Hayashi Once Again Becomes Director Of Taxis

Athough there has yet to be an official announcement, Christiane Hayashi is now listed as the Director of the SFMTA Division of Taxi & Accessible Services.

Director of Transportation Ed Reiskin, who is solely responsible for the decision, is to be commended for taking his time, studying the situation and making the right choice.

Ms. Hayashi has been a controversial figure and the object of numerous misguided personal attacks.

Hayashi was demoted from Director to Deputy Director in September of 2009 by Reiskin's predecessor Nathaniel Ford because she refused to endorse the schemes of former Mayor Gavin Newsom and MTA Director Malcolm Heinicke (see below).

The taxi industry should also be given more power and respect as a result of her promotion.

The City vs Cab Drivers 3: Newsom & Heinicke

Looking back at my posts, I see that I don't really need to write much that's new to summarize the pre-Pilot Plan era. A few older posts should be enough to give my thoughts on the subject. See:

Millionaire Mayor’s Plan to Bail Out San Francisco by Soaking Its Cab Drivers: Part 1,  Millionaire Mayors Plan to Bail Out San Francisco by Soaking Its Cab Drivers: Part II and Mayor Newsom's New Plan to Soak the Taxi Industry.

Please accept my apologies for any repetitions and typos. Back then, I didn't have retired driver Paul Harting (who has graciously volunteered) to do my proof reading for me.

For comic relief you might also check out Gavin - the Sun King? and The SFMTA's Plan to Breed Cab Drivers. These pieces were supposed to be satirical but ... I now wonder if it was merely reality mocking us?

Exaggerations aside, former San Francisco Mayor Gavin Newsom and SFMTA Director Malcom Heinicke have come up with a new way of exploiting cab drivers - what really amounts to a new governmental philosophy. Previously governments, local or whatever, have either regulated taxis with minimal interference or, if liberal minded, would make sure that the drivers were treated fairly.

This latter attitude fled San Francisco along with the taxi unions when they were broken over thirty years ago. Since then taxi companies have cheated their "Independent Contractors" out of millions with impunity. Despite being repeatedly told about this, local officials have ignored the issue until recently.

The Newsom/Heinicke insight was to realize that, without unions and the legal protections that come with being an employee, a local government agency could take money away from cab drivers even more easily than the cab companies; and they could do so legally ... or not?

One perhaps can envision an "aha" moment, an Epiphany, when the two, not-quite-so-young legislative Turks looked at each other, whispered "income streams," shouted with glee and high five'd ... or perhaps not?

Not that taking advantage of the powerless of cab drivers is unique. Let's face it. We're second and third class citizens everywhere. We're considered lowlifes worldwide. The effects that government policy might have on cab drivers is not generally considered important.

In most of the world, however, the main abuse of cab drivers has been though one form or another of taxicab deregulation. Depending upon how it's done, this can result in lowering driver income and undermining  the value of taxicab medallions - usually hurting service at the same time. Willie Brown's releasing of 500 medallions as the country was going into a recession in the late 1990's remains a perfect example. It could be argued that driver income is still being undermined by this on slower shifts. (For an excellent study of deregulation see - Taxicab Deregulation: International Comparison.)

Whatever the results, the motivation for putting out more cabs primarily has been to improve taxi service for the public.

 Newsom and Heinicke, on the other hand, have been interested solely in using cabs to pay the City's bills. Whatever the rhetoric they may have engaged in, the idea of improving cab service by siphoning off a huge percentage of the taxi industry's profits was, and is, preposterous.

City Slapps Taxi Company Owner

In March 2012, Gratchia Makarian, owner of Speck Cab Co. d.b.a Arrow/Checker Cab, sued the City of San Francisco, the San Francisco Municipal Transportation Agency (SFMTA) and Deputy Director of Taxi Services, Christiane Hayashi (photo). Using a spaghetti against a wall approach, Mr. Makarian alleged more than a dozen different violations ranging from denying Speck representation on the Taxi Advisory Council to engaging in “unlawful inspections” and investigations because of ethnic prejudice against Makarian. 

On June 19, 2012, the Superior Court of the State of California ruled in favor of the defendants. Specifically, the Court concluded that the Speck complaint was a “SLAPP Lawsuit.” 

For those of us who aren’t lawyers an explanation seems in order.  “SLAPP” is an acronym for “Strategic Lawsuit Against Public Participation” which is a lawsuit that is intended to censor, intimidate or silence critics so that they abandon their criticism or opposition. In other words, the Court found that Makarian had filed the complaint in order to stop Hayashi from investigating him.

If the person being sued convinces the court that the lawsuit is intended to intimidate, the “SLAPP” law requires that the lawsuit be dismissed and that the person who filed the lawsuit pay the legal costs of the defense.

