do the math:
          • Gillespie says that Yellow failed to pick up 280,000 or 25% of its radio calls during the last 6 months.
          • 280,000 / 139 = 2,014 radio calls that Gillespie expects each new taxi to pick up in 6 months
          • 2,014 / 182.5 days = 11 radio calls per cab picked up per day.
          • /2 shift a day = 5.5 radio calls per day per driver.
          Sounds a bit lame, doesn't it? But, maybe Yellow doesn't expect much from new drivers. Let's look at the veterans for comparison:
          • If 280,000 = 25% then 840,000 (280,000*3) calls must have been picked up during the last 6 months by Yellow's 500 cabs.
          • 840,000 / 500 = 1,680 radio calls picked up per driver for 6 months.
          • 1,680 / 182.5 = 9.2 radio calls taken per cab per day.
          • /2 = 4.6 radio calls per driver per day.
          Hmmm. Seems like the vets are even lamer. Let's do a little more math. What if each vet picked up 5.5 radio calls per day?
          • 5.5*2 = 11*182.5 = 2,007.5 picked up calls per cab for 6 months * 500 = 1,003,770 radio calls picked up.
          • If 280,000 = 25% then Yellow handles 1,120,000 (280,000*4) radio calls per 6 months.
          • 1,003,770 / 1,120,000 = the percentage of calls that would be picked up by Yellow drivers if the vets were as good as Gillespie expects the rookies to be = 89.6% of the calls picked up.
           What if the vets worked just a little harder and picked up 6 rides per shift per day?
          • 6*2 = 12 pickups per cab per day*182.5 days = 2,190 pickups for 6 months*500 taxis = 1,095,000 pickups.
          • 1,095,000 / 1,120,000 = 97.8% of the calls picked up.
          Well, it looks like we've found a solution to Yellow Cab's problem - train or whip the slackers.

          In short, this is the only time that I can recall a company using the incompetence of its personnel as a reason to expand its business.

          In short, the only science involved in Gillespie's speech was the science of bs.

          2. Yellow Cab will not guarantee that all, or any, of the new drivers will take radio calls.

          Perhaps you, gentle and misinformed reader, imagine that Yellow has a dispatching system that will use GPS to automatically assign the closest of those 139 cabs to one of those 280,000 radio calls?

          Alas - that's not the case. Yellow's computer will inform their closest empty cab that there is a nearby radio call but whether or not the driver will accept the order is anybody's guess. He or she can take it or leave it. This also assumes that the closest driver actually has his computer on, which is problematical.

          What's going on here?

          3. Yellow Cab (along with all other San Francisco taxi companies) is in the leasing business, not the taxi business.
          • They make their money from leasing taxis to drivers, not from the actual fares.
          • The drivers pay the companies first and then make their money from picking people up.
          • As long as a cab company can fill it's shifts with lease drivers, it doesn't matter how much actual business the company does.
          • Mild recessions (with declining demand for taxis) are usually good for cab companies because desperate, unemployed people will take bad shifts. A little money is better for them than nothing.
          • Yellow Cab, for instance, wasn't hiring in 2008 and 2009 because all their shifts were filled. 
          4. Yellow Cab (along with all other San Francisco taxi companies) will never tell a driver to take a radio call. Why?
          • Cab drivers in San Francisco are Independent Contractors, not employees.
          • What these drivers are is independent of are all laws that protect employees.
          • Cab companies do not have to pay unemployment taxes, social security taxes or (for Long Term Lease drivers) Worker's Compensation, etc on Independent Contractors.
          • Telling a driver to take a radio call would make said driver an employee. 
          • Telling a driver to take a radio call would mean that Yellow Cab would have to pay the taxes etc listed above.
          5.  Yellow Cab (along with most other San Francisco taxi companies) is more and more operating its medallions under long term lease arrangements.
          • The medallions are leased by the month and the taxi companies have no control over who drives the cab.
          • Hundreds of experienced drivers have lost their shifts due to this trend.
          • They have been replaced by new drivers who aren't trained (for Yellow to train them would make these drivers employees).
          • Most of these Long Term Lease drivers hang out at the airport or head downtown.
          • These new drivers are much less likely to take radio calls than the people they replace.
            And, those are the real reasons why people in the Bayview, the Sunset, the Richmond and Noe Valley, not to mention the attractive blond at Greenwich and Scott, aren't getting taxis as quickly or as often as they should.

