Thursday, January 12, 2012

Two More Plans

Charles Rathbone of Luxor Cab came up with another outline for a plan.

He started out by stating that the Medallion Sales Pilot Program has been an unqualified success. He claimed:
  • It has benefited both sellers and buyers.
  • It has given drivers on the waiting list two options instead of one: they can now buy or wait for a medallion to become available.
Rathbone wants to see;

 A Permanent Medallion Sales Problem

1. All medallion holders would be able to sell.
     a. Purchasers would initially come from the waiting list.
     b. At some point all drivers with five years of experience would become qualified to buy.

2. Several hundred medallions would be given to drivers on the waiting list.
     a. Charles envisions about 75 medallion a year being released.
     b. The list would eventually end.
3. The MTA would lease a certain number of "non-medallion permits" to "full-service color schemes."
     a. Rathbone tried very hard to avoid using the phrase but they would be "fleet taxis."
     b. He would probably define a "full-service color scheme" as Luxor, Yellow and Desoto cabs.
     c. The fleet taxis would be leased for periods of three or so years.
     d. The leases could be withdrawn if it was determined that there were too many cabs.

Service and Fairness ...

... is the the title that Rua Graffis, long time driver and United Taxicab Workers perpetrator, gave to her  conception of the future.

Graffis's plan is 11 pages of single-spaced type long and could only be briefly summarized during the TAC discussion. I'd like to do it more justice here but I'm going to China next week and need all my spare time to improve my primitive language skills.

So all I can do is list some main ideas and ask some question.

By the way, this points out another problem with the TAC. The council simply does not have the time delve deeply into complicated ideas and issues.

Rua's Plan.

There would be several different types of medallions.

  1. 100 corporate Ramp Medallions
  2. 800 Master (K) Medallions driven by gates and gas drivers.
  3. 800 Master (K) Medallions driven by Medallion holders.
  4. 186 Transferable Medallions.
  5. Pre-K = 300 now but the category would gradually disappear as the holders died off and their medallions went to make up part of ...
  6. 2000 Single Operator Medallions (returned K's).
Medallions would no longer be sold and all drivers from the various categories would pay amounts ranging from $750 per year to $6,000 per year into a Drivers fund.

The fund would be used for the retirement of all cab drivers.

What strikes me are the numbers. Potentially there could be almost 4,000 cabs on the street at the same time. This many taxis could turn a Friday night in October into a February Sunday morning. Coming from a woman who began her political career fighting against Mayor Diane Feinstein's attempt to add 289 cabs for the 1984 Democratic Convention, this raises nothing but question marks in my mind.

Ms. Graffis said that she wasn't good at numbers and at the end of her essay wrote, "Great care must be taken only to add medallions when there is a documented need. This is of particular concern since ..." the MTA which "... controls the number of cabs ... seeks money from the industry for its budget."

Rua wants the money that would go to loan companies to instead to into the Driver's Fund and retirement programs; and the Single Operator Permits would theoretically be driven only when it's busy. However,  the sheer volume of taxis that Rua envisions throws out any kind of rational thought for me. Except for New Year's Eve, these aren't figures that belong in San Francisco.

Or, maybe she simply expects all the K medallions to eventually become Single operator Medallions. It's hard to say.

Maybe this conundrum will be cleared up with a careful reading of her monograph. I'll tackle it on the return flight. Unless you were at the meeting, I'm not sure where you can get ahold of a copy. You  might be able to get more information by clicking on this UTW link.

Tuesday, January 10, 2012

TAC: Pushing for a Final Plan

This photo was taken toward the end of the 1-9-12 Taxi advisory Council meeting. Chris Sweis, Athan Rebelos, Richard Hybels, Rua Graffis and Tim Lapp are seen (sort of) tying to clarify a methodology for deciding how to organize the various plans (or parts of plans) for a making the Pilot Plan (or parts thereof) permanent - or not - so that the TAC could vote on the various concepts.

To be fair, this is a real problem. Director of Transportation Ed Reiskin has apparently asked TAC Chair Chris Sweis to come up with a permanent plan soon. Deputy Director of Taxi Services Chris Hayashi also told the MTA Board that she could present them with a plan in February.

BUT ... The last three or four meeting of the TAC have been taken up largely with new plans - mostly conflicting with each other - on how to structure the future of San Francisco's taxi industry.

I have a some thoughts on the subject.

1. I think it's better to the job right then to do it fast.

2. I do not think that the TAC is equipped to sort through the various ideas to find a solution. Because of the all the rules that the council has follow, it simply takes too long for them to deal with an issue. In a normal meeting they'll cover one or two subjects. The question of the future of the cab business is open ended and multifaceted.

3. The best method would be to have Ms. Hayashi use her famous white boards to deal with this subject at a couple or more Town Hall Meetings. She should be able to bring order out of chaos (as she has done so often in the past) and draw up a coherent plan.  The plan would then go to TAC for a final discussion and vote.

Sunday, January 8, 2012

TAC to Make Final Recommendations for Permanent Pilot Plan?