In this case, Judge James J. McBride of the Superior Court wrote in his ruling,


“The Court denies the Anti-SLAPP motion as moot because plaintiffs dismissed the action. The Court concludes that the complaint is a SLAPP and awards $5,637.50 in fees to defendant City and County of San Francisco.”

Endemic Corruption.

Industry insiders broke out laughing when I first told them about the suit. Why?

How shall I put it so that I don’t get sued myself? To say that corruption is widespread in the taxicab business is like saying that my Irish relatives occasionally drink. Taxi companies make tens of millions of dollars a year from, among other things, forcing drivers to tip and pay illegally high leasing fees. There are three San Francisco cab companies - Green, Metro and Desoto - that DO NOT engage in such practices. No one in my presence has ever alleged that Gratchia Makarian has any connection with those three companies.

Who is defaming who?

In the complaint Makarian alleged that Hayashi and other members of the SFMTA had “defamed and discriminated against Speck because of Makarian’s national origin” and “perpetuated rumors that the Speck owners are part of Russian organized crime.”

In an interview with The Bay Citizen Makarian said ,“It is an extremely stupid allegation because I am Armenian ... “I have never been involved in any crime related to organized crime. I have a clean record.”

I found Makarian's allegations and statements interesting for a couple reasons: 

First, Ms. Hayashi is among the least likely people I've met to discriminate along racial or ethnic lines. 


Hayashi is currently taking time off to work as a volunteer interpreting for master Cuban percussionist, Lazaro Pedroso (photo left). She tells me she has been using her spare time to translate books he has written because, she says, "he deserves to be recognized in the English speaking world for his work in preserving Afro-Cuban religion and culture."


She has also worked as a volunteer with indigenous Mayan peoples in Mexico and speaks Japanese after living in Japan for several years and majoring in Japanese.

Second, rumors of Mr. Makarian’s supposed mafia ties are rife in the taxi industry, although I’ve never actually heard anyone say that he was a gangster. One person who gave me some details about Makarian's business practices did not want to go on record because  "Gratchia might belong to the mafia.” Other people have asked me, “Do you think Gratchia belongs to the Russian Mafia?” 

I put the same question to Hayashi a couple of months BEFORE Makarian filed his suit against her. The Deputy Director  told me that there was a difference between Russians and Russian speakers. She said that “Makarian was an Armenian who spoke Russian.” She concluded by adding, “just because somebody speaks Russian does not make them a member of the Russian Mafia.”

Let me repeat - this was months before Mr. Makarian accused Hayashi of claiming that he belonged to “Russian organized crime.”


Running a bluff.

Zusha Elinson in The Bay Citizen wrote that Makarian fancies himself a poker player who views the cab industry like a game.

“You have to read people and you have to know how people are coming at you,” he told Elinson.

Playing on this theme, an informant, who of course wishes to remain anonymous, suggested that Gratchia Makarian himself might have started the gangster rumors. Why not? Making cab drivers sign "independent contracts" leaves taxi company owners unfettered by labor laws or unions. They have the power to fire a driver without notice for any reason or no reason at all. Half of them strut around like Mafioso. Pretending to be a real thug would give Makarian an edge up in his game.

It might also have helped him to read the law more carefully so that he knew what game he was actually playing with Hayashi.

When the City Attorneys led by Leila K. Morgan filed an Anti-SLAPP motion, Makarian folded his hand and pulled back the complaint.

However, unlike most American laws, the Anti-SLAPP statute assumes that, if the plaintiff withdraws the complaint after the defense alleges that the only purpose of the action was to intimidate the defendant, the lawsuit was not legitimate. Not to answer an anti-SLAPP motion is an admission of guilt and the plaintiff must pay for the defendant's legal costs.

Makarian’s bluff did shackle the SFMTA’s investigators for a few months. But, in the end, it gave the agency legal and moral sanction to continue its fight against taxi company corruption; not to mention the $5,637.50 Makarian has to pay for the his losing hand.

Single Operator Permits Hit the Streets

Dave Schneider, who is the thirteenth driver to be issued a Single Operator Permit (SOP), stands next to his taxi.

Schneider has driven cab for over thirty years in San Francisco but never put his name on the Waiting List. He sees these permits as correcting an injustice in the original Prop-K legislation. (For more of his thoughts on the subject see the end of the post.)

Dave seemed so excited that he reminded me of a fifteen year old who had just bought his first car and was trying to be cool. He says that he intends to drive Saturday, Sunday and Tuesday nights so that the other drivers of the cab will have some decent shifts. It's the first time in his career that he's had the choice to work when he wants.

The Evolution of an Idea into Reality.

