New Town Hall Meeting on February 22nd

I'm passing along this notice from Taxi Services Director Chris Hayashi.

Hopefully there will be a "Drivers Lease" discussed as well.

If nothing else this should be a lot more fun than the TAC meetings where everyone acts like they're sitting on corncobs.

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.

Cab Company Scams: Numero Uno - “Tipping”

It doesn’t take long for a new cab driver to realize the truth or falsity of certain sayings. Power obviously does corrupt. W. C. Fields, on the other hand, was wrong when he said, “You can’t cheat an honest man.” You can cheat anybody who’s hungry for a job.

In fact, a student who wanted to know why labor laws and unions exist could do worse than spend a month or two driving a taxi in San Francisco. It’s like a third world country that’s been corrupt for so long that nobody even remembers what corruption means. It’s just business as usual. The way things have always been and always will be.

The Independent Contract has given cab companies almost absolute power over their drivers and  business as usual means running a variety of petty scams designed to separate the drivers from their money. Underhanded practices are so widespread in this industry that I’m not going to name names (although I can if you like) from fear of failing to mention a deserving party.

Despite the fact that “tipping” is now officially illegal, it remains the number one scam. “Enforced tipping” is practiced by the majority of taxi companies in San Francisco  and  takes a minimum of $10 million to $15 million a year away from the drivers.

The official, legal average gate fee - set by the city - is $104 per shift. The standard rule of thumb for “tipping” is “$5 in and $5 out with $2 for the gas man.” At least that’s what I was told I should “tip” by two managers at two different companies. I’ve been told by drivers that some companies require up to $20 per shift. This makes the actual gate somewhere around $115 to $130 per shift.

When you consider that the average shift brings in about $120, drivers give 10% or more of their incomes to the companies - just like the 10% we catholics used to give to the Church when I was a child.

As far as I personally know, the only taxi companies that tell their drivers that they don’t have to tip are Green Cab and Richard Hybel’s Metro Cab. There may be more.

A management type recently took umbrage with me (If you’ve always wondered what “umbrage” is, I can now tell you that it’s when a guy turns blue in the face and screams at you.) for “slandering" his company by claiming that they practiced “enforced tipping.” This was especially interesting to me because I don't think I've ever mentioned his company in my blog.

But, he had a point. Drivers aren’t literally “forced” to tip. They aren’t whipped or beaten. Nobody gets thrown off a roof. On the other hand, when I stopped tipping at one company, I found myself sitting around waiting a couple of hours a shift for a taxi I could drive only to be given cabs that broke down when I did go to work - including several with bad brakes and one with no brakes at all.

Numerous drivers have written me about similar experiences. If driver doesn’t tip he or she will wait hours to go to work or not be allowed work at all, won’t get good radio orders, will be given bad (sometimes dangerous) cars, will never get a good shift and will be the first person to loose a lease when a company looses a shift.

So “enforced” is indeed the wrong word. But, so is “tip” which, by definition, is “a gratuity that is voluntarily given.” A more accurate phrase would be a “coerced fee.”

This practice is so deeply ingrained in taxi subculture that the mere public mention of it can get  a person in trouble. Despite the fact that I’m a medallion holder and can’t really be messed with, I was treated with extreme hostility by certain cashiers and dispatchers at a former company for simply writing a few posts about my experiences with tipping.

There’s good reason for such animosity. Cashiers and dispatchers (I’ll call them all dispatchers from now on because at some companies their duties overlap and cashiers usually dispatch taxis if they don’t dispatch orders.) are paid minimum wage by the cab companies - if they are paid at all. Some of them work off the books. A few years ago at one company, the dispatchers reportedly were paid minimum wage but they also had to pay the manager a “gate fee” to work their shifts.

The smallest amount that a dispatcher has ever told me that he made was $200 per shift. The most was from between $500 to $700 a shift. I’ve also been given figures of between $400 to $500 a shift. I think it would be safe to set the average at somewhere between $300 to $500 - net. Yes, that works out to $100,000 per year.

Once again, let me remind you that working cab drivers averages $120 per shift take home pay or around $25,000 a year.

Which brings up the question of whether or not managers themselves dip into the “tip jar”? Is it reasonable to think that the kind of people who set this system up would choose not to profit by it? I mean, there is around $30,000 per day in cash going through those dispatching windows. No, management wouldn’t think of touching it.

There is considerable anecdotal evidence (conversations with people who have worked in the dispatching rooms, etc) to the contrary. At least some management types take their cut. According to one story, the owner of a cab company once started a shuttle service from his share of the tips.

I think that many medallion holders support the system partly because they think they wouldn't make as much money if dispatchers were paid a decent salary and partly because they think that they paid their dues by tipping before they had their medallions and that newer drivers should do the same. It's a way for the medallion holders to get back what they paid out.

