Friday, January 8, 2010

Hayashi's Reform Plan - Some Thoughts

I think it's time for me (photo) to make a few comments.

Taxi Director Chris Hayashi's plan is the only one to fully address the two major problems created by Prop-K: the lack of an exit strategy for aging drivers and fairness to people on the waiting list. The other plans have favored one group at the expense of the other.

The auction plans put forward by Mike Spain and others would certainly take care of the aging medallion holders but screw the people who have been waiting on the list for 10 or 15 years.

Contrary to their claims, an open auction would be totally unfair.
  • It would reward the people with the most money.
  • It would disregard length of service.
  • It would callously disregard people who had chosen to stay in the cab business rather than do other things because they were promised that they would be rewarded for continuing to drive a cab.
  • It would destroy the pool of professional drivers.
The plan put forward by the UTW and Mark Gruberg, on the other hand, might (or might not) help people on the list but it would screw the aging medallion holders. Of course Gruberg might say that these drivers should have saved enough money to take care of themselves. But first - what it their plan?

Rhetoric aside, the UTW has had one plan for the last 10 or 15 years: namely that medallion holders should sacrifice from 15 to 50 percent of their incomes to pay for the benefits, including retirement, of all drivers.
  • I would agree that Pre-K medallion holders and the drivers who picked up their Post-K medallions "for free" 30 years ago certainly should have been able to fund their own retirement plans by now.
  • But what about drivers who worked 15 years to get the medallion? Their medallions were not free. Shouldn't they be able to profit from their hard work? Would they have waited 15 years for $1,000 per month? I wouldn't have.
  • I think that Gruberg's plan would put an end to professional drivers just as surely as Spain's plan would.
  • It would more or less eliminate The List because few people would want to be on it.
But this is philosophy. The main problem with the UTW plan is that the same problems would remain intact that we have now: there would be no real exit strategy and The List wouldn't move any more quickly.
  • The retirement plan put forward by the UTW either could not be realistically funded or would be too small to realistically retire on.
  • Whether they should have saved their money or not, the aging drivers would want to hang onto that medallion.
  • They would be driving at 75, 80 and 85 years of age and, since they'd be earning 15% to 50% less income than before, they'd probably have to drive longer hours.
  • Or, the drivers physically too old to drive would be fraudulently claiming that they were driving - just like they are now.
  • A draconian purge, aside from being callous, would probably only net 200 or 300 medallions.
  • Once they were put on the street, you'd have the same situation that you have now.
  • Nothing would be changed except that the medallions would be worth less money.
The major problem with Gruberg's thinking is that (instead of getting money from unions or companies as most benefit programs do) he wants to fund his plan with huge taxes against a group of people who don't make that much money to begin with.
  • Medallion holders make about half the money that an experienced bus driver does.
  • They make about one third less than the average person working in San Francisco.
Drivers who became medallion holders under his plan would make tens of thousands of dollars less over the course of their careers than they do now.

And for what? Benefits they might never use and retirement funds that wouldn't be enough to retire on.

Hayashi's plan, on the other hand, would create money for a Driver's Fund by taking a percentage from the sale of medallions.

I'm not sure if Hayashi's plan would actually be fair to people on The List or not. Would it move faster? Would the people high on The List get medallions in a timely manner or not?

She says that it would - that she would do things to make The List move.

It's an experiment. I don't see how anybody would be much worse off by trying it than they are now. By the end of the year, we should have an idea as to whether the experiment has worked or not.

By the end of the year, the aging driver problem should at least be solved. Then we can go on to dealing other problems.

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