The idea of "Peak Time" taxis has been around for at least as long as Schneider's been driving. It was given new life by driver and blogger John Han who first proposed "Single Operator Permits" during a Town Hall meeting a few years ago. Deputy Director Chris Hayashi liked the idea and ran with it. Why? It offered a solution to the eternal San Francisco problem of too much business at certain times and too little at others.

Han, Hayashi and others at the meetings originally proposed that the SOPs should be owned like an affiliate by a single driver who would be allowed to work a maximum of 60 hours per week. There would be no designation of what hours the driver should choose but it was assumed that he or she would naturally self-select to work busy times like Friday and Saturday Nights or conventions and avoid the slow times.

During the Town Hall meetings in the spring of 2011, the concept was modified. Hayashi thought that SOPs would be a good way to reward drivers like Dave who had not put their names on the List but nonetheless had driven cabs for 20 or 30 years. It was pointed out that older drivers might not want to put in 60 hours a week so the possibility of a second driver to share the cab was added.

The SOP's happened to mirror a longtime plan of SFMTA Director Malcom Heinicke for "Peak Time" taxis. The main difference was that Heinicke wanted the cabs to be driven at fixed times. There was some back and forth between the Director and the people at the Town Hall meetings. The argument that peak times actually fluctuated and changed with conventions, sporting events and so forth carried the day and 50 "Single Operator Permits" were approved by the SFMTA last summer.

The Current Plan: A Different Kettle of Fish.


The SOP's have morphed into a very different program.

1. They now have a single permit holder and will be run as gates&gas instead of affiliates.
2. The vehicles will be run for 90 hours instead of 60.
3. The vehicles will be bought and owned by color schemes.
4. The color scheme must be able to produce electronic trip data.
5. The color scheme will fill the shifts that the permit holder doesn't drive.
6. All conditions that apply to a regular medallion will apply to these permits.
1. The permit holder must drive 800 hours per year.
7. The permits are for a term of three years with an option to renew for three years. 
1. The permit holder and the SFMTA both have the right to reject renewal.
2. If the permit isn't being used properly, the MTA can terminate at any time.

What Happened?

I interviewed MTA Investigator Mike Harris who is running the program. He said the changes were made because:

1. None of the older drivers wanted to buy the cars themselves.
2. None wanted to work as affiliates or choose their own drivers.
3. The hours expanded from 60 to 90 hours because the cab companies complained that they couldn't make a profit at 60 hours.

When I pointed out that this defeated the purpose of the SOPs, Harris disagreed. He said that most of the old school drivers didn't want to drive at peak hours. They wanted to drive Sundays, Mondays or Tuesdays and leave the busy hours (along with the drunks) to younger drivers.

One Beauty of the Taxi Business ...

... is that if you do something for one group of people everyone else complains.

1. Company owners and managers don't like the SOPs because they think that they won't be profitable enough.

At Green Cab, Treasurer Joe Mirabile said that he didn't know how they were going to make money off the SOPs. On  the other hand, Green didn't have to buy new cars for the first two permits that they put out because the company recently lost a couple of medallions. All they had to do was invest in a new paint job.

Desoto Cab owner Hansu Kim said that the SOPs would make little or no profit.

"They should either have put them out with one driver/owner for the 60 hours or just given the older drivers regular medallions," he added.

However, he also said that he would pay $1,000 a month to any Single Operator Permit holder who ran the taxi through Desoto.

2. Non-medallion driver and TAC member Tone Lee, who had strongly supported the original plan of one or two drivers and 60 hours, is very upset by the expansion to 90 hours.

I ran into him at the Mariott Marquis on Thursday and he talked about how slow it was on a night that was supposed to be busy and predicted that the SOPs would have devastating effect on the Monday night business. He also thought that it was unfair to give out the permits by A-card seniority rather than to people on the Waiting List and he feared that the permits would eventually be turned into full time medallions.

Of course Tone has a right to his opinions but I think he's wrong on one of his complaints.

He said the MTA was giving the permits to former medallion holders who had already sold their medallions.

I put the subject to Mike Harris who said that two former medallion holders had applied but he turned them down. He added that allowing former medallion holders to get permits, "was not the plan and is not the plan."

He said that anybody who knew the name of a former medallion holder who was given a SOP should contact him at (415) 701-5493.

If you don't feel comfortable talking to Mr. Harris, you can send the name to me and I'll pass it on.

Lee is organizing a protest for the MTA on Tuesday July 17th at 1 PM. Refreshingly, he's asking the drivers NOT to drive around City Hall and NOT honk horns. He just wanted drivers who are upset by the SOPs to show up and speak.

If you're in favor of the SOPs, you should also show up and say your piece.

My Take

I have mixed feelings. Like Mr. Lee I liked the original plan - especially the 60 hour limit. But, I also like the idea of rewarding older drivers who have driven for years but aren't eligible for an earned medallion. Besides, 90 hours is 50 or 60 hours less than cabs are ordinarily driven. This means that drivers stuck with the really bad hours are unlikely to see much new competition.

