How Demoting Christiane Hayashi Backfired

To briefly summarize:

San Francisco voters approved Proposition K in 1978 which put an end of the sale of taxi medallions.

San Francisco voters passed Proposition A in November 2007 giving the Board of Supervisors the option of transferring the powers of the Taxi Commission to the SFMTA. The Supervisors did so and the SFMTA took over the regulation of the taxi industry on March 1, 2009.

In January of 2009, Mayor Gavin Newsom, who had promised not to put medallions up for sale if Proposition A passed, came out with a plan to take all the taxis medallions away from the current medallion holders and sell them in order to cover San Francisco's $500 million dollar debt.

Chris Hayashi & the Wisdom of Solomon

Director of Taxi Services Christiane Hayashi has had an extraordinary impact on the cab business that goes far beyond anything you might reasonably expect from an administrator.

Her uniqueness become evident to me the first time I saw her at a Medallion Holder Association (MHA) meeting in 2009, shortly after Mayor Gavin Newsom had threatened steal all the taxi medallions and sell them to cover San Francisco's $500 million debt.

What struck me about her was the absolute absence of any sense of snobbery or superiority of rank.

Maybe I can best get my idea across by contrasting her behavior to that of MTA Board Member Bruce Oka who also came to the meeting. Oka was all smiles but he also let us know how important he was. He told us that he was in a hurry and could only stay a little while. He also hinted at inside knowledge of Newsom's plans that he couldn't quite express to us. In short, he acted like people of position usually do when glad-handing the lower classes.

Hayashi, who undoubtedly knew more about Newsom's plans than Oka did, simply sat down next to a few drivers and talked to them like they were fellow human beings. I've rarely seen anybody who held power over others act so modestly.

A Short History of San Francisco's Taxi Crisis: Bigoty & Cabbies, Part 1

An African American customer of mine was waxing sympathetic.

"I don't know how you do this job," he said, "I mean they're rude, they abuse you, they demean you ... it's almost like being black."

"Except," I said, "I don't have to drive the cab home."

But he had a point. The stereotype is almost exactly the same. Cab drivers supposedly are dumb, dishonest, lazy, dirty and smell bad. Although they're stupid, you have to watch them because they're clever and they'll cheat you if they can.

The cliché is also fed by the fact that many cab drivers are immigrants and minorities of various kind. Snobs who are way too PC to utter a racial or ethnic slur can still get their jollies by slandering "cabbies."

Of course labeling a class of people as inferior leads to more than mere insults. Inferior people are treated differently. If you want to complain about a bus driver, you call your local MTA. If you want to complain about about a cab driver, in most cities you call the police.

Far too many people would probably agree with the former Director of the San Francisco Taxi Commission, Heidi Machen, who wrote, "All of the ex-cons and alternative types who can't make it in another profession ... eventually wind up driving ... taxis."

At best, we're seen as a collection of foreigners and lowlifes.

Certainly San Francisco's "liberal" mayor, Gavin Newsom, was not thinking of cab drivers in February 2009 when he wrote, "Our job (during the recession) is ... to save San Franciscan's from losing their homes, losing their jobs and losing their small businesses."

On the contrary, Mayor Newsom intended to help fight San Francisco's budget deficit by taking the taxis away from San Francisco's cab drivers, selling them at auctions and keeping "most of the money..."

Newsom never mentioned the fact that his plan would cause most of San Francisco's 1,200 taxicab owners to lose their small businesses, their jobs and no doubt their homes.

"This city asset (taxis) has been underutilized and the (taxi) industry has underperformed," said the mayor who ran for election on a platform of balancing the budget. The city was $600 million in debt at the time he spoke.

And he talks about us underperforming?

That's the nice thing about spouting stereotypes. You don't have to worry about facts. If by "underutilized" the mayor means the taxi industry isn't paying its fair share, this is nonsense. The cab business actually pays millions of dollars per year in fees and taxes. Medallion holders alone pay $1.5 million per year in licensing fees.

If the mayor means (as he seems to imply) that he can solve San Francisco's deficit problems by selling cabs, he's dreaming. If he auctioned off all of the fleet's 1,500 taxis for $400,000 a piece, it would indeed cover his deficit. But (legal issues aside) who would buy the taxis in such a scenario?

Can you imagine the outcry that would take place if Newsom tried to pull a stunt like this in another industry? What if he decided to take over the city's trucking businesses? Or beauty salons? Or even massage parlors?

He would be condemned by the unions on one hand and civil libertarians on the other.

But cab drivers? Who cares? They're "underperfoming".

Mayor Newsom fought against a 1.395% business tax that could have raised millions of dollars for the people but would have hit his friends and himself.

Gavin Newsom apparently thinks that somebody has to sacrifice themselves for the good of the city but it's not going to be him or his cronies.

Let it be the cabbies.

Players & Plans: Luxor

While we're waiting to find out when (or if) the Town Hall Meetings will resume, I thought that it'd a good time to glance at the players and their plans.

Reading through them, I've come to realize that I've arrived late at a party that's been going on for years. Many of the proposals are far too detailed to have been worked up in response to Newsom's bomb. While I was whiling away my summers riding camels on the Silk Road or trading vodka shots in Mongolia, cab drivers were feverishly mapping out strategies and engaging in back-door negotiations - all with the dream of being ready for the death of K.

In short, the allegations that I am "uninformed" are true. However, I'm less "uninformed" than any official journalist is likely to be. Reviewing these plans will hopefully lead toward enlightenment. I only have space to look at a few main points. For a full summary check with sftaxi@sfmta.com .

Let's start with Luxor because it has a plan that is both unique and, up to this point, has had the most effect. Drawn up by President and General Manager John Lazar together with Charles Rathbone, the proposal features:

• A $50,000 up front fee to be paid by a K medallion holder for the right to transfer the permit via an auction. It's a striking idea that the MTA liked so much that thy stole it.
  
• A two tiered system that would consist of two classes of medallions and medallion holders.
  

1. Transferred medallions, called "M", could in turn be auctioned off like medallions elsewhere. The transfer fee for these would be 5% - 20%. And, once an M always an M.
2. K medallions would also be maintained as would the List. K cabs would be given out as they are now. Where would they come from? From drivers who died or retired without transferring their medallions and from the City which would issue 10 to 20 new cab permits each year. K drivers from the list would always have the option converting to an M.

• Drivers high up on the list would be able sell or auction off their positions to drivers lower on the list.
• The City would give a few corporate medallions every year to dispatch companies like Luxor as a reward for top