The Uniform Lease: Part One

The February 21, 2011 Town Hall meetings for drafting a "Uniform Lease" was lead by Director of Taxi Services Christiane Hayashi with help from Enforcement and Legal Affairs Manager Jarvis Murray. The evening session was attended by the UTW's Mark Gruberg, Bay Cab's Roger Cardenas, Frank Fahey, Murai, myself and others along with TAC members Athan Rebelos, John Han and Bill Mounsey.

A document had already been outlined during the afternoon session from various existing leases including those from Green and Yellow cab companies.

The thrust of the "Uniform Lease" was to continue the myth of the "Independent Contract" while attempting to give drivers more protections and rights than they have now (not a difficult task).

Myth? The Independent Contract was intended as a agreement between people or groups with more or less equal power. It is an accurate description of the relationship between taxi companies and medallion holders. However, applying this concept of independence to groups of non-medallion holding drivers who are powerless and (from the companies' standpoints) infinitely replaceable is to create a fictional misrepresentation of reality.

The absurdity of this fantasy becomes clear in the first two definitions of a section called,

Employee/ Independent Contractor status

1. Driver will not be treated as an employee for any purpose, including state and federal income taxes, the Unemployment Tax Act, and company will not withhold taxes.
2. Driver has a right to apply for Worker's Compensation and Unemployment benefits under California law. Company will not oppose any claim for such benefits on the the basis that the driver in an independent contractor. (My italics.)

What?

But I digress. For the moment, this Uniform Lease is to be between drivers and color schemes

Color Scheme Agrees

     To provide, maintain and insure a Vehicle in good condition and to provide a spare if the vehicle breaks down. Etc.

     The company also agrees -

• Driver has absolute and exclusive rights to use, operate and control a licensed San Francisco Taxicab ...
• Driver also "has complete discretion" as to how, if and when to work; when and if to take breaks.
• Driver is also not required to report locations to the company or take or respond to dispatched calls.

All of which, as John Han pointed out, define the driver as independent contractor. Han went on to say that he thought drivers should actually be treated as employees.

Director Hayashi responded by saying that she thought that doing so would "require tearing the industry apart and putting it back together again in a different way because the current model does not assume employee status and cannot economically support it."

John said that such a tear down and re-assemble might be a good idea.

Required Driver Conduct

Driver Agrees

• To maintain the required licenses and permits.
• Take care of tickets.
• Inspect the vehicles before using them.
• Report any collisions or anything else that might risk liability to the companies.
• Etc

Duration

The proposed contract would be an automatically renewable 30 day contract that could only be ended by a 30 day notice and/or must have cause.

This last clause is different than many current contracts which state that the contracts can be terminated without cause - a situation that gives tremendous power to the companies.

Under the Uniform Contract

The driver could Terminate for Cause

• A material breach of lease terms
• If the driver has notified the company of unsafe vehicles or conditions and the company fails to correct said conditions

The Company could Terminate for Cause

• A material breach of lease terms
• Driving under the influence or reckless driving.
• Fail to report an accident.
• Etc

Next -

Security deposits - Yes but?

Pre-pay by 28 days - No

Vacation /sick time

Mediation Resolution?

Pro rata - probably

Driver training - definitely


The photo has nothing to do with leasing but for some reason I kept thinking about this Chinese mountain lake during the discussions and I thought I'd share it with you.

MTA Board OK's Peak Time Cabs; Supes Spank Cabbies

The MTA Board and the Board of Supervisor both met yesterday and both dealt with similar cab issues - changing and clarifying the transportation code so that it would be easier to stop illegal activities - including doormen selling rides to illegal vehicles and illegal cabs and limos stealing rides from licensed taxicabs in San Francisco.

The legislation had the support of almost everybody in the taxi industry (drivers, owners, managers and medallion holders/drivers). It seemed like no-brainer and, for the MTA, it was. Malcom Heinicke spoke highly of the measure.

