Murai, Taxi Driver Extraordinaire

The media keeps talking about this rude cab driver who  races around like a lunatic, turns down credit cards, won't take anybody beyond Divisidero, has the personality of an orc and the I.Q. of an ox. I've personally never met the dud and think he's had enough press.

The truth is that most taxi drivers are just ordinary people working hard to feed themselves and their families by doing a very difficult job and getting little or no appreciation for their efforts.

I'm winding this blog down and I do intend to write a piece honoring the average cab driver before I leave the scene, but first I want to celebrate a few of the exceptional people I've met in this business.

I don't think I can do better than start with Murai (photos) who grew up in the Kansas dust bowl; lived the high life in Libya, Rome and London; ran her own fashion business; raised a family as a single mom: has travelled almost everywhere; drove cab for over two decades while earning a bachelor's and a master's degree; holds wonderful salons; and constantly experiments with an art that she creates daily and sends out to us lucky few.

I met Murai ...

... shortly after she started driving for Desoto in 1989. What caught my attention (aside from her being a feminine woman in a macho trade) was that she told me she liked cab driving because it was relaxing.

I'd heard cab driving described in many ways – from "a rolling party" to "the moral equivalent of war" – but Murai is the first driver I'd ever met who found the experience soothing and restful. I knew immediately that I was dealing with a unique character.

An example of this is her name. There is no first or last – "only Murai." She started calling herself this as a nome de art when she was living in London. She later found out that the name was Japanese which she considered an act of synchronicity because she loves Asian art. She once told me her birth name but I've forgotten it. I've never heard her called anything but Murai.

If you only looked at her name and her multicolored hair you might think her a hippie or an artsy flake but nothing could be further from the truth. Murai is as shrewd as they come and has a firmly grounded sense of reality.

Although she started driving a taxi five years after I did she earned a medallion six years before me. Being a typical cab driver, I thought that I wouldn't be in the business long enough to get a medallion. Murai, on the other hand, sized up the situation quickly and tried to put her name on the Waiting List almost immediately. She read that she needed to work for one year before she would be eligible so took the application form home with her and filed it with the Taxi Detail on the first day that she legally could.

She got the medallion when Willie Brown put out 500 medallions in 2000.

Background

Murai was born and raised in Elkhart Kansas, which was the center of the Dust Bowl, and had a population of around 1,000. Her family ran the Elkhart Hotel.

As a teenager Murai longed to move to a city like New York or Paris. She later married an oil man from Kansas and eventually moved with him and her growing family to Libya in 1968.

You can find out more about Murai's early life from her book Heirs and Forebears which contains a series of water color sketches and what she calls "vaguely autobiographical" poems and essays.

Europe

After Libya she moved to Rome (which she liked but didn't speak the language) and finally to London which is close to her idea of paradise. She and her husband rented an apartment in a part of the city which she says is now the most expensive property in the world. Living there gave her a chance to pursue her love of art, fashion and artists.

Contrary to stereotype, Murai found the English to be "very creative and a bit avant-garde both with the theatre and with the clothing ... it was just a very creative place to live so I just loved everything about it."

Her little film, Rhythms of the Heart, will show you more of what her life was like at the time than I can possibly do. It's also a great introduction to the collage artist Bulgar Finn.

Fashion

Murai and her family moved back to Houston, Texas in 1978. She and her husband soon realized that they had nothing in common except Europe and broke up. She received a small settlement and moved to San Francisco to raise her children alone.

She found herself "unemployable" and didn't know what else to do so she started designing coats and accidentally became part of a movement later called "Art to Wear." "I was just making things," she said.

"I started out at I. Magnin's – the most exclusive store – and they did private shows of my clothes in three of their stores including their Beverly hills store where they did four windows of that store with my coats and I didn't know that was a big deal ... I'd been living in Europe ... I had no idea people would kill to get four windows with their stuff."

 Later she went into business for herself selling directly to customers through her connections in New York and Europe. This lasted from the late 70's to the late 80's.

When I asked her if she was making good money, she said:

"It's hard to know because I was freaked out all the time... I had three teenagers to support who were used to living very well with little support from my Ex ... So I was just frantic with employees and supplies and kids but we always lived in great looking places that we rented. We used them as showrooms so we could write them off ... I had a space in New York and London where people represented me ... I'm creative and versatile so I could come up with a whole lot of designs in a hurry... I could make very expensive things out of not very expensive fabric ... I did amazingly well but I was frightened all the time."


