Friday, November 30, 2012

The 200: What Are They Really Getting?

The top 200 on the Waiting List will be eligible to buy (or whatever arcane verbiage the SFMTA uses) a medallion for $150,000. These drivers will then be able to turn around and sell (or other abstruse verbiage) it for $300,000. This would leave them with $150,000 minus $60,000 for a 20% transfer fee on the $300,000 or $90,000.  ($300,000 - $150,000 = $90,000)

The San Francisco Federal Credit Union will wave the usual 20% downpayment fee and the terms of the loan can be for as long as 30 years. This would work out to payments of about $850 per month. At the moment most companies are paying $2,500 for leasing a medallion from a medallion holder. This would give the (we need a new name - "Last of the List"?) holders a profit $1,650 per month or $19,800 per year. And, this doesn't include the pluses like getting the best shifts and not having to worry about being fired.

On the negative side: In the unlikely event that they actually kept the medallion for 30 years, they'd double the cost of the loan. On the other hand, they'd also have made about $600,000 during the same period.

Is this good deal? As my uncle Victor might say, "It's better than a slap in the belly with a wet fish." It's certainly better than being number 201 on the List.

My poster boys William Mounsey #82 (top photo) and Brian Rosen #50 were breathing big sighs of relief when I spoke to them. The both had been sure that they would get nothing. Rosen calculated that that he could pay off the loan in five years and he'd have $240,000 to retire on.

I also spoke with number 300 on the List. I told him that he might be able to get one because about one-third of the people in front of him would be ineligible. He responded by saying,

"I'm so disgusted by the whole thing that I don't even want one."

Monday, November 26, 2012

MTA Kills "Earned" Medallions: Waiting List's Top 200 Can Buy for $150,000

On Tuesday, 11/20/2012 the San Francisco Municipal Transportation Agency (SFMTA) ended a 34 year old program that rewarded cab drivers with a medallion for signing up on a waiting list and driving a taxi for 10 or 15 years. There was no arrangement like it in the country and probably not in the world. Its like is unlikely ever to be seen again.

For experienced SFMTA Board watchers the List's demise was a foregone conclusion. The Board has been making all its decisions behind closed doors for the least six months. Its members apparently have neither heard of the Sunshine Ordinance nor the word "transparency." If they have, they either don't know what the words mean or don't care. They barely discussed the issues and the members where not individually asked to vote. At the end of the meeting, Board President Tom Nolan simply looked at his colleagues, muttered something like "that's it," tapped his cudgel and "free" medallions were dust.

Eloquent Speakers

There was a small turnout which surprised some people but I think it was a sign that most drivers had already taken the measure of the MTA and decided to save their breaths. However, the ones who did speak were eloquent. These included the usual suspects - Tara Housman, Brad Newsham, Barry Korengold, Carl Macmurdo, Tariq Mehmood - as well as several drivers who will be directly effected by the legislation. Peter Kirby, number 397 on the list, spoke of starting a ballot measure "to kick the SFMTA" out of the taxicab business. He can be reached at (415) 624-5967 or

Some drivers on the list spoke with anguish about how they had planned their lives around getting the medallion and how the loss of it would ruin their futures; about how it would be impossible to start over again in their 50's and 60's; about how it would become impossible for them to pay for their children's education.

Sonali Bose, Director of Finance and Information Technology (shown here with former MTA Director Nat Ford), who makes in excess of $200,000 a year, will get a city pension when she retires and helped calculate the amount of money that the MTA will take away from cab drivers appeared to find these displays of emotion and distress highly amusing.

"Bargain" rates for 150 medallions

The only agenda item that was really in play was whether or not the MTA would sell 150 medallions to the top 150 drivers on the Waiting List for $150,000.

It seems possible that the speakers may have had an influence on raising the number of drivers who would be offered the deal. Board member Christina Rubke, who appeared to be moved by the drivers' angst, made a motion to increase the figure to 200.

On the other hand, the rest of the Board OK'd the change so quickly and without debate that it looked like another detail that the members already had ironed out before they walked into their hallowed chamber.