But the amount of money taken in by "tipping" is far in excess of the standard salary for dispatchers in similar industries and I won't live long enough to collect the $40,000 to $50,000 that I was coerced into paying. If I'd invested that money, I wouldn't need a medallion

This is  a  corrupt system that has existed for over 30 years. That’s way beyond enough. If the taxi business is going to be reformed, let’s do it all the way.

Dispatchers, cashiers, gasmen and order takers all do valuable jobs and they should be well paid. But, they should be paid by the companies - not by drivers who are barely making minimum wage to start with.

Cabulous and Open Taxi Access

John Wolpert (photo) and Don Carmel of Upstart Mobile Corporation gave a presentation on Cabulous and Open Taxi Access at the Jan 24th Taxi Advisory Council. Simply put, their goal is to give open access to every taxi driver and fleet in the City.

Although most drivers are somewhat familiar with Cabulous, Upstart Mobile's plan goes beyond smart phones to include:

• PSAs (Not to be confused with PSAS.)
• City web sites
• Hospitals, public facilities, smaller hotels etc.

The app can be used either by individual drivers or by taxi fleets.

Open Taxi Access (OTA) is also called "Cabs on a Map" because it shows available taxis located at various points on a map of San Francisco. If a customer wants a taxi, he or she can contact a specific one by smart phone, computer of other online device and send out a call to said cab. Then, the driver can accept or reject the request. If the driver accepts, the customer can watch the taxi on the map as it progresses toward his or her location.


Mr. Wolpert said that this visual aid helps to greatly reduce no-gos. Cabulous also will have a feature that will allow drivers to call and make voice contact with the customers without giving out the drivers' phone numbers - this should also help keep the fare waiting until the cab shows up.

Cabulous has built in protections against illegal drivers hacking into it. Cabulous will only recognize drivers by their A-Card number with a password and they will be linked to the appropriate color scheme. Thus a cab drivers can't take out their own cars and use the system either.


During an e-mail exchange, John wanted to make it "... very clear ... that OTA is not anything remotely similar to centralized dispatch. Centralized dispatch means one dispatch operation takes over and removes control from fleets and drivers. OTA leaves control in the hands of fleets and drivers but gives them a simple way to work together on certain websites.

Wolpert added that using "technical openness actually (maybe ironically) results in" fewer no-gos. "Because we run 'openly' across all fleets platforms, our system can know when two or more separate fleets are being" contacted "from the same location, phone number or address with the system.

I think the advantages of Cabulous and Open Taxi Access should be obvious to veteran drivers:

• Customers in outlying areas should have even more taxis to choose from than the 3 or 4 cab companies they usually call - and with a much greater chance of having one show up.
• Non "radio playing" drivers might start taking orders when they find that they don't have to be lonely in the Sunset thus giving the city better coverage.
• And of course drivers in these outlying areas should find themselves getting many more rides out there than they do now since dispatched orders would be available to drivers from all companies instead of just a few.
• Etc.

The no-gos caused by people using "dumb" phones to call several companies won't disappear nor will people stop stepping outside to flag taxis but both of these activities should be greatly reduced if the system is implemented.

Green Cab and Citywide dispatch are already using Cabulous as of course are numerous individuals. Wolpert says that drivers using the app are averaging five to ten extra rides a week.

You can check out Cabulous and Upstar Mobile at htttp://cabulous.com/tag/upstart-mobile/page/2/

Flashing and Other Crimes

The SFPD have resurrected and re-interpreted an old law concerning the inappropriate use of flashers and are now ticketing cab drivers who use flashers when they are picking up or dropping off fares.

Vehicle Code Section 25250 says that: “Flashing lights are prohibited on vehicles except as otherwise permitted.” 

Vehicle Code Section 25251(a) lists the circumstances in which flashing hazard lights are permitted:

        (2) When disabled or parked off the roadway but within 10 feet of the roadway, or when approaching, stopped at, or departing from, a railroad grade crossing, turn signal lamps may be flashed as warning lights if the front turn signal lamps at each side are being flashed simultaneously and the rear turn signal lamps at each side are being flashed simultaneously.

        (3) To warn other motorists of accidents or hazards on a roadway, turn signal lamps may be flashed as warning lights while the vehicle is approaching, overtaking, or passing the accident or hazard on the roadway if the front turn signal lamps at each side are being flashed simultaneously and the rear turn signal lamps at each side are being flashed simultaneously.

        (4) For use on authorized emergency vehicles.

        (5) To warn other motorists of a funeral procession, turn signal lamps may be flashed as warning lights on all vehicles actually engaged in a funeral procession, if the front turn signal lamps at each side are being flashed simultaneously and the rear turn signal lamps at each side are being flashed simultaneously.”