Cab Driving

How did you get into the cab business?

"At the end of the coat business I was just freaked out by the stress of it ... when the kids were out of college or married, I felt free do do what I wanted ... so I wanted to go back and get a Master's in psychology ... that's why I did the cab. I was going to do the cab until I became a counselor."

During her studies she discovered,  "I was a classic ADD character ..." and "the cab is a classic ADD vehicle because it's always unplanned, it's always spontaneous ... it's a lot of fun–I love the customers ... I have the most interesting customers and the greatest conversations ... I've loved it from day one."

"So I did finish and I did get my Master's. At that point I thought I liked the cab better and didn't want to work outside of it so I stayed in the cab business."

Murai was one of handful of medallion holders (along with Victoria Lansdown, Barry Korengold and a couple of others) to push for the Pilot Plan instead of open auctions in order to keep the medallions affordable for more drivers.

Spirit

It's no secret that Murai has had cancer for the last 16 months but she hasn't given in to depression or despair. Instead she's continued making art and recently held a Salon that attracted her many friends from her many walks of life. These included: fellow artists, business and fashion people, friends from Europe, cab drivers, administrators and a young Polish woman who told me that she'd met Murai sitting next to her on a flight from London and that it was the greatest trip of her life.

But it's time to let Murai speak in her own words.

Bay Cab Going Out of Business on December 1, 2013

Bay Cab is going out of business on December 1, 2013.

The company, which is owned by Roger Cardenas, has been hit with over $50,000 worth of fines by the SFMTA.

According to Taxi Services staff:

"The fines were for continuous violations of company reporting requirements and vehicle equipment problems (disconnected Paratransit equipment)."

Mr. Cardenas has agreed to go out of business as a settlement for the fines.

Bay's 109 medallion holders will have until November 1, 2013 to tell Taxi Services to which color schemes they choose to move their medallions. Because it won't be a voluntary transfer, the standard color scheme transfer fee of $611.50 will be waved. The transfers should be completed by November 29, 2013.

Cab Company Scams 2: Subleasing

Unless you're directly involved in a shady activity, you aren't likely to know much about it. I mean, the people running scams usually don't put up websites or hold conventions. Nonetheless, knowledge of illegal brokering and illegal subleasing in San Francisco is so widespread that I've been given names and details about these activities by people who aren't even directly involved with the taxi business.

Subleasing is a name that covers a lot of sins. One variation concerns Long Term Leases (LTL).

The way a LTL is supposed to work is that a driver leases a medallion and hires 2 or 3 other drivers to work the shifts that he or she doesn't work. She keeps what she makes himself plus the "gates" the other drivers pay her - which should not be more than an average of $104 per shift but, according to inside sources, are often far in excess of that legal limit.

Sometimes, however, the medallion holder "subleases" the medallion to a "broker" who hires the drivers and often takes huge deposits and charges higher than legal gates.

• Sometimes the medallion holder doesn't want the trouble of running a small business and only works his or her shifts and lets the broker do the hiring and handle the money for the other shifts. 
• Sometimes the medallion holders turns the entire operation over to the broker.
• Sometimes the LDL driver subleases the cab himself and charges exorbitant gates.

Some Post-K medallion holders either don't want to or can't work and sell the use of the medallion to a broker. This, in fact, is probably how the illicit practice started. It might even have had the semi-benign motivation of helping infirm drivers keep an income stream.

Prior to the "Pilot Plan," Post-K medallion holders could not sell their medallions and were required to work 800 hours per year. Many of them couldn't work as they grew older and let cab companies create phony waybills and fill the medallion holder's shifts with non-medallion drivers - not incidentally allowing the companies to make more money off the additional gates and tips that these drivers paid.

However, this practice has evolved into something far larger. Many medallion holders, who can but don't want to work, turn the medallions over to illegal brokers who buy the cars, create the fake waybills, do the hiring, and, last but not least, collect the gates.

Using brokers benefits taxi companies because it removes them from the illegal activites. The brokers or medallion holders often copy the waybills of legitimate drivers and put the medallion holders names on the documents.

But, I've also been told of cases where the managers of certain cab companies sublease medallions themselves without the medallion holder's knowledge. The medallion holders in question work their shifts but the drivers of the other shits pay illegally high gates to the managers.