            As long as the current taxi system remains in effect, 139 more Yellow Cabs will do little or nothing to improve San Francisco's radio business. 

            Gillespie was quoted in the Examiner as saying, "If we had more taxis and they were more spread out, people could get their cabs quicker and more people would call ..."
            If the cabs were "more spread out" ... but they won't be any more spread out than the current cabs are. Under the current system there is no leadership or direction, there is no one to tell the taxi drivers where to spread. The new taxis, like the currents ones, will gravitate to areas where the service is already good like SFO and Union Square but service to the outlying areas would not be improved one whit.

            If Yellow Cab (along with the other companies) ran their businesses in a more rational manner, if the companies were more interested in serving the public than in avoiding various forms of taxation, the taxicabs we already have on the street would more than adequately handle the radio calls.

            The only people who would really benefit from those 139 more medallions would be the owners of Yellow Cab along with the new medallion holders.

            Thursday, September 16, 2010

            TAC III Part 2

            The Taxi Advisory Council spend much of their time last Monday articulating their goals and structuring their future meetings with the aim of having a report on the Pilot Plan ready by the end of the year. (If you click on the photo you can blow up a good summary etched by Chris Hayashi.)

             The subject of electronic waybills was also discussed. Director Hayashi pushed for them because they would end the possibility of anyone handing in fraudulent waybills and allow her to gather accurate information on taxicabs for the 1st time ever. Many drivers, on the other hand, were less enthusiastic about the idea. Council member Bill Mounsey especially disliked them because he felt that an electronic watchdog would restrict his freedom.

            During public comment, Driver Eric Hattan brought up UberCab - an illegal, high-tech taxi service that is using San Francisco as a beta test before going into other markets.

            But for me, the most interesting facet of the afternoon was a brief preview of the "Gates and Gas" (GG) vs Long Term Lease (LTL) debate.

            Counciler John Lazar of Luxor cab showed concern over the fact that most of the buyers were opting for the LTL. He said that:
            • Because the payments for the loans were more for the buyers than they could earn from a GG arrangement, they were "forced" to go to LTL.
            • This was causing numerous experienced drivers to lose their shifts.
            • The California EDD was going after Luxor as a test case and would later go after every other company.
            • The EDD considered GG drivers employees and LTL drivers Independent Contractors.
            • This seemed to imply that it would be less expensive and more profitable for cab companies to go to LTL.
            During public comment, Hansu Kim expressed the fear that the industry would go totally LTL and that the cab companies would become little more than radio services in the future. Other speakers, including myself, thought that LTL drivers didn't take radio calls and hung out either at the airport or downtown - thus reducing the level of service to the neighborhoods.

            TAC decided that they needed to know:
            • How many cabs were on LTL?
            • How many were GG/
            • What percentage of buyers were going LTL?
            • The effect on public service.
            People also wanted to know how many drivers had lost their jobs and what had happened to them but one of the company managers didn't think that there was any way to find out this information. Meaning they don't keep records of who works for them? Or, perhaps he meant that he didn't know what happened to the drivers after they lost their shifts.

            Council member Timothy Ajaegbu (right) said that he was very concerned about this trend because he is a gates and gas driver.

            A further and deeper discussion of GG vs LTL is on the agenda for next week.

            If you are concerned about your shift or the future of the taxi business, you should try to be there. The turnout so far has been amazingly small. You don't know what you've been missing. This is better than Reality TV. For one thing, it's really REAL.

            Tuesday, September 14, 2010

            TAC III Part 1

            The Taxi Advisory Council met for the third time under the assured and cheerful chairpersonship of Chris Sweis.

            The main topics considered were a new credit card system and how to structure the long term agenda for future meetings, with the goal of making a report to the MTA Board by 12/31/2010. There was also a brief foray into the "Gate and Gas" vs "Long Term Lease" (with no other possibility considered) debate.

