This is what you might call the missing context for the debates. There are several things to be said about this.
1. In my 28 year cab driving memory, this is the first time that a gate increase did not accompany a meter increase. They have usually been raised simultaneous. One company I worked for inflated the gates before the meter went up.
2. If you assume that half the cab rides are paid by credit cards (way high) this means the 5% credit card fees = 2.5% of a taxi driver's gross (it's really more like 1% or 2%).
3. This means that the actual gain for drivers with the meter increase of 24% minus the gross credit card fee of 2.5% = 21.5%.
4. I once knew a cab driver who had a $200 ride and did nothing but bitch about how much money he spent for gas on the trip ... Hmmm. This seems like a non sequitur. Why do I think of it now?
Quid Pro Quo
John Lazar, President and General Manager of Luxor Cab, was telling people that not including a gate increase with the meter increase was an oversight and a sign of the incompetence of Deputy Director of Taxi Services Christiane Hayashi.
Nothing could be further from the truth.
The cab companies had been crying about their credit charges to Hayashi so she finally agreed to pass on the charges (at the same percentage as they were passed by most other cities in the country) on the condition that there would be NO GATE INCREASE going along with a meter increase. This was talked about at length and in detail at the Town Hall meetings last spring.
Furthermore, it was clear (to me at least) that the only reason the SFMTA Board did not to include a gate increase was because of the quid pro quo that Hayashi wrote into the legislation. In other words, there would have been a gate increase if credit card charges had not been passed on to drivers.
Let's do a litte more arithmetic.
1. John Lazar wanted an 8% gate increase - on top of the 5%. If this had been granted (and the main reasons that it wasn't were Hayashi's legislation and negotiation skills) 10.5% would have been taken from the 24% making the net raise 13.5%.
2. On the other hand, if the credit card charges had not been passed to the drivers, Lazar and his pals would have been pushing for 10% or 12 % of the gate. This would have worked out to net raises of 12% or 14%.
3. In other words, drivers are between 7% and 10% better off paying 5% credit card charges and having the gates controlled than they are under any other realistic scenario.
Note that I used the word "realistic." Some drivers will say the companies should eat the credit card charges and the drivers should continue with the same (or even lower) gates. Anybody can say anything but, in the world of real politics, that isn't going to happen.
It seems to me that the important factor is the bottom line - how much the drivers take home. And, in my opinion, we're better off with controlled gates.
Is the 5% Written in Stone?
Hayashi has been trying to find ways to lower that figure almost from the start. The board on the left is from a Town Hall meeting last May when lowering or eliminating credit cards fees was discussed.
Furthermore, Hayashi is one of the first persons to popularize the use of the Square (with a 2.75% fee) and other similar devices (although there has turned out to be problems with charge backs with some of these apps). And, as she pointed out to the Supervisors, there have been many legal and other changes in the last year that need to be studied that could result in lowered credit card fees.
There also are all kinds of legal, technical and social issues involved. Off the top my head, for instance, allowing cabs not to take credit cards might end up chasing business to Uber and other limo services. In fact, it already has. Having customers pick up the charges could have the same effect. Putting, say, a three dollar surcharge for credit card use might stimulate customers to stiff cab drivers on the tip - and so on.
Sounds like food for some more Town Hall Meetings.
Oh yes - I almost forgot. John Lazar inadvertently tipped his hand when he told the supervisors that he took in $1 million worth of credit card charges and paid out $40,000 every month. That = 4%, not 5%.
Sounds like 1% of wiggle room for Hayashi.