Obviously, this system wouldn't work if non-medallion drivers were only paying legal gates. The brokers need to pay off the cab companies or the medallion holders and make a profit for themselves. In order to do this, they have to charge way over the legal gate cap.

In addition, there are some taxi companies that are simply over-charging their drivers to go to work. We're in a recession and they are many desperate people willing to work for very little.

My sources tell me that illegal gates prices are going from $140 to $160 to as high as $170 per shift. There are at least a couple of hundred medallions and several hundred shifts involved. This, in effect, is a multimillion dollar pyramid scheme with all the money being extracted from low-income drivers at the bottom - who are doing all the work.

The Need for a Universal Driver's Lease: Part 1

Speaking of exercises in Nostalgia and theory ...

As many readers know, I have no love for the leasing system and would like to see a return to employer/employee method of organizing the taxi business. There are two main reasons for this:

1. A split meter would take cab companies out of the leasing business and put them back into the taxi business where they belong. They would be forced to deal with the realities of the market place. Their incomes thus would depend upon finding better methods of giving service rather than looking for new ways of extracting money from their drivers.
2. The so-called "Independent Contract" deprived cab drivers of basic "worker's rights" and left them unable to form unions and powerless to fight abuses by the companies.

I've come to realize, however, that my dream ain't gonna happen. The only other person with a voice (the vast majority of drivers are unrepresented and have no voice) speaking in favor of "employee rights" for drivers is Christopher Fulkerson and the two of us don't a movement make.

Company owners and managers like leasing because:

 1. It reduces company expenses. They don't have to pay:
     a) Payroll taxes.
     b) Social Security Taxes.
     c) Unemployment taxes.
     d) Medical or retirement benefits.
     e) Sick pay, vacation pay, etc.
2. Companies don't have to worry about unions that might strike for all or part of the above.
3. They don't have to worry about the ups and downs of the market. In fact, they tend to do very well in mild recessions because so many unemployed people are desperate enough to fill even the worst shifts.


Medallion holders like leasing for many of the same reasons that companies do:

1. They benefit, we benefit, from reduced company expenses, and don't have to worry much about the ups and downs of the market place.
2. We're the real "Independent Contractors" in this scenario.
     a) Companies bid for our services.
     b) If we don't like one company, we can take our medallions to another.

The Municipal Transportation Agency doesn't want taxi drivers to be employees because:

1. I suspect that MTA administrators don't much like the unions they do have. They sure don't want a gang of striking cab drivers on their hands.
2. This makes it easier for them to raise fees and dream of "income streams."

The United Taxicab Workers might talk about a union but they've done precious little to bring one about.

1. I think that they're caught in a conflict of wanting "employee rights" for drivers who aren't employees and they've never quite figured out what to do about it.
2. If they demanded that all drivers should be employees, they're afraid of losing the support of drivers who want to be under a lease.
3. If they fight for the people on the lease, they lose the ones who want "employee rights."
4. In this confusion, they've been divided and conquered.

Lease drivers may not want to become employees because:

1. They like the freedom that leasing gives them. They can go anywhere they like and work any way they want.
2. They may not fully understand what they are giving up when they sign the lease.
3. What they are actually free of are all the legal rights that have been granted to employees over the last hundred and fifty years including: age, race and sex discrimination laws; the right to a minimum wage; the right not to be fired without a cause, the right to collect unemployment, etc - not to mention the right to having half their social security taxes paid as well as actually having social security benefits to collect when they get old.

To be fair, it should be said that the high number of medallion holders (probably around 20% of all drivers) has drastically cut cab company profits. According to Pre K medallion holder, Art Lempke, the money given to the medallion holders created by Prop-K have made it impossible for companies to afford paying benefits to regular drivers.

On top of this, the whole industry has been geared to leasing for over 30 years. Changing to a employee/employer system would drastically change the business in unpredictable and, possibly, destructive ways.

Yet -  the "Independent Contract," which defines the relationships in the lease, is more a fictional than a legal document in the way it's used in the taxi business. It is supposed to be a contract between parties of equal power.  While this really does describe the relationship between companies and medallion holders (see the bit about medallion holders above), it's a joke when applied to non-medallion holding drivers. They are powerless and easy prey for those who want to abuse their power at the drivers expense.

