TAC Interm Medallion Sales Pilot Program Report

This report was put together by Taxi Advisory Council Chair Chris Sweis (Photo between councilors Richard Hybels and John Han). It summarizes and points out problems arising from the Medallion Sales Pilot Program as well as listing TAC's recommendations to the SFMTA Board.

The report focuses on the effects that Pilot Program has had on various groups in the Taxi industry. I'd like to highlight  (with of course my own views) a few things.

The Effect on Cab Companies.

• A movement away from Gate and Gas to Affiliate operations.
• A concern because Affiliates are less profitable for the cab companies.
• A tendency of Affiliates to hire new and inexperienced drivers.
• A concern about inexperienced drivers "negatively impacting" service - i.e. drivers deadheading downtown and to the airport instead of taking dispatched calls.

The Effect on Drivers.

• A loss of shifts for Gate and Gas drivers.
• Slower movement of the Medallion Waiting List.

The main, negative effect of the list slowing down has been felt on drivers closer to the top of the List. This is because medallions formerly became available to the List as older medallion holders died off. As many of the older medallion holders sell their medallions, the pool of medallions going to the list naturally becomes smaller.

The main, positive effect is that drivers on the list can now buy a medallion at a controlled price that allows the medallion to pay for itself.

The Effect on Medallion Holders.

Aging medallion holders are clearly the biggest winners of the Pilot Program. Medallions, that were worth nothing excect in terms of the monthly rental that they brought in, are now worth $250,000.

This has been a special boon to Post-K drivers who are either disabled or over the age of 70. Prior to the program, they either had to work 800 hours per year or face losing their medallions. Instead, these drivers now have a chance, as the phrase goes, "to retire with dignity."

The program has also reduced the stress level for younger Post-K drivers like myself (a kid of 66) because we now know that we won't be forced to drive (or pretend to drive) for the rest of our lives.

Perhaps the biggest winners, though are the Pre-K medallion holders. Having already made from between $800,000 to $1,000,000 from leasing their cabs over the last 33 years, they can now collect an additional $250,000 for exiting the taxi business.

The Driver's Fund.

The drivers fund was originally intended for non-medallion holders. It was to be a Quid Pro Quo (i.e. something that is given or taken in return for something else.)

The medallion holders were to get $250,000 and the non-medallion holders would get the Driver's Fund - now totaling over $1,000,000 with great potential depending upon how it may be fed in the future.

This intent, however, was wiped out by one of the first TAC votes.

Barry Korengold had called for a motion that would insure that the fund's money would go to non-medallion holders.

President and General Manager of Luxor Cab John Lazar, on the other hand, argued that "medallion holders are drivers too" and that the fund should therefore go to all drivers. This carried the day by an 11 to 4 margin despite the fact that some medallion holders are actually not drivers and a few, like John Lazar, have never driven a cab for a living.

What's going to happen to the Driver's Fund, as well as who will benefit from it, will be decided at future TAC meetings.

One possible use of the Driver's Fund that has been discussed would be using the money as an investment fund for drivers.

Recommendations.

The TAC has made several recommendations that it will urge the SFMTA Board to adopt. 

1. To merge the taxi wrap fund and any new income into the Driver's Fund.
2. To move the Driver's Fund into a managed account that allows the money to grow.
3. To have the Key Personnel Exemption apply to people on the Waiting List. (See Below.)
4. To have the down payment assistance program be made available only to buyers who operate their permits as Gates and Gas cabs.
5. To monitor Affiliate run medallions more closely and to have all medallions issued to the Waiting List be run as Gates and Gas taxis for the first 3 years.
6. Preliminary recommendation that the sales program continue after the Medallion Sales Program is complete. (See below.)

Not Recommended.

There were also several motions that the TAC either failed to pass or refused to even discuss in addition to the vote not to give the Driver's Fund to non-medallion holding drivers.