            Credit Card Charges

            Most of the discussion on credit cards revolved around a plan to put in a backseat terminal that could be operated solely by the customers. A  5% or 6% charge would be passed on to the drivers. The terminal would also include advertising with the revenues being split between the taxi companies and the drivers.

             Barry Korengold, among others, didn't like the idea of charging the drivers and suggested the costs be passed on to the customers. Jane Bolig wondered what happened to the 75 cent surcharge for the use of a credit card which was supposed to have been passed by the MTA. Barry Toranto, during public comments, pointed out that filling stations charged two sets of prices - one for credit card use and one for cash - and thought that it would be legal for cabs to do the same as long as it was posted.

             Chris Hayashi said that Visa would not okay passing on the charges to the customer due to contractual obligations that no one but she understood and that the MTA could not regulate a private contract. She added that the taxi industry could try a "kick the door down approach to Visa" (by say, refusing to accept Visa) but there's no guarantee that it would be successful.

            A few people brought up the illegal fees (reputed to be as high as 10%) that some companies are allegedly charging their drivers for the use of credit cards but, for some reason, Chris Sweis didn't think further discussion of the subject would be productive. Jim Gillespie said that Yellow Cab only wanted to pass on their actual charges which amounted to about $80,000 per month. He also claimed that San Francisco was the only city he knew of that did not pass credit card charges on to the drivers.

            Hansu Kim said that the Veripone system that he represents had done studies showing that customers tipped much more than normal using Veriphone, meaning that the drivers would actually get more than the 5% charge back in tips.

            John Lazar gave a breakdown of the credit card charges that Luxor deals with.
            • Visa and most other cards charge 3.8%
            • American Express charges 5.0%
            • There are also potential fraud and other problems that required staff time. 
            Lazar's solution would be to raise the meter which would allow drivers to recoup the  5% and more. Athan Rebelos thought the drivers should get a 50 cent peak time surcharge along with a 50 cent surcharge for radio calls and rides with multiple stops. David Kahn pointed out that taxis in other countries charged more for picking up radio calls than for flags and suggested that we do the same here.

            In short, there were many ideas but no clear agreement about what should be done.

            Advertising Revenue

            This was also true of the idea of splitting the advertising revenue. None of the owners liked the idea because it would be too complicated for them to figure out for each driver. No one liked the idea of audio being allowed for the advertising in the cab because, according to John Han, it would "drive me batty."

            Me, too.

            I don't think anyone suggested these possibilities: (1) if the revenue was large enough - to let the owners keep it and pay the 5% credit card charge themselves; or (2) To average out the amount of the advertising revenue per month and pass the driver's share back in reduced gates. But who am I to have the last word?

            Part 2 tomorrow and tomorrow and tomorrow.

            Wednesday, September 8, 2010

            Leasing: An Idea Whose Time has Come ... and Gone? II

            "The Lease" is a Reagan era relic that has been used primarily to bust unions and take away worker's rights. Leasing of course has existed in various forms for hundreds (thousands?) of years but the practice wasn't used in employer/employee situations until the late 1970's. The change was brought about after a Federal court judge (supposedly Supreme Court reject Robert Bork - although I've been unable to track this down) ruled that independent contractors could not legally unionize.

            The ruling turned the "Independent Contract" into one of the most effective (and under-reported) political documents in American history. As one of the instruments of Vodoo Economics (The theory that giving tax breaks to the rich improves everyone's lives.), it helped transfer massive amounts of money from the middle and working classes to the rich during the Reagan era - a trend that continues today.

            The Lease was introduced into the San Francisco taxicab industry by Jim Steele, the manager of Yellow Cab, in the late 1970's and was soon taken up by every other cab company in the city. When Luxor and Desoto switched to The Lease, they allowed the drivers who already belonged to the union to continue doing so until they either retired or died off, but no new drivers were permitted to join.

            The Advantages of Leasing

            There are two major advantages to leasing for an employer.