The question mark is in the title because the Taxi Advisory Council keeps threatening to make final recommendations and never quite seems to do so. In other words, I'll believe it when I see it.

The picture is of me when I first started taxi driving and was even hotter than I am now - if less friendly.

In honor of TAC's attempt at finality, I'm putting some of the proposals on the blog in posts below this one. (Please excuse the formatting.)

For comparison I'm linking to the Medallion Reform Proposal by the San Francisco Cab Drivers Association which I originally published on April 4, 2011.

I'm also linking to my own An Outline for Making the Pilot Plan Permanent which I published on December 18, 2011.

To make note of a few other proposals click below.

Mark Gruberg of the United Taxicab Workers Proposal

Sorry for the shadow on this shot. It's not symbolic. I don't mean to imply that Mark has a doppleganger or evil twin. Simply didn't have a diffuser on the flash.

For me, the most interesting thing about Mark's proposal is that he changed his position from the days when we were putting the Pilot Plan together. He was against any medallion sales at the time and even sued the MTA over the issue. But he lost and has shown rare common sense in accepting the reality of medallion sales and using it a jumping off point for a fresh look at the industry.

His plan is the most carefully worked out and thorough of the proposals that I've seen. It certainly has the longest title.

To read A Proposed Approach to Formulating
A Permanent Medallion System for San Francisco click below

Saturday, January 7, 2012

Carl Macmurdo & the MHA Proposal

The introduction and a chart at the end of this piece have been edited out for for reasons of length. You should be able find the complete proposal at  Medallion Holders Association website. If you can't find it, blame Carl not me.

Carl notes in the introduction that after a Taxi Commission ruling in 2004 stating that drivers have to meet a "full time driving ... requirement" forced many elderly drivers to "work beyond their capacity" which lead to: major accidents, liability loses, reduced service, lawsuits and at least two suicides.

He goes on to say that an American with Disabilities Act lawsuit was settled by allowing two disabled plaintiffs to sell their medallions under the Pilot Program. Macmurdo added that 150 taxi drivers have now purchased medallions under the program, thus making up 10% of the fleet.

To read Carl's Proposal for Future Taxicab Medallion Distribution click below.

Friday, January 6, 2012

Jim Steele's Legacy: Part 1

Happy New Year!  I'm baaaack!
Jim Steele leaves a double legacy behind him. Yellow medallion holder Art Lembke describes him as, “a little man who was a giant in the industry.” Richard Fogel says that “the taxicab industry today would not be the same had it not been for Steele." Fogel goes on to say that Steele “wanted to create the best place for owners, drivers and customers. And he was successful.”
I have no trouble with the earlier statements. Steele clearly was an astute and brilliant businessman. He took over Yellow Cab after it had gone bankrupt and, within a few years, turned it into the largest and most successful taxicab company in the city. There’s no doubt that he made San Francisco’s taxi companies and medallion holders lot of money. It’s the contention that Steele’s guiding hand was good for the ordinary drivers and customers that I intend to dispute.    
Since I didn’t like Steele personally and think that his leadership was disastrous for both drivers and the cab riding public, I’m going to balance my post by putting Lembke’s praise of Steele at the end of the article.
The Independent Contract and Gas & Gates.
A picayune debate has been taking place on cab sites as to who first started the above systems. I’m not an historian. But I do know that Steele, along with the Lazars at Luxor Cab and Marvin Gralnick at Desoto Cab, either broke or undermined unions, put an end to employee status by forcing drivers to sign “Independent Contracts” and installed “Gas & Gates” as the only option for a taxi driver.
Yellow Cab was the first major company to completely eliminate employee drivers and have all cabs go “Gas & Gates,” so why not give the credit to Steele?
The Independent Contract.
The “Independent Contract,” as it relates to non-medallion holding drivers, is a fictional legal device that has been used to cheat San Francisco's cab drivers out of at least 200 million dollars over the last 30 years.
This figure comes from estimating the amounts that cab drivers have been forced to tip during that period.
  • I cab with 2 shifts at $10 per shift = $20.
  • $20 per day * 365 days = $7,300.
  • $7,300 * 1,000 cabs = $7,300,000 per year.
  • $7,300,000 * 30 years = $219,000,000.
I’m using the 1,000 number as a rough average. There were 814 cabs on the  street 30 years ago and there are 1,500 now. Lazy me, I didn’t go year by year to research the matter accurately. The figure might be 1,100 in which case:
  • $7,300 * 1,100 cabs = $8,030,000.
  • $8,030,000 * 30 years = $240,900,000.
However, this is a low figure. Some companies insist on higher tips and many companies have used numerous other scams to separate drivers from their money.
In addition, these estimates do not include the money drivers have lost in terms of benefits like: unemployment insurance, the lower tax rates paid by employees and the loss of Workers Compensation benefits that cab companies refused to pay until they were forced to  do so by the State of California. Many of these drivers will also have little or no Social Security benefits when they reach old age.
A Fictional Legal Device?
There are numerous ways to determine whether people should be classified as employees or independent contractors. I think the most meaningful one is simply a test of power. An “independent contract”, as the first word implies, is supposed to be an agreement between equals.
The relationship between a medallion holder (which I am) and a taxi company is a perfect example of a real independent contractual agreement. I have a medallion that they want to use and they are willing to pay me for it. If we don’t get along, I can easily take my medallion and go to another company. 
In fact, I recently worked for a company where I said something to the manager that he didn’t like. He retaliated by breaking our financial agreement and started cheating me out of $15 a week (I kid you not). I gave him two warnings and then went to another company where they gave me a $300 per month raise. 
The fact that losing the use of my medallion cost the manager about $1,500 a month, by the way,  is yet more proof that having power doesn’t make you smart. He was apparently so used to abusing ordinary drivers that he didn’t think I’d leave.
Compare this to my situation prior to holding a medallion. I've always believed that a good dispatcher deserves a good wage and that his salary should be paid by the company for which he or she works. The reality is that companies pay their dispatchers minimum wage (if they pay them at all) and insist that the drivers tip to pay the the salaries - which go as high as $700 to a $1,000 per shift. As an ordinary driver I tipped about $40,000 over a twenty year period just to be able to work. 
Company reps are fond of saying that no one is forced to tip but this is a lie. If I hadn't been coerced, I wouldn't have tipped one-tenth of the above amount. All exceptions noted, if a driver doesn’t tip he or she will be retaliated against.
My experience when I stopped tipping at the old Desoto is hardly unique.
In the taxi business, the “Independent Contract” exists primarily to take the employee rights away from cab drivers. It strips drivers of all power. For Steele and his cohorts, the  “Independent Contract” was a piece of paper designed to make taxi drivers independent of all labor laws.
Of course, simply because people have the power to swindle somebody doesn't mean that they have to do so. Plato believe that power was best exercised by "benevolent dictators" who worked for the good of the many. But this idea that was obviously foreign to Steele and his pals. What they believed, along with W. C. Fields, is that you should "never give a sucker an even break."
When the  MTA outlawed tipping a few years ago Yellow Cab refused to comply with the law. Yellow spokesman Jim Gillespie argued that "tipping was part of cab culture." Sounds very sociological doesn't it? The “culture of tipping” actually started when the unions were busted and thus belongs to the culture of corruption that is part and parcel of Jim Steele's legacy.
Jim Steele According to Art Lempke