1. Failed to pass a motion by Councilor Barry Korengold to limit the number of medallions that the MTA could sell outright to the sixty agreed upon in Pilot Plan.
2. Failed to pass a motion by Councilor William Mounsey that would have changed the ratio of medallions sold outright by the MTA to medallion give to the Waiting List from 1:1 to 1:2. In other words, 2 medallions would given to the Waiting List for every medallion sold by the MTA. 
3. Failed to discuss a plan by Councilor Barry Korengold that would preserve the Waiting List by allowing medallion holders to retire and give the medallions back to the City when they died.
4. Refused to even discuss discussing replacing the current leasing system with a split meter (along with employee rights) despite the high probability that such a change would drastically improve service to the neighborhoods.

A closer look at two recommendations.

6. The explanation written in the report says that "many members of the council are pleased with ... Sales Pilot Program and would like to see it continue ... "

Possibly but, if this is true why did it take the better part of three TAC meetings to pass the recommendation? The truth is that Dan Hinds kept on bringing the motion up over and over again until he bludgeoned it though. He basically paralyzed the proceedings by constantly calling for a vote about medallion sales no matter what other subject was being discussed. In effect, Hinds filibustered the TAC making it impossible for the council to do any other business until the voted on his measure.

In my opinion, the vote was taken more to shut Hinds up than for any other reason.

3. I'm amazed that TAC Chair Chris Sweis had the temerity to include extending the Key Personnel Exemption to people on the Waiting List in his report after being told that such a vote was inappropriate and would probably have been illegal if TAC actually had the power to put the recommendation into effect.

To put it simply - Chair Chris Sweis, Councilor Athan Rebelos and Councilor John Lazar are all on the Waiting List and thus voted to make it easier on themselves to get medallions worth $250,000 than it would be for other people on the list. In addition, Councilor John Lazar has two sons working for him who are on the Waiting List and would thus qualify for the Key Personnel Exemption.

Let me expand on this last point. Lazar's sons have never driven a taxicab. Lazar is thus trying to use a public office to try to give his children medallions worth $250,000 without the two of them ever having to drive a cab for a living.

Supervisors Lack a Resolution

The Board of Supervisors failed to pass a resolution "opposing proposed taxi fare increase under consideration by the Municipal Transportation Agency in the absence of improved taxi service" yesterday because it did not have unanimous support.

Sponsored by Supervisors Scott Weiner, Malia Cohen and Mark Farrell, the measure required a unanamous vote because it had not been discussed in a committee.

We didn't realize that the public would be able to address the subject until the Board was already in session so only Mark Gruberg of the United Taxicab Workers, Barry Korengold of the San Francisco Cab Drivers Association and myself argued against the resolution.

Gruberg said that we needed a raise because we hadn't had one in eight years; Korengold mentioned that the SFMTA Board had failed to implement Open Taxi Access which would immediately improve service to the neighborhoods; and I commented on the weirdness of Democratic politicians, the party of labor, refusing to back a cost-of-living raise to working people. We all expressed a sense of unfairness at being punished for problems beyond our control.

The Board, however, had already decided the issue behind closed doors - this time to our advantage. Supervisor Weiner said that the resolution did not have the necessary support so no vote was taken and the measure was tabled until the Board's next meeting.

Weiner went on to say that the resolution was not intended as a criticism of cab drivers but that we needed more taxis on the street. He just thought that any meter increase should be coupled with peak time cabs.

Supervisor John Avalos, from my District 11, true to his labor roots, spoke against the measure saying that taxi drivers needed a fare increase.

Supervisor Malia Cohen, from District 10, remained adamant in her belief that there should be no meter increase until cab drivers start picking up in the Bayview.

500 Corporate Cabs? 500 More Taxis????

Rumors have been running rife about what actually happened at the Paratransit Coordinating Council (PCC) meeting on May 18, 2011.

The rumor that struck terror into the hearts of cab drivers on the waiting list was that the PCC had passed a resolution advising the Board of Supervisors to put 500 cabs on the street and give them to Yellow, Desoto and Luxor Cab companies.

To Rua Graffis (of the UTW and the PCC), who voted against the measure, this meant corporate cabs and the death of the Waiting List.