                 1. The first is economic.
            •  Without a union to deal with companies no longer have to provide: medical benefits, sick leave, maternity leave, paid vacations, retirement benefits.
            • The saving go far beyond that, however, because workers are not only forbidden to unionize but are no longer employees; and thus lose the protections and benefits that 150 years of labor history and law have won for employees. There obviously is no minimum wage and the company no longer has to pay half of the driver's Social Security tax or unemployment taxes etc. When The Lease was originally morphed into an anti-labor document, companies did not have to pay for Workers Compensation either. The government forced them to start paying for this ten or fifteen years ago.
            • In addition, the companies no longer need as many bookkeepers, accountants, payroll clerks, supervisors and other staff as they would if they were dealing with salaried employees.
                  2. The second is power.
            • I'm not going to give you a long list on this one. The simple fact that a cab company can cancel the lease with the driver at any time for any reason what-so-ever or no reason at all, the fact that there is no such thing as an unjust firing, gives the companies almost absolute power over their drivers.
            • And you know the old saying, "Power corrupts and absolute power corrupts absolutely." Never truer than in the taxi business.
            Taxi Company Scams

            In over 25 years of attending meeting about cabs, I've never heard the hidden realities of the taxicab business seriously discussed and hardly ever even mentioned. I think it's time. We're trying to set up the business on a new footing. It's time to talk about our dirty little secrets.

            I've thought of naming names but I'm already looking for motorcycle cops in my side and rearview mirrors, I don't particularly want to see a fleet of hybrids behind me. Besides, certain corrupt practices are so widespread in this industry, it would be almost rude to point out one person instead of another. Instead, I'll just take a tactic from Hansu Kim and say, "everybody knows" that what I'm saying is true.

            The major corrupt practice in this business of course is enforced tipping. As far as I know the only taxi companies that don't force their lease drivers to tip are Metro and Green Cabs.

            I'm not talking about the scenario where a driver slips a dispatcher a ten or twenty for a long ride but the fact that a driver has to tip five dollars in and five dollars out plus two dollars for the gas man just to be given a car to drive. In other words, if the official gate at a company is $100 per shift, the actual gate is $112 per shift.

            This is the way that it has worked at every company I've worked for; and any driver who refuses to tip as required will be given bad, often dangerous, cabs to drive or won't be able get out when he or she is scheduled.

            With good reason. Dispatchers, people answering the phones and other office personnel are paid minimum wage by the companies with the expectation that the rest of their pay will consist of tips from drivers. If they let one driver go without paying the whole system would eventually collapse. Drivers who persists in not tipping will often find that their leases will be cancelled for some apparently unrelated reason.

            I expected to catch flak for writing this piece but I'm already getting criticism before publishing the post.  My proofreader asks, "How do cab companies force drivers to tip in and tip out? I have only known three drivers who refused to give anyone a tip ... and they got shit cabs and shifts but ... their leases were never cancelled.

            How can I respond? How about with two blasts from the past? (I should point that these stories are from 15 or 20 years ago and Desoto is now under different management).  Alleged Tipping and More Alleged Tipping. If being giving bad shifts and dangerous cars to drive doesn't fit your definition of "forced", would "extorted" be more precise? In any case, two managers at two different companies told me, not only that I should tip, but how much. Their point was clear enough to me.

            We're not talking chump change here. I know one dispatcher who used to clear $400 a shift. Industry wide, the lowest figure I can come up is the ridiculously, absurdly low number of $10,000,000 a year in revenue from "forced" tipping.

            Over the years various other scams have been forced upon the drivers by one company or another.
            • Some companies have forced their drivers to buy overpriced gas at company pumps.
            • Back in the days when it was legal for cab companies to ask for insurance deposits, at least one company used to take the deposit if there was an accident regardless of whether or not their driver was at fault. If the driver complained, his or her lease would be cancelled.
            • The latest scam is for companies to illegally pass credit card charges on to their drivers. At least one company is making the drivers pay 10% of the charge when it only costs the company less than 5% to process the cards. I guess you could call that a value added tax.
            "We all know" that there are more scams of various kinds but I feel no need to list them all here. Corruption is part of the culture of taxi drivers under the lease and it will remain so unless, or until, drivers are given back their legal rights.

            Next: Why the lease is dysfunctional.