Friday, March 18, 2011

TAC 3-14-2011 Part 2

The rough draft of the TAC report on the Pilot Program was put together by Council Chair Chris Sweis (photo) after going through more than 12 hours of tapes. For this he deserves an award.

However, as councilor Carl Macmurdo and others pointed out, Sweis forgot to include Medallion Holders as one the four primary participants in the S.F. taxi industry. (A Freudian slip? Sweis wouldn't be the first owner of a taxicab company to wish that medallion holders would disappear. ) The Chair admitted that it was an oversight and promised to include a section on medallion holders in an amended draft at the next session.

As for the rest, I simply want to deal with a few points of the draft. You can read the full text in TaxiTownSf.

The discussions at TAC were mostly about the effects on Taxi Companies and Drivers on the waiting list.

1.The major effect on companies was the change from Gates and Gas to Affiliate Leases.
  • In 2003 there were few cabs operated on as Affiliates.
  • By 2010 more than half the taxis were affiliates.
  • 56% of the medallions purchased during the pilot program have chosen to become affiliates.
Sweis and others see this as a negative.
  • G and G operations, according to Sweis, "provide greater control over vehicles and drivers."
  • Loss of G and G medallions "will reduce company revenues and quality control."
  • Companies are losing taxis to Affiliates.
  • Experienced drivers are losing good shifts when Affiliates replace them with less experienced drivers.
  • Which "would lead to a decline of taxi service to the public."

Driver Tone Lee (photo) disputed this claiming that Affiliates and LTLs did a better job because the drivers worked harder and took better care of the cars that they, themselves, purchased.

Gratchia Markanian, the head of Checker Cab, made similar points and predicted that all taxis would someday be Affiliates.

Hansu Kim (photo), on the other hand, who has been strongly in favor of Affiliates, reversed his position and said that taxi companies needed gate and gas arrangement to be profitable. Coincidentally, Kim recently purchased Desoto Cab.

Councilor John Lazar of Luxor Cab said that the frozen gate rates had "killed gates and gas" arrangement. He also said, as he's said before, that new buyers couldn't afford to work under gate and gas because their loan payments were too high.

I have a few problems with these arguments - namely that neither one of them appears to be true.
  • The payments on a 15 years loan are $1,798 per month. The lowest amount that a GG medallion holder is paid is $1,800 per month and the highest is $2,400 per month. In addition a medallion is worth $5,000 to $10,000 per year in better shifts etc. What can't they afford?
  • If the cab companies are so strapped for cash, how come they are engaging in medallion bidding wars?
Companies are currently offering bonuses as high as $5,000 and medallion payments as high as $2,400 a month to wrest medallion away from each other. If they're so broke, where are they getting the money for their campaigns?

In the end, they passed a motion by 10 to 4 to have all cabs that are awarded to drivers on the list to be worked as Gates and Gas for the first three years.

Next: The effect on Drivers.


  1. Re Sweis's remark that "Experienced drivers are losing good shifts when Affiliates replace them with less experienced drivers," it should be realized that this is precisely what sale of medallions guarantees to the system, since buyers are not as certain to have the experience of people who have waited and driven through their waiting time.

  2. Nobody likes "affiliates" but they all bend over backwards to get them under the tent. Some companies probably make no more than $200 a month on an "affiliate" and engage in rule breaking and uninsured risk galore for a lousy $200.
    A driver assaults somebody and the co. is facing a lawsuit. They may win but they will pay plenty to win.
    Every cab is required to begin and end the shift at the co. as well as be parked at the co. when it is not in service.
    MTA will not change the rules or enforce them. Nobody ever lost a dime in this business gambling on a lack of enforcement.
    Is there anybody that DOES NOT know a medallion holder that has not driven in years and has not been caught?