To Hansu Kim (manager of Desoto Cab) this was just a misunderstanding. According to him Yellow, Desoto and Luxor thought that they should have most of the ramp taxis given to them since their vehicles did all the paratransit pick ups in the city. That is to say, that they wanted any future ramp taxis that the city released given to them.

And, yes, Kim also wants more cabs on the street but he wants only to see a few released at a time. He also wants them to go to "qualified drivers" not to cab companies. He added that nobody would be stupid enough to call for corporate or fleet taxis in this political environment.

Hansu, however, was not at the council meeting. Athan Rebelos, his general manager at Desoto was.

Athan (photo) had a slightly different story.

 Rebelos, the indefatigable John Lazar of Luxor, and a Yellow Cab representative talked the PCC into advising the Board of Supervisors  to put 500 more cabs on the street. I would guess that they told the council that these 500 taxis would be sent out into the neighborhoods to pick up paratransit people instead of (as well all know) deadheading downtown and to the airport. Or not? (See a rebutal to this by Athan in a comment.)

In sum: the companies convinced the council to advise the Board of Supervisors to give Desoto, Yellow and Luxor cabs most future Ramp Taxis, and to add 500 regular cabs to the San Francisco fleet - bringing the total to 2,000 taxis.

These cabs would not go to corporations, they would go to individual drivers like they do now. As to whether these taxis would be given or sold to drivers on the Waiting List was not addressed.

 I called the PCC yesterday to clarify the matter and a representative told me that the Paratransit Coordinating Council had decided NOT to send any recommendation on at this time.

She said that a lot of people had been confused about the vote and that the PCC wanted to have another meeting on the subject before making any decisions.

The next PCC meeting is on June 22, 2011 at 10:30 am at 711 Eddy.

Meter Increase - Yes, Gate Increase - Nyet, Nine, Buyao, No Way Jose

Traditionally cab companies have waited for a few months after a meter increase to implement a gate increase so that their drivers could a make a little extra money but John Lazar, President and General Manager of Luxor cab, isn't one to stand on custom. He's calling for a gate surcharge the instant the meter raise goes into effect.

Lazar and some other company owners argue that they need more money in order to provide services like computerized dispatch. But companies like Luxor have been relieved of millions of dollars worth or credit card charges that are already being passed onto the drivers.

 In addition, taxi companies have also had two gate increases of $5 and $7.50 since the last meter hike.


Hybrid Surcharge


The $7.50 is supposed to help cab companies cover the extra charges of purchasing hybrid cars. However the price of hybrid vehicles declined to the point where the cost was about equal a few years ago. And, although hybrid prices have gone up again, the difference is only $2,000 or $3,000.

Time for a little math:

• $7.50*2 per shift = $15 per day *365 = $5,475 per year.
• This means that this surcharge pays the companies from $15,000 to $18,000 over life of the vehicle.
• If the car is new - subtract the $3,000 extra cost of the hybrid from the surcharge and you can see that companies are making $12,000 to $15,000 per cab off the last $7.50 gate levy.
• Owners like Lazar, who buy their cars used, are basically paying for the entire cost of the cabs simply from this hybrid jack up. 

Unconscionable 

This is a big word. My dictionary defines it as "not right or reasonable, excessive, wrong, unethical, unfair."

All of which accurately describes taking a much needed wage raise away from drivers - in terms of both a gate increase and credit card charges - and giving it to taxi companies who've already taken more than enough relief.

Thoughts on the Meter Increase

The SFMTA Board okayed a meter increase of ten cents for every 1/5th of a mile and 1 minute of waiting time. They will take up the question of an increase in the drop from $3.10 to $3.50 at the next meeting. For more complete coverage see John Han's blog.

Here I'm simply going to expand on the short talk I gave to the SFMTA Board.

The Need for the Meter Increase.

• Many people have pointed out that the cost of living has gone up 19% since the last meter increase.
• The increase the Board passed (including the additional 40 cents on the drop) would equal 22%.
• Therefore - it's simply a matter of catching up.  

After the meeting, I went to work and discussed the increase with my customers. Of course nobody likes the idea of paying more for anything but the people I talked with accepted the raise without much complaint - making me think that the amount we settled on was just about right.