Whatever. The end result is that 200 drivers on the Waiting List will be given an opportunity to purchase a medallion for $150,000 that they can sell for $300,000 minus 5% for the Driver's Fund and 15% for the the sticky-fingered MTA. In other words, if a driver bought the medallion and immediately sold it, he or she would turn a profit of $90,000.

No down payment will be required for the purchase and the new medallion holder can keep it and work it for as long as he or she likes - or until death.

Other News

The MTA Board's Vice Chairman Cheryl Brinkman said that she wanted to make certain that more funding would be given Taxi Services. A desire easily realized.

Taxi Services Director Christiane Hayashi said that will be beefing up enforcement.  She currently has four investigators and will soon be hiring four more.

Hayashi also said that she was developing a plan to use the Drivers' Fund to help lower payments on medical insurance for taxi drivers.

Coming soon: A post summarizing and commenting on recent MTA legislation.

Monday, November 19, 2012

Taxing the Lower Classes

President Obama recently won his election with a popular plan to raise taxes on the rich in order to help balance a budget that includes medical care for all citizens. In doing so, he put himself firmly in the Democratic tradition of Franklin Delano Roosevelt's "New Deal" - aimed at helping working people and the unemployed - and the "War on Poverty" of the Kennedys and Lyndon Johnson. 

San Francisco’s supposedly “liberal” Democratic politicians, however, appear to be suffering from dyslexia. They've declared war on the poor instead. 

Having spent several years criminalizing homelessness, they've recently moved on to cab drivers with a plan to take taxi medallions, that had been intended as a reward for drivers who'd worked and served the public for 15 or 20 years, and sell them to pay  down the city’s debt that has been partially created by under-taxing corporations like Twitter. As a result the politicians are effectively turning San Francisco’s taxi drivers, who make about $25,000 a year in a town where the average salary is $63,000, into the most heavily taxed group in the city, possibly the country. 

In addition to grabbing the medallions the City also intends to charge usurious fees for the transfer of a medallion. While New York takes a 5% cut, San Francisco wants from 15% to 33.33% to 50%. In addition, both cab companies and drivers are already paying high and rising business taxes and licensing fees. 

It’s ironic that much of these fees, including money which could go to giving pensions and benefits to drivers, would be used to pay for the benefits and pensions of city employees, many of whom make in excess of $100,000 or $200,000 and upward a year. 

What we here, then, is the opposite of a graduated income tax. Not only that but the amounts involved are humungous and unheard of. Obama only wants to increase taxes on the rich by 3%. This is so bizarre - at least in a democracy - that I don't know what to call it. Taking the racial and ethnic makeup of the majority of cab drivers into account how about, "Robbing the Hood?"

As some of you know, this didn’t just happen by accident. It is the brainchild of former Mayor Gavin Newsom and Malcolm Heinicke, who is currently a Director on the Board of the San Francisco Municipal Transportation Agency (SFMTA). As far back 2005, the pair targeted cab drivers for what Heinicke has called a “revenue stream.” 

However, this was impossible at the time. From 1978 until 2010, taxi medallions were not for sale in San Francisco. They were given out on the basis of one per driver, and the drivers could only keep them for as long as they kept working. In reality, this meant that the driver kept the medallion until he or she died, at which point it would then go back to the city and be given out to the next working driver on the list. Cab companies and medallion owners didn’t like this very much. Between 1979 and 2000 they put six different measures on the ballot to allow the sale of medallions—all of which failed.

In 2007, Newsom backed a ballet measure named Proposition A for “Transit Reform, Parking Regulation and Emissions Reductions.” Tucked away as a rider that wasn’t mentioned in the Voter’s Digest was a paragraph that gave the SFMTA the right to regulate the taxicab business, including the power to supercede  “all previously adopted ordinances.” The SFMTA intended this language to give the agency the power to do anything it wanted.