The problem is how to stop these abuses while keeping the companies solvent and improving service to the public.

Next up: Company scams.

TAC 9-27: The Driver's Fund

As of last week, some numbers for the Driver's Fund were:

• 13 = Total Medallions Sold at $250,000 each.
• $162,500  (5% or $12,500 for each salex13) = Total in Driver's Fund.
• $92,026 = Taxi Wrap Fund balance.
• $254,526 = Taxi Wrap and Driver's Funds combined.

                                                The Taxi Wrap Fund

was a holdover from the Taxi Commission and has been administered by Taxi Services since last year. The money coming from the current taxi wraps ($141 to the MTA while $265 goes to the companies) is currently being put into the fund.

The Taxi Advisory Counsel, in an unanimous vote, decided to wrap the Taxi Wrap Fund into the Driver's Fund.

Director Chris Hayashi said that she was working to make sure that future wraps would not cover any windows in the cabs and that taxis would be clearly recognized as such by the public.

The Driver's Fund

There were an abundance of ideas about what to do with money (see top photo.)

Jane Bolig said that what was done with it would depend upon whether it was "a popcorn fund or a plasma tv fund."

Chris Hayashi did some arithmetic showing that the sales of 100 medallions under the Pilot Plan would bring in 1.25 million dollars.  If such sales continue beyond the Pilot Plan (almost a certainty), the fund would definitely grow way beyond the "popcorn" category.

There were several ideas about how to increase the money in the fund:

1. Put the money into an interest bearing account instead of just letting it sit as it does now. Chris Hayshi said that she would look into this.
2. Councilor William Minikel had the intriguing idea of makiing the MTA give part of its advertising revenue to the Driver's Fund since the MTA gets money from us. Quid Pro Quo. Great idea. Good luck with that Bill. 
3. Mininkel also proposed that each driver give one dollar to the fund every shift echoing a plan laid out by Barry Korengold last year. 

Who gets the money?

Barry Korengold (photo, right) wanted a vote to insure that the monies in the fund be used for non-medallion holding drivers - as the people at the Town Hall meetings intended. He said that it shouldn't even be necessary to discuss it.

Director Chris Hayashi, on the other hand, has expressed the idea that the people at the Town Hall meetings had left it up to the Taxi Advisory Council to decide who the money was to be used for - an interesting view to me since the duties of TAC were never discussed at Town Hall meetings.

My impression agreed with Korengold's so I checked my notes and, indeed, that the monies in the Driver's Fund should be used for non-medallion holders, was a basic cornerstone of the Pilot Plan.

Chris Hayashi (photo, left) had said, "Nobody will get everything they want but everyone will get something." Her vision of fairness and justice - in a business with little of either - is what turned so many of us into her groupies.

The Driver's Fund was the "something" that 5,000 or so non-medallion holders were supposed to get. The medallion holders would be given the right to sell their medallions and the non-medallion holders would have the right to benefit from the Driver's Fund. Quid Pro Quo. That was the compromise. That was the consensus. That was the deal.

Nonetheless, Hayashi wrote it up differently than the vast majority of Town Hall participants had purposed and insisted that her Taxi Advisory Council decide for whom the money should be used.

The Vote

Despite the fact that eight of the fifteen members on TAC are taxicab company owners, managers or stockholders, I still thought that Korengold's motion would carry the day. My reasoning was:


3. Those 5,000 non-medallion holders make up about 75% of the drivers in the business. Simple logic would dictate that, if TAC is supposed to be representing the taxi industry, something should be given be given to the majority of its workers.

2. Retired medallion holder Art Lembke has often said that the reason that taxi companies can't give benefits to drivers is that the profit margins are too low. But the Driver's Fund is new money. Allowing regular drivers to keep that money would give medallion holders and company owners the chance to unleash the true generosity of spirit that Lembke claims has been held in check by the harsh realities of the taxi business.

1. Taxicab owners and medallion holders are very sensitive to the public's perception of them as greedy, grasping, self-serving, venal and corrupt sharks. Allowing non-medallion holders to keep the money in the Driver's Fund could help to change this bigoted and unjust stereotype.