Nix on a Gate Increase.

The vote hadn't even been taken before John Lazar, President and General Manager of Luxor Cab, stood up and pushed for a gate increase of just 75 cents a hour so that Luxor could keep on giving it's full service including computerized dispatch.

What a salesman? 75 cents an hour doesn't sound like much does it? Let's take a closer look. That means:

• $7.50 a shift or  $15.00 per day = $5,475 per year per driver profit for Luxor.
• $7.50 a shift paid by drivers * 5 shifts per week = $37.50 *52 weeks = $1,950 per year out of the drivers profits - off the top.
• If non-medallion drivers average $25,000 per year, a 20% meter increase = $5,000.
• Meaning that almost 40% of the income boost would be eaten up by the gate increase.
• Meaning that they've already more than lost their cost of living increase.

More later.

Information on Sales Program for Buyers

Rebecca Lyte

Vice President of Lending 

San Francisco Federal Credit Union

Asked me to post this message.

Good morning, I’m hoping you will be able to attend one of our upcoming information sessions.  The first sessions begin tomorrow!

Please feel free to invite anyone you think may benefit from the information.

Hope to see you there,

Rebecca

MEDALLION SALES PILOT PROGRAM
INFORMATION SESSION

If you recently received an Offer to Purchase a Taxi Medallion from the SFMTA,
or just want to learn more about the Medallion Sales Pilot Program loan process, please join us.

			¶  Learn about the medallion sales process from the buyer’s perspective ¶  Understand the Down Payment Requirements & Down Payment Assistance ¶  Understand the loan process and how to submit your loan application package ¶  Questions & Answers ¶  Credit Union Information
Where:				San Francisco Federal Credit Union 770 Golden Gate Ave San Francisco, CA  94102
	When:			Attend the session that best meets your schedule (The same information will repeat during each session)
		Session I Thursday, May 19th 12:30pm to 2:00pm					Session II Thursday, May 19th 6:00pm to 7:30pm
		Session III Thursday, May 26th 12:30pm to 2:00pm					Session IV Thursday, May 26th 6:00pm to 7:30pm

Refreshments will be served at each session

For information or to RSVP, please call (415) 775-5377, select option 4  or
email: Contacts@SanFranciscoFCU.com

Rebecca Reynolds Lytle
Vice President of Lending



770 Golden Gate Avenue, San Francisco, CA 94102
Phone: 415-359-2926 | Fax: 415-447-2240
www.SanFranciscoFCU.com

Personal Attacks

It's time for a glance at first principles. 


The foundation of political freedom is freedom of speech. It's been established that, as long as your speech is no threat to other people, you have the right to say anything you want. It can be true or false, brilliant or moronic, insightful or totally beside the point - doesn't matter. You have the right to say it.


More nuanced but underlying this freedom is the principle that, if you disagree with a statement that someone else makes, you still grant him or her the right to say it. Furthermore, if you don't like what someone says, you have the right to attack the idea but not the person who makes it.


A personal attack thus is an attack on a person instead of an idea. Put another way, it's a method of dissing an idea by slandering the person who states it.


There is no necessary connection between an idea and the person who holds it.


Attacking an idea or a product by attacking a person who holds the idea, or makes or sells the product, is logically beside the point.


The idea or the product is either good or not good. The moral qualities or motivations of the people who promotes the ideas or the products are also beside the point.


History, for example, is littered with artists whose personal lives didn't match the quality of their creations. The classic example (from classical music) is Richard Wagner who was anti-semitic, slept with his best friend's wife, cheated people out of money, and may have influenced Hitler in his hatred of the jews. Certainly his music was used for propaganda by the Nazis.


Nonetheless, he composed some of the most beautiful operas ever written and they are performed almost everywhere in the world today - including Israel.


In sum: Wagner - bad, The Flight of the Valkyries - good.


In short: If you don't like something, explain why and forget the rest.


Cab drivers and the culture of freedom.


We cab drivers are famous for being opinionated. The saying is that you can't get two cab drivers to agree on anything. I would go beyond this and say that any time you have two cab drivers in an argument you'll have at least five opinions.