Prior to the election, Mayor Newsom had publicly promised, that under Prop A, taxi medallions would not be sold. After Prop A passed, Newsom proved himself a politician’s politician and reneged on his vow two months before the law even took effect. In January 2009, he presented a scheme to take all the 1,500 taxi medallions away from the drivers/owners and sell them at an auction to cover San Francisco’s $576 million debt. At the same time, he fought against a 1.395% tax on businesses, including businesses he owned himself.

Newsom caught heavy flack, backed off and set up a series of Town Hall Meetings to study “taxicab reform” under the leadership of Director Christiane Hayashi, who had been chosen to head the MTA’s new Taxi Services division.

Armed with a copy of "Getting to Yes: Negotiating Agreement Without Giving In," Hayahsi amazingly got an industry—where nobody ever agreed with anybody on anything—to compromise on a plan where some medallions would be sold for $250,000 with 15% going to the SFMTA and 5% going to a Driver's Fund. Older drivers were able to “retire with dignity,” younger drivers were able to buy into the business, and a waiting list was kept alive for aging drivers.
Newsom and Heinicke, not surprisingly, wanted to trash the waiting list and the Drivers Fund. But Hayashi somehow convinced them that what Heinicke would later call “appeasement” was better than lawsuits. Thus, a temporary agreement called the Pilot Plan came to be.

The Pilot Plan proved generally popular with the drivers and put over $20 million into the city’s coffers. Everyone assumed that, with a few tweaks, it would be would be enacted into law. Hayashi came out with a tweaked version that most drivers found acceptable. Heinicke, however, found it totally unacceptable and came out with his own plan that would give SFMTA up to 33.33% or 50% of sales in some cases, dilute the drivers fund and kill the waiting list.

Talk about shock and awe! The new plan meant that hundreds of cab drivers, who put in so many years of service, would have their future stolen from them to pay for the benefits of people who make five or ten times more money than they do. 

The drivers protested and the SFMTA backed off. Or maybe not. The scenario keeps changing. Maybe they’ll give out 100 medallions to the list before they kill it. Maybe they’ll give 50. Maybe they’ll give 25. The latest is that they won’t give any “earned” ones but they’ll let 150 drivers buy medallions for $150,000 a piece that they can then sell for $300,000. This means that the drivers will be able to retire someday in the second most expensive city in the country on $150,000 minus interest on loans to buy the medallions and about 25% in taxes

But word on the street is that Heinicke doesn’t want to give any money away. “The medallions are our assets,” he once said,” and we can do what we want with them.” But we don’t know for sure. Heinicke likes to do his planning behind closed doors in violation of San Francisco’s strict Sunshine Ordinance. As he put it in an earlier e-mail to fellow board members:

"... most of all we all need to come to agreement on this (the MTA's plan) as best we can BEFORE IT IS FORMALLY PROPOSED." (my capitalization)

“... we need to get our agreed plan and then sell the Mayor and the Supes."

"... Chris (Hayashi) is significantly limiting the revenue to the MTA and sending more to the amorphous Drivers's fund ... The MTA should get revenue. And, if we do not push for that, we are sacrificing the needs of the City to placate a few cab drivers."

In other words, Heinicke doesn't mind sacrificing the futures of several hundred cab drivers to pay off a debt that they had no hand in creating.  An idea apparently backed by Mayor Lee and the Board of Supervisors - Democrats all.

FDR, Lyndon Johnson and the Kennedys must be turning in their graves.

Thursday, November 8, 2012

S. F. Board of Appeals Rejects UTW Appeal

On Wednesday, the San Francisco Board of Appeals turned down Mark Gruberg's and the United Taxicab Worker's (UTW) appeal to have the Board decide if the San Francisco Municipal Transportation Agency (MTA) has the right to lease a 150 taxi permits to cab companies.

The only person on the Board who was important for these proceedings was President Chris Hwang (photo) who had missed an earlier hearing on October 24th and was the swing vote on the matter.

The question at issue was whether or not the Board had the right to judge policy created by the MTA.

Gruberg argued that the MTA had a financial interest in the taxicab business and should not be allowed to make policy without the checks and balances of the Board of Appeals.