The Board of Supervisors, however, had a different take on the subject. Two amendments were added to the legislation by Supervisor Scott Wiener of District 8. One of them called for Taxi Services to report about progress in improving service 4 times a year. The other called for reducing penalties given to illegal limos and cabs from $2,500 to $5,000 down to $1,000.

Directory of Taxi Services, Christiane Hayahsi was unable to attend the meeting because she had jury duty. Attorney Michael Harris was supposed to speak in her place but apparently was unable to do so because the amendments were approved prior to the meeting.

Nothing like transparency, no?

What was the reasoning of Supervisor Wiener and the rest of the Board? The illegal vehicles are supposedly filling a niche and thus doing a public service???

There is more than a bit of irony here:

1. Supervisor Wiener is from the Castro - that's right! The second or third best served district in San Francisco. Cabs flood the area 90% of the time and I've never seem an illegal taxi there. Well ... everyone has their servant problems.
2. The amendment would give tacit support to a group of people who pay no license fees or business taxes and put customers at risk by not being insured. Or, is the paltry $1,000 Wiener's idea of a business tax?
3. The only service I've ever seen illegal taxis and limos do is steal my fares - often with the collusion of doormen who apparently would also have their fines reduced.
4. The only reason illegal cabs and limos have a niche is for the same reason prostitutes do - their expenses are almost non-existant and nobody has systematically gone after them.
5. After backing the amendment, members of the Board spent a fair amount of time urging each other to support low-paid workers of various kinds. Apparently they don't think cab drivers, who are among the lowest paid workers doing one of the most dangerous jobs in the country, are worthy of such consideration.

This isn't a done deal. The proposal with the amendment has to be "read" again at next week's board meeting and then will be voted on the week after that. As I understand it, unless the legislation goes back to a subcommittee, there will be no public comment allowed on the subject.

This might be a good time to remind our respective supervisors that we are not the uncouth, illiterate serfs that they appear to think we are. It might be good to let them know that we are voters - voters who talk to around 15 or 20 other voters each every day. ( The math is 1500 cabs x 2 shifts x 20 = 60,000 potential voters a day.)

Drivers can find the phone numbers and e-mail addresses of their respective supervisors at SFGov.org. You can find the voters in your taxis.

Peak Time Permits

The MTA Board also passed a resolution to send a proposal for Peak Time Permits to the Taxi advisory Council in order to work out a plan.

Director Malcom Heinicke was very happy because this was his baby and he was very pleased to see drivers as different as Tone Lee, Carl Macmurdo and myself all backing the idea.

However, there were, and are many drivers, who are strongly against putting additional cabs on the street - including possibly myself. My position depends upon what they do, how they do it, and who benefits from it. The devil is in the details.

At any rate, the TAC meetings should be interesting for a change. The next one's  on March 15th - the  Ides of March - the date when Julius Caesar was assassinated in 44 B.C.

Should we beware the Ides of March?

How to Stop Illegal Taxis and Limos

Actually - it ain't that hard. I mean, it's not like the phony roadsters are difficult to find.

This is what you might call a classic illegal vehicle. Is it a cab? Is is limo? Or, is it both a cab and a limo?

Whatever - this one's been around for a couple of years, apparently unmolested by any form of enforcement or the police.

As the old saying goes, "where there is a will there is a way." But if there is no will, what you get are illegal limo/taxis.

Sometimes they actually look like cabs. But the one below is lacking the Yellow triangle and has a disconnected phone number.

Sometimes they just steal a name and splash on an approximate color.

Sometimes they don't try hard enough. This one stole Luxor's colors but gave it a generic name.

 If you look closely you can see 401 on the front door and 778 near the back.

"Yellow" is popular word for naming pseudo taxis but it covers a wide variety of sins.

Some of these vehicles might be legal in places like Marin.

Some are just plan ridiculous.

The phone number on the above faux taxi actually did work. The guy who answered wouldn't tell me what city he was in but he did say that he was no longer in the cab business.