After Korengold introduced the idea that the non-medallion holders should keep the fund, the ensuing discussion was initially lame, as if the councilors couldn't think of what to say. Then Luxor Cab President John Lazar (photo, in center), claiming that medallion holders could little more afford to pay for a catastrophic injury than a regular driver could said,

"Its a Driver's Fund ... yea, the medallion holders make a couple a thousand a month more ... but they don't have so much either ... they're all drivers ..."

A slight gasp of relief could be heard from around the room and one councilor after another soon gave a variation of the "we're all drivers" speech. I half expected them to break into a chorus of We Are the World.

Of course, one could have pointed out that:

• Lazar had turned the question on its head and was using semantics and sophistry to spin his argument. 
• Since the fund is about money and not sentimentality, the essential fact IS the $25,000 more a year that the medallion holders make, not the fact that some medallion holders also drive.
•  The "couple of thousand" more that we medallion holders make a month could be used to purchase the accident insurance that non-medallion drivers rarely can afford.

One could have added that:

• Being able to sell the medallion gives the medallion holder an additional $250,000 more than non-medallions drivers.
• Giving medallion holders access to the fund would be double-dipping - in effect giving them a rebate on the 5% that they are charged for transferring their medallions.

One could have concluded that the reason the Driver's Fund was set up in the first place was to give the non-medallion holding drivers, who make half as much money as their medallion holding brothers and sisters and won't be paid $250,000 when they retire, a little pocket change.

But one wasn't allowed to point anything out. TAC president Chris Sweis (photo, left) has decreed that (unlike at SFMTA board meetings or at most public government committee meetings of any kind in San Francisco and California) the public is not allowed to speak after the councilors and before a vote, making TAC's claims to meaningful public participation and true transparency largely bogus.

Thus, did semantics and sophistry carry the day. And, thus, the public's unfortunate prejudicial, bigoted and unfair perception of taxicab owners might continue.

Only Korengold,  John Han and David Khan voted in favor of reserving the fund for non-medallion holding drivers.

In sum: A victory for TAC over the Pilot Plan. A defeat for Chris Hayashi's vision. And, a defeat for those 5,000 non-medallions holding workers who are "all drivers" too.

It's $250,00 - Of Course.

$250,000 was chosen as the Fixed Price Sale amount at a Town Hall Meeting yesterday. The figure was a forgone conclusion. Of much more interest (if you'll excuse the pun) were the details of the financing that will become available to the buyers.

Attending the meeting were Louis Jimenez (photo) and Michael Turano of the Montauk Credit Union from New York City; and Rebecca Reynolds Lytle and Stephan B. Ho of the San Francisco Federal Credit Union. These two institutions have joined with the San Francisco Police Credit Union and the San Francisco Fire Credit Union to provide loans to drivers.

The team, of course, was put together by negotiator extraordinaire, Director Christiane Hayashi, who gave the presentation.

The loans will:

• have an interest rate of around 7%.
• require a downpayment of 5% to 20%.
• be amortized over a period of either 15 or 25 years.
• have a three year balloon payment that will be refinanced at the end of the three year period.
• There will be no prepayment penalties and no fees up front.

Credit unions are required by federal law to get a 20% downpayment on a loan. One unique feature of these loans is that the seller might have to guarantee the downpayment if the buyer is unable to come up with the full 20% or $50,000.

• If the buyer can only do 5% down, the seller would have to guarantee the other 15% or $37,500.
• At 10% down, the seller would have to front $25,000.
• At 15%, the amount would be $12,500.
• The money would be held in an interest bearing CD and paid to the seller when the equity in the loan reaches the $12,500 to $37,500 figure.

Payments on the loans will be about:

• $1,800 a month at 20% down on a 15 year loan.
• $2,100 a month at 5% down.
• from $1,400 to $1,700 per month on a 25 year loan.

The creative and unique way of guaranteeing the downpayment is the brain-child of Mike Turano of Montauk. It's a response to our unique situation where the rules of the game are changing too rapidly for drivers to have planned for them in advance. It shows the willingness of Taxi Services and the credit unions to qualify as many drivers as possible.

As it is, this might turn out to be minor feature of the Pilot Plan anyway. According to Chris Hayashi, most of the drivers who have sent in their Buyer's Participation forms say that they do have the 20% downpayment.

That the loans are possible at all is due to Hayashi's bringing Montauk Credit Union into the mix. They have expertise in loaning money to medallion holders in New York, Chicago and Philadelphia.