Director of Transportation, Ed Reiskin, argued that: (1) the voters had spoken on Proposition A to give the MTA the exclusive right to make policy; (2) that the complexity of the MTA's balancing of its various divisions of buses, bikes, taxis et al made it almost impossible for outsiders to judge its decisions; and (3) that it would be impossible to function if all its policies were reviewed by an outside agency.

Numerous speakers countered by pointing out that the part of Proposition A that the gave the MTA control over taxicabs and the right to set policy for the industry was buried deep in the voter's pamphlet. In fact, the MTA's takeover of the cab industry wasn't even mentioned on the front page of the ballet digest.

What I mentioned was that, by Reiskin's logic, the Supreme Court would not be qualified to make judgements on laws created by Congress.

 Several other drivers, pointed out that the MTA had made its decisions with no input from cab drivers or the cab industry and before a study of the taxi industry by Dan Hara & Associates was even completed. They also argued that the main interest that MTA had in taxis was to take money from cab drivers to balance its budget. 

Twenty or so drivers spoke, mostly to the point, although a few brought up their personal despair, which wasn't to the point, but should have been.

President Hwang seemed sincerely sympathetic to the plight of the drivers and even suggested that we organize against a situation that she clearly thought was unfair. Nonetheless, she also thought that she had no right to make judgments over the policies of the MTA and cast the deciding vote against Gruberg's appeal.

One good thing

The Board of Appeals will continue to hear appeals by individuals concerning medallions and other cab issues as they have in the past. This was a concern for many drivers.

Notes and Thoughts

 - Supervisor Scott Wiener, who appears to have no policies other than public nudity and improving San Francisco's taxi business, stopped by to praise the MTA plan, saying that it was a "step in right direction." Yes - there's nothing like having a couple of thousand demoralized, bitter and angry cab drivers on the street to improve service to the public.

- Director of Taxi Services, Christiane Hayashi argued that these 150 permits were for only for a three year time limit and couldn't go to cab drivers anyway because they were temporary and might be taken back.  

She held out the possibility that, if the Hara study called for more cabs, these might go to drivers on the list. 

- I don't really believe that this decision was not that much of a loss. Like Reiskin, I think that this matter might be too complex for this Board of Appeals to handle - although for very different reasons than Reiskin's. The taxicab business is unique and complex both in the way it operates and its history. It would very difficult for an outsider to understand what's happening, what's been going on, what the issues really are.  

- President Hwang gave an indication her lack of understanding when she asked the MTA if they were "transparent" which of course the MTA said they were pointing to Town Hall meeting and, incredibly, the Taxi Advisor Council (TAC). Hwang asked this question after a dozen drivers had told her that the MTA refused to pay any attention to driver input and that half the members of the TAC had resigned in protest because the MTA refused to even hear their recommendations.

Well ... the Town Hall meetings are still being held and the public can have it's minute or two to comment but all the decisions and polices are clearly being made behind closed doors - often in violation of San Francisco's Sunshine Ordinance.

But don't take my word for this. Take MTA Board Director Malcolm Heinicke's.  On May 17, 2012, he send an e-mail to fellow MTA Board members Tom Nolan and Cheryl Brinkman as well as MTA secretary Roberta Boomer with a Cc to Diector Ed Reiskin saying,

"... most of all we all need to come to agreement on this (the MTA's plan) as best we can BEFORE IT IS FORMALLY PROPOSED." (My capitalization.) 

"If that means we need to move this piece of the overall package to a latter meeting, so be it, but we need to get our agreed plan and then sell the Mayor and the Supes."

The MTA Board has obviously been coming to agreements before anything is "formally proposed" for at least the last 6 months.

In the process, the Board's attitude toward taxi drivers has become more and more "transparent." As Heinicke put it in the same e-mail,

"... Chris (Hayashi) is significantly limiting the revenue to the MTA and sending more to the amorphous Drivers's fund. I understand why she is doing this but it is not good policy in my view. The MTA should get revenue. And, if we do not push for that, we are sacrificing the needs of the City to placate a few cab drivers."

Some other form of appeal has to be found or the MTA will suck every cent it can get from taxi drivers.