Jim Steele, a little man who was a giant in our industry. He was honest and fair minded, and knew more about the taxi industry than anyone before his time or since.
Jim knew the California code of insurance relating to the transportation industry by heart. Every word of it he kept in his head, and could quote any page of it by memory. Before he retired he knew every particular about every accident that Yellow Cab ever had. The amount involved in the accident, the driver who had the accident, and the passengers who were involved, and the amount paid out. This information he carried around with him in his head, and didn't need to look it up. He knew all this by heart.
In World War II Jim was the boxing champ for his weight class in the Sea Bee's. I remember fondly a night in a bar near De Soto Cab Company on Gary street when Steele was in his fifty's, a man came into the bar causing trouble, as we were involved in figuring out the process of buying of the Yellow Cab Co Op from the bankruptcy court, and playing liars dice. Jim Steele knocked out this trouble maker who was about 6'4" and weighed about 250 lbs with one punch.
For his distractors who blame him for bringing an end to the employee status to the taxi industry. They are both misinformed and wrong. Prop K effectively ended the employee status before Prop K, if one bought a medallion from someone they would also have gone into the cab company from the parson who sold them the medallion. This provided stability to the taxi industry. Prop K changed this. There is no way a taxi cab company could stay in business if they had employees rather than independent contractors who were their taxi cab drivers. As the medallion holders would leave a company who had employee drivers and go to a company where the drivers are independent drivers, as they would make more money being in a company that had independent contractors instead of employee drivers. Look! That's just the way it is! Myself, I made a lot more money as an independent contractor than I did as an employee. Also, as an employee driver you are told what to where, when you can take your lunch and dinner breaks, where to go, etc... I believe that most drivers who worked under both systems preferred to be independent contractor's. I remember one time I was forced to stay near the S.F. Zoo for over two hours before I was allowed to leave, as an employee at old Yellow Cab. I would have never stayed in the taxi industry as an employee. 
Shortly after Prop K was passed there was a certified election held at the Yellow Cab Co Op for the drivers to choose between being an independent contractor or an employee. The drivers overwhelmingly chose to be independent contractors. So don't blame the loss of the employee status on Jim Steele.
I served on the board of Directors of Yellow Cab Co Op with Jim Steele for thirteen years. Although I had some miner disagreements with him, he was usually right. He was the most honest and straight forward man I have ever met who put his whole heart and soul into the taxi industry. I am a far better person for the time I spent with Jim Steele. Thank you Jim for all you did for all of us in the taxi business. May the Lord take you in his arms and may you find peace and happiness in Heaven. 
Sincerely Your friend Arthur Lembke, and family.