Director of Taxi Services and Taxi Advisory Council Liaison Christiane Hayashi said at last Monday's TAC meeting that she interprets the law differently and is trying to work with the police to get them to change their policy. In the meantime, she suggested that turn signals might be an alternative when stopping for customers in order to avoid being ticketed by the police for the use of hazard lights.

I experimented with this technique Tuesday night and concluded that it was much like playing Russian Roulette - especially when pulling off to the right at corners. If you put your right signal on, the car behind you is likely to think that you're turning and smash into your rear end. If you put no signal on but merely brake, the driver might conclude that you're only slowing down and smash into your back end. If you put your left signal on, the dude might conclude that you're a Darwin Award candidate and try to kill you before you breed. In short, it's a lose-lose-lose tactic.

Jim Gillespie of Yellow Cab thought that the PCOs were causing much more of a problem as did John Lazar of Luxor cab.  Mark Gruberg of Green Cab added that there had been an upsurge of tickets during the last month.

Hayashi said that she had been talking with SFMTA Enforcement as well as the SF Bicycle Coalition with some success. It is now supposed to be okay to pick up or drop off in bike lanes and in bus stops - as long as the cab pulls up as far as possible. It's just that the PCOs don't appear to have gotten the message.

One driver said that he had stopped to take a radio call on Market between 3rd and 4th when a cop told him that he had to move along. He did move along and a got a ticket in the mail anyway.

Another person pointed out that elderly people might need to be dropped off near a corner with a ramp.

Hayashi said that you should protest the tickets by following the instructions on the reverse side and let Taxi Services know when you have received a ticket while loading or unloading passengers.

John Han, who has written on this problem in Taxi Town SF said that he had fought two tickets by arguing that he wasn't supposed to get tickets because he was a cab driver and lost both times.

My take on this is that the cops and the PCOs see us as a revenue stream and an easy  target with which to hit their quotas. I think that the only chance we have of influencing their behavior is to go over their heads.

Therefore, I think the best course of action is to show up at the SFMTA Board and Police Commission meetings until they stop giving us ridiculous tickets. I'm not talking about being rowdy. Just go up and state your case.

The next MTA Board meeting will be held on January 18, 2011 at 1 pm in room 400 in City Hall.

The Police Commission meets every Wednesday. The times vary.

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.

Fleet Taxis and Employees

The dawn of the New Year seems a good time for exercises in nostalgia and theory.

President of Desoto Cab, Jane Bolig, wants a return to the good old days when cab companies owned corporate permits. In a TaxTownSF post,  Remembrance of Peak Times Past, she writes that San Francisco didn't need Peak Time permits back in the good old 60's because Old Yellow Cab owned its medallions and didn't have to pay the medallion holder the fees that cripple companies today.

"To pay them (the fees),"  Jane says, "they (the cab companies)  have to put out all their cabs every shift, every day of the week, every week of the year. That is why drivers fight for rides most Sunday mornings and passengers can’t find cabs any Friday night."

Old Yellow was apparently so profitable that they could "hold back unneeded cabs (sometimes equaling 40% of its fleet)" on slow days and put cabs out when it was busy. "It’s why we discuss peak time medallions in 2010," Jane says, "and why we didn’t in 1968."

The thrust of Jane's essay is that allowing cab companies to have fleet medallions would cure all our peak time problems.

Simple as that!

Unfortunately, Jane is leaving out parts of the equation. Back in the good old days, cab drivers were all employees and belonged to unions. The real reason why Old Yellow didn't put the taxis out at slow times was that they split the meter with the drivers - to whom they first had to pay minimum wage. It wouldn't have been profitable for the companies. In fact, they could have been the ones losing money on bad shifts instead drivers who can't cover their gates today.

Jane also seems to be envisioning combining fleet taxis with a "gates & gas" system. Well ... it certainly would be a way for taxi companies to maximize profits but would they really hold back cabs on slow days? During a recession when people are desperate for any kind of work?

We're talking about the characters who currently manage cab companies in San Francisco - not in Shangri la. In short, fat chance.

Ms Bolig appears to be waxing nostalgic about the other side of the problem as well by assuming that Old Yellow covered the City better back in the good old days. Was this true?

I have word-of-mouth, anecdotal evidence that the service really was better in the neighborhood but this was largely due the fact that companies split the meter and paid minimum wage to the drivers. The companies made their money by actually dispatching taxis to pick up orders and drivers could afford to work areas like the Sunset or wait at the cabstands which were spotted around the outlying areas of the city.

But, how about coverage at peak times and on Friday nights?

San Francisco had a population about 10% lower than it does now and about half as many taxis. 1968 was peak time for the Vietnam war. Sailors and solders embarked for Asia from here. According to the old, old timers this was one of the busiest eras in San Francisco taxi history.

So ... Right Jane,  nobody waited for a cab back then.