Louis Jimenez, CEO of Montauk, said that he was attracted to the San Francisco market because he's found that individual medallion holders are very good risks. He said that he hadn't foreclosed on this type of loan in the last 15 years. He thinks that the only way he can lose money is if San Francisco does not continue to sell taxi medallions after the Pilot Plan is over.

Buyers will not be required to use only these finance companies for their loans. If they can get better terms from other qualified lenders, they are free to do so.

Tomorrow: What sellers and buyers should be doing.

The Phantom Answers Anyonymous

Lately I've been besieged with comments from a character hiding behind a cloak of anonymity. Sometimes he gives a name like "Dave" or "Anonymous #1" but more often he refuses to give a name claiming that he's afraid of retaliation from the companies or the Taxi Division.

As an ex-non-medallion holder who openly tried to form a driver's union and openly criticized policies of the companies I worked for, I can't say that I admire his courage. However, I believe that the main reason he is being anonymous is that he's one person pretending to be several and thus bogusly claiming to represent "how members of the Taxi community really feel."

He's hostile to the Pilot Plan and keeps looking for weak points to attack. If you respond to one of his jabs, he comes back and attacks from a different angle. Some of his rhetorical assaults are beyond ridiculous. For instance, he claims that if people who buy medallions are forced to follow a driving requirement, they would lose their medallion if they had to go away for five years to take care of a sick relative.

What can I say? ... Anybody who left any business for five years would probably lose it. At least a medallion owner would be able to sell the medallion and would be a lot better off than a driver who would lose his or her place on the waiting list.

Having answered that pseudo-question, I'm sure I'll have to field another equally ridiculous one in response. It's like dealing with an eight-year old who knows he's smarter than you are. However, I do think that he has some legit questions or concerns that I'll try to address:

• Buyers of medallions will be able sell them right away: They will not have to wait until they are 70.
• Director Chris Hayashi is not sitting on medallions. Since she's taken over she's put them out at a rate consistent with the years in the past as you can see from this chart.

YEAR # of Medallions Awarded

2000 85

2001 83

2002 26

2003 53

2004 28

2005 18
2006 52
2007 56
2008 106
2009 55
2010 9

• In the year since the SFMTA took over, the Taxi Division has put out 37 medallions. They will be putting out 5 more on April 20th.
• 2000, 2001 and 2008 were all years where new taxi medallions were issued. If you remove these from the equation, the average number of medallions issued per year is 41.

It is true that the Taxi division has a backlog of about 25 medallions but Hayashi says that this is only because she has been unable to hire enough staff to investigate and issue the medallions to new owners.

Anonymous is certain that the real, the true reason is that the SFMTA wants to hold onto the medallions until the Pilot Program is over, when the nefarious Hayashi intends to sell the medallions instead of giving them out to drivers on the list.

There are a few things to say about this:

• On April 16, 2010, SFMTA will be interviewing people for the investigator positions that Director Hayahsi needs.
• The medallions being held now are being given out on a basis of one medallion to drivers on the list for every medallion sold by the MTA. That is to say that she can't sell the medallions if she doesn't also give them out.
• Therefore it doesn't make any sense for her to hoard them.
  

Anonymous has also criticized the Fixed Price sales plan as leading to a possible bankruptcy tsunami like what happened when the old Yellow went down the tubes in the mid 70's.

When the final financing plan is my hands (hopefully in the next few days) I'll go into more detail, but the above scenario is very, very unlikely to happen for the following reasons.

• Old Yellow owned most of the medallions in the city. It's hard to see how 300 or so individual medallion holders could conceivably all go bankrupt at the same time.
• The failure rate of loans to cab drivers in New York City is 1/2 of 1% (0.5%) and New York sells their taxis at much higher prices than they will sell for here.
• Although I don't have the final figures, I've been assured that the loan payments the medallion holders will have to make will be about the same as the amount these medallion holders will be paid for leasing out their medallions when they aren't working them.
• Thus the medallions will pay for themselves. If anything, I would expect the failure rate on these loans to be even less that it is in New York.

For now, I guess that is it.

I've enjoyed the comments that I've had on this blog but I really don't want to continue to deal with the silly little games that this character has been playing. I would appreciate it, if in the future, people who want to post here would identify themselves in a consistent manner. Not that you have to use your real name (I'm not using mine on this blog) just that you do use a name and use the same one every time.