It's one of the joys of being a cab driver. It's something we're proud of. We can be stupid. We can be crazy. We can say what we like about anything we like and nobody cares.


We have the right to speak.


At least we did until about a month ago.


Personal Attacks ... on Me.


To address this subject, I'm going to start with myself and, of all things, Open Taxi Access (OTA). I'm using this as example because it's a subject about which few people are emotional. First, I'll tell you why I like the plan. Then, I'll give you the attack.


I like it because the plan;

• Should virtually eliminate no-goes.
• Will give drivers rides in remotes areas.
• Will get customers cabs in remote areas.
• Should improve the incomes of radio players by about 10% - judging by my use of Cabulous.
• Might keep Malcom Heinicke from flooding the city with taxis thus reducing the value of my medallion.

Now - there are legitimate reasons not to like OTA. Charles Rahbone of Luxor Cab doesn't like plan because he thinks that Cabulous should not be given public funds to compete against Taxi Magic and Luxor. I think his argument is a little off point but it's not a personal attack.

The personal attack came as a comment to my blog. I broke out laughing when I first read it.

"Who are you to defend Open Taxi Access," it began. "Are they paying you off?" This was followed by an attack on my imagined sexual behavior and, of course, an attack on my supposed association with Deputy Director Christiane Hayashi.


The anonymous author of this attack then ended by proclaiming that Cabulous should not be given public funds. Unlike Charles Rathbone, he did not give a reason for this. He simply decreed it.


The reason that I laughed when I read this smear is that the cowardly, anonymous idiot who wrote it clearly does not even understand what OTA is. It's an idea not a company. As such, it can't pay me off.


All the schmuc knows is that I'm for OTA and Hayashi favors it; and that's reason enough for him to launch his slanderous assault.


I'm received about 40 comments like this over the last few weeks. They've all followed the same pattern.

• They attack me instead of arguing against my ideas.
• They argue that I'm being paid for speaking against their ideas - to the extent that they can be said to have actual thoughts.
• They accuse me of participating in sexual activity that they probably would love to imitate but will never get the chance.
• And, of course, I'm accused of guilt by association.
• Almost all these attackers tell me that I have no right to speak.

And, of course, all of them are anonymous - meaning that the attackers are too cowardly to identify themselves. 

Mob Mentality.

I've received a few more anonymous comments/attacks since yesterday.

One was sent to my post, This Week's Town Hall Meetings, and goes:


"Bullshit and lies. That's what you are doing. Are you defending your girlfriend. Wait till she get fired. The die is casted. Murai did not defend her. I found Tariq the most powerful and great leader this industry has ever seen."


I know that this will sound ridiculous - like satire - but I believe that Tariq Mehmood actually wrote this. I have three reasons why:

1. Tariq has written me using his name in the past and the word choice, the sentence structure and the mistakes were similar.
2. His statement, "Murai did not defend her." 
3. Chris Hayashi most certainly was defended by Murai but Murai did so when Tariq wasn't in the room.

What Murai said was that she was ashamed to be a cab driver and that the people attacking Chris were acting like "pigs."

The second "comment" went:

"... I do not know what scare you from Tariq or why you are spending time on accusing him. He is not alone ... This is run by Tariq, Tone Lee, Shawni, John Han, Dean Clark, David, John Hanif, Peter, Bill, and nearly 50 others. Medallion holders and some cab are involved ... so not much can be given her ... she will be walked out one day."

Except for electonic waybills, this literary masterpiece barely mentions the policies that Hayashi is recommending. It's clear that these people are not so much interested in changing her plans as they are in hunting her head.

I have two questions:

1. I've disagreed at times with everyone I know on the above laundry list, why should I suddenly agree with them simply because they've become a mob?
2. If they are so united, if there are so many of them, if they are so great and powerful, what the hell do they care what I say?

And, what I'm saying is that Chris Hayashi does not deserve these attacks. Two years ago she saved this industry and she's devoted the time since trying her best to improve it. If she "be walked out," it would be a disaster for the vast majority of drivers and the City of San Francisco.

In short, Murai had it about right.