Whatever their virtues or lack thereof, these illegal vehicles all have 3 things in common:

1. They don't pay business taxes - at least not in San Francisco.
2. They don't pay license fees in San Francisco.
3. Insurance companies void auto polices if the vehicles are used as taxis or for illegal activities. Therefore, people riding in these vehicles are not insured. 

The SFPD talks a good game when it comes to illegal cab and limo enforcement but the truth is that they're just too busy. In fact they are so busy that they can't seem to gave a ticket to an illegal vehicle unless they're paying themselves overtime.

In May 2010, Chief Murphy promised us a direct line that we could use to report illegal vehicles. As of this morning, nine months later, he still hasn't found the time to set up that phone number.

I checked with the police and you can call 311 to report an illegal taxi although the officer I spoke with thought that 311 was more for complaints about real taxis.

When you call 311 they are very polite and what they do is politely pass your complaint on to the "Taxi Commission" - which no longer exists.  

We cab drivers know either where the illegal taxis and limos are or where they are likely to show up. All we need are a few good men and women who have the will, the authority and a systematic plan to put these clowns out of business.

If the Board of Supervisors passes Taxi Services Director Christiane Hayashi's proposed changes in the transportation code on March 1, 2011, that's exactly what Taxi Services should be able to do.

Important Public Safety Committee Meeting

The Board of Supervisor's Public Safety Committee, consisting of Supervisor Malia Cohen, Ross Mirakarimi and David Campos (photo), will meet tomorrow, Thursday February 17th, City Hall room 250.

This is an important meeting because they probably will vote on whether or not to pass proposed legislation for changes in the Transportation Code on to the Board of Supervisors.

The legislation is primary aimed at making illegal taxi and limo enforcement easier and more effective. But it also makes it a misdemeanor for doormen and others to solicit tips. In addition, it will allow Taxi Services to hire more enforcement personnel.

City official have been talking about stopping these illegal practices for the 25 years that I've been in the cab  business. But this legislation, drawn up by Director Chris Hayashi of Taxi Services, could actually lead to realistic enforcement.

At the last Public Safety Committee meeting, however, the supervisors appeared to be more interested in discussing how to improve services in the neighborhoods. Well ... this has also been a problem for the 25 years I've been in the business. But it's a different subject.

It's apples and oranges. Letting illegal limos and taxis run rampant isn't going to improve cab service in the neighborhoods. The illegal vehicles rarely go there.

The proposed changes in the Transportation Code are part a multifaceted plan by Director Hayashi to reform the taxi business in San Francisco. She has several ideas on how to improve service but - it's a different subject.

If the legislation is voted down, it might be another 25 years before somebody tries to take on the illegal limos and taxis in this city again.

To repeat: the Public safety Committee meets tmw in room 250 of City Hall at 10:30 am. The item is number 9 on the  agenda but these meeting tend to move quickly.

The proposed legislation reads as follows:

[Transportation Code, Police Code - Motor Vehicles for Hire and Enforcing Parking Laws] Sponsor: Chiu Ordinance amending Article 3 of Division I of the San Francisco Transportation Code to allow certain Municipal Transportation Agency employees to enforce specified parking laws and order removal of vehicles, and amending Article 7 of Division I of the Transportation Code to make it a misdemeanor to operate a taxi, a dispatch service, or a color scheme, or to drive a motor vehicle for hire, without a permit, to solicit or accept payment for referral of passengers to a motor vehicle for hire, to solicit or accept payment for motor vehicle for hire shifts, assignments or dispatch calls, to knowingly make false or misleading representations in connection with application for, renewal of, possible revocation of, or operation of a vehicle pursuant to a permit issued under Article 1100 of the San Francisco Transportation Code, to refuse to pay the legal fare to a driver of a motor vehicle for hire, and to charge excessive rates for transport in a motor vehicle for hire; and amending the San Francisco Police Code by deleting Sections 1078, 1089, 1105, 1110, 1132, 1135, and 1145.

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.