Thanks in advance.

Players & Plans: The UTW & The Asian Law Caucus

Before examining this proposal, I should admit that there are two reasons why I can't pretend to be objective:

1. Money for the plan would come out of my pocket. It would treat other medallion holders and myself as if we owned companies instead of just medallions and tax us as much as $10,000 per year.

2. The UTW went to Supervisor Chris Daly's back door before the people in the taxi industry even got a chance to look for more reasonable and creative solutions to the benefits problem at Town Hall Meetings.

The UTW and the Asian Law Caucus (ALC) mainly want:

1. Health insurance for the drivers.
2. Retirement for the drivers.
3. Enforcement of laws against illegal limousines.

Well and good. I agree. In fact we medallion holders are already paying $1.5 million (or 5% of our incomes) to (among other things) help fight bandit limos - who also steal rides from us.

The ALC does make several statements that I can agree with:

• Non medallion drivers, many of whom are immigrants, are low paid, forced to sign "independent contracts" which deny them the right to unionize and are exploited in numerous ways.
• These exploited drivers must wait for as long as 15 or 20 years in order to own a medallion.
• Once a driver owns a medallion his or her life is changed dramatically by an income that effectively doubles.
• In addition to whatever they make driving their cabs, medallion holders earn around $2,000 per month by leasing their taxis out when they themselves are not working.
• "The dream of holding a medallion inspires many taxi drivers to stay in the industry and maintain good driving records."

Well and good. It's all true. The disagreement starts with the UTW's financing plan. They want to charge medallion holders an additional fee of from 20% (ALC) to 50% (Supervisor Chiu). This is a tax rate many times higher than any company or corporation pays for employee benefits.

The reasoning to justify such outrageous fees - if reasoning is the word - starts with the above mentioned facts and then goes bonkers. George Orwell probably would have called the UTW's arguments double-think - in his kinder moments. Many of their other rationalizations are just plain false.

• The $2,000 that these poor, exploited drivers stayed in the industry for up to 20 years to earn is magically transformed into "unearned income" by the UTW. Apparently all those years of toil and strife should gain drivers nothing but a chance to pay the bills for people who haven't yet paid their dues. It's OK for those abused immigrants to dream but not too much.

The ALC also likes to load it's arguments. The word "immigrant" mysteriously disappears whenever medallion holders or fees are mentioned although a substantial number of the holders who would pay these fees are indeed immigrants.

• The $2,000 is treated as a huge pile of money by the ALC that claims that imposing extortive fees "will encourage medallion holders to actually drive their vehicles ..." This is a variation on a bogus factoid constantly yammered by Rua Graffis of the UTW who once claimed that medallion holders stayed home "eating pizzas" instead of driving.

This is nonsense! Where do these people think we're living - San Francisco Del Mar, Mexico? Studio apartments here rent for $1,500 a month. Even if there wasn't a driving requirment, we'd need to work. But there is a requirement. If medallion holders don't work, they lose their medallions. Personally, I work about 50 weeks a year just to tread water.

• The purest piece of double-think, however, is the idea that the plan will give medallion holders an "incentive to retire." This in turn supposedly would result in an "exit" strategy that is lacking now.

Think and think about this. The medallions holders would pay 20% to 50% of their incomes to finance not only retirement plans but other benefits for thousands of people. Any such plan would pay them back cents on the dollar. Maybe I just have a strange sense of humor but wouldn't we be better off putting that $4,000 to $10,000 into our own plans? As for the "exit strategy" - another joke. Under the UTW's plan, holders would be able to save little if anything and would cling to their jobs even more desperately than they do now.

As a former insurance underwriter, I think the main flaw of this and other proposals like it is that it distributes the cost among too few people. Usually the rate of insurance is spread among tens of thousands or hundreds of thousands of people. This was the case back in the day when the Teamster's union provided benefits for San Francisco's cab drivers.

But, the ALC and the UTW want to stick less than 1,500 people with the bill. This means that San Francisco's medallion holders would be charged a rate five or ten times higher than any other group pays to provide similar benefits. As such, the fees would be punitive and oppressive.

However, one aspect of this proposal is true. It would speed up the waiting list. Few drivers, immigrant or otherwise, would be willing to spend 15 years being abused by the companies only to be exploited in turn by the UTW, the Asian Law Caucus and the City of San Francisco.