I sympathize with the drivers who didn't sign up on the List because the only reason that I put my name on it was that I was living with a woman who used to greet me every morning by bitching,

"Did you put your name that list yet?... No! ... Boy are you stupid!"

I finally caved just to shut her up. If I hadn't had the good/bad luck to be hooked up with this Harpie, I'd be in the same situation as Mr. Schneider. I'm happy that these guys are finally getting a little something after all the the contributions they've made to the business.

As for the people on the List ... well, unless the MTA screws them (not a possibility to be discounted) in the final plan, they should be able to either earn their medallions or buy them.

I don't like the expansion of the hours but I think that fifty cabs added on Monday or Tuesday peak times aren't a real problem. Increasing the fleet by 3% isn't going to break anybody's bank.

The real reason that it was slow on Thursday (and almost every other day) are the hundreds of illegal limos and taxis either racing us down the streets or bribing doorman so they can steal our fares. My number one priority is to encourage the City and the MTA to stomp on them - while our medallions still have some value.

In the meantime, congratulations to Dave and the others.

Dave Schneider	10:45 AM (19 minutes ago)
to Dave

I'm appreciative to the SFMTA and also to Chris Hayashi who I heard was one of the prime architects of the single operator medallion.  It seems to me it CORRECTS AN INJUSTICE IN THE ORIGINAL DRAFTING OF PROP K by then Supervisor Kopp. The way Kopp wrote it and, as amended  by Daly Ma and subsequent legislation,  DID NOT CREATE A TRUE SWEAT EQUITY BASED CRITERIA for medallion qualification - you had to sign up in addition to doing the work.     But many worker drivers didn't sign up for whatever reason and, while there may be some truth in "you snooze, you lose," still they did THE REAL WORK carrying thousands of passengers, driving lots of hours, shifts and miles.     They did the work by the seat of their pants.    Now with the single operator medallion, there's a chance the working poor might be able to move into at least the lower middle class and even pay off a few bills in what remaining time remains for these often elderly and impoverished drivers for whom the so called American dream has been, more often than not, a real social and economic nightmare.    In one San Francisco appellate court decision awarding cab drivers workers' compensation, the court compared cab drivers to sharecroppers working in the fields.    Today the taxi worker struggle in many fields continue and the the single operator medallion is one drop of welcome rain in the parched taxi driver fields.  Not only single operators, but all drivers should have fair working conditions, real wages and benefits beyond "independent contractor" poorhouse status. Dave S.

The City vs Cab Drivers? A Micro History 2

I stopped involving myself in taxi politics from the Feinstein era until the Newsom era. There didn't seem to be much point.

During this period, when I come in to renew A-card every year, a woman would glare at me and say, "You're lucky to be a cab driver in San Francisco!"

About the third year I finally, truthfully replied, "And, San Francisco is lucky to have me as a cab driver." I could tell by the expression on her face that I'd been wise to get the A-card before I'd said it.

One night, I took a break and returned to my cab to find that some drunk, who claimed to be the head of the Taxi Detail, had stolen the medallion out of my cab and was writing me a citation for not having it in the front window - from where he had stolen it. I immediately understood that the city was going through another period of Taxicab Reform. It happened with every new administration. The new mayor would put more taxis on the street and the cops would reform the industry by hassling cab drivers for a couple of weeks.

This had little or no effect on service but it always played well with the San Francisco voters - who appear to have a collective IQ of around 53. They like things simple and the simple arithmetic is that more cabs automatically means better service.

The problem is that it's based on a false assumption ... namely that the job requires no skill.  I'm sure, for instance, that Mayor Willie Brown (photo) thought/thinks that if he (God Forbid!) stepped behind the wheel of a cab he would be just as good or better than an experienced taxi driver. Sorry Willie but it takes about three years to make a good cab driver.

Whenever San Francsico puts out more taxis, they flood the city with newbie drivers who hang out at hotels and SFO. From the standpoint of service, experienced drivers, are worth four or five of these rookies.

In 1997, Mayor Brown upped the ante by calling for 500 more cabs. He also improved the dog and pony shows by creating the "Taxi Task Force 1997-1998" to study Taxicab Reform. To be fair, this group actually recommended a few things: in-cab security cameras, the creation of the Taxi Commission, gate control and of course putting the Da Mayor's 500 cabs on the street.

Unfortunately, the dot.com economy began to tank just as they began adding the cabs to the fleet. Coupled with the effects of the 911 attacks, this created an excess of taxis that almost drove at least one cab company into bankruptcy. The full 500 cabs weren't completely put out until 2006.

There could be a cautionary tale here.