Players & Plans: SFCDA

Although they are the new kids on the block, the San Francisco Cab Drivers Association is the only group to consistently protest against the MTA's plans to extort money either by selling cabs or imposing fees on medallion holders. With refreshingly openness, President Barry Korengold consults with the general membership in order to formulate policies or plan actions.

SFCDA's plan calls for:

• The preservation of Proposition K.
• An "exit strategy" that would entail a gradual relaxation of the driving requirement. Korengold suggests that the requirement be reduced by 25% every five years and an additional 25% when a driver reaches 65.
• Changes in the waiting list that include: drivers being automatically placed on the list when receiving an A-Card and the idea that drivers should be able to remain qualified once they meet a basic requirement of driving 9 out 10 continuous years.
• A serious crack down on illegal limos that would create significant revenue for the City and allow for the issuance of "hundreds more permits" for legitimate taxicabs.

The proposal should appeal both to medallions holders who don't want transferability and to people high on The List.

Medallion holders who want to sell and regular drivers who want to buy of course will dislike it.

The plan also doesn't really address the fact that the waiting list moves much too slowly for many people - except once again by putting more taxis on the street.

Gavin Newsom Tries to Shaft the Medallion Holders

Mayor Gavin Newsom, who has fought against a business tax that he himself would have to pay, seems to have the wind at his back in his attempt to force taxicab owners to auction their medallions to pay off San Francisco's debt. In fact, a local newspaper poll showed 51% voting in favor of such a measure because the "city could use the money" while only 36% thought that the "current holders need the income."

Newsom of course has the stereotype of the greedy cab owner working in his favor. But perhaps more important are innumerable newspaper articles stating that medallion holders make $70,000 per year just by leasing out their taxies. 

Sounds like a lot of money, doesn't it? Especially for a bunch of lowlifes.  I kept running into this figure over and over so I decided to do something that local "journalists" have clearly never done themselves: I researched the subject.

• I asked several medallion holders about their incomes and they all said that they were coming up about $50,000 short of the factoid. When I asked them what they thought had happened to the money most of them didn't have a clue but one opined that Officer Makaveckas might somehow have gotten his hands on it.
• Seriously ... the $70,000 figure is arrived at by simple arithmetic. The leasing rate for a shift averages about $100. There are two shifts per day and 365 days per year = +70,000.
• The problem with simple arithmetic is that it's too simple. What is needed here is a little simple subtraction. The $70,000 is a GROSS: before the taxicab is bought, before insurance, before paying for the property on which to store the cab, before maintenance, before the property taxes, before the salaries for bookkeepers, accounts, lawyers, dispatchers, mechanics and other expenses are taken out.
• The medallion holders usually let the cab companies take care of the above details and split the money with them for the right to lease out the cabs to other drivers. The medallion holders average about $20,000 a year from the split. I don't know the companies' share. 

Now $20,000 might be a lot of money in San Francisco Del Mar, Mexico but in San Francisco, California it's barely enough to rent a studio apartment. That's why 85% of the medallion holders also drive cabs long hours themselves, bringing their yearly total up to $30,000 to $50,000 - which might get them a one or even a two bedroom rental but will never be enough to buy a house. This after working for at least 15 years in one of the most dangerous jobs (cab drivers are more likely to die by homicide then policemen) there is. By comparison:

• San Francisco policemen and policewomen earn  $75,868 to $101,556.
• Firefighters base pay averages $54,000.
• Muni bus drivers get a base salary of $56,000.
• AC Transit drivers start at $40,560.
• BART drivers make $64,296.
• All these groups have medical benefits, paid vacations, sick leave and retirement benefits.
• The benefit package at BART is worth over $29,000 per year.
• Most of these people could also  work overtime -  at least before the eco-tsunami hit.

The medallion holders:

• Have no benefits of any kind.
• No retirement.
• Pay the city one million dollars a year in a tax on the medallions.
• Pay the same 15% self-employment tax as regular cab drivers.
• Will have the City of San Francisco try to take their medallion away if they become old or disabled.
  

Mayor Gavin Newsom, to make another comparison, regularly makes in excess of $400,000 per year and has made more than $1,000,000 in a year on at least one occasion.

You can see why a man with Newsom's sense of fair play would hesitate to pay a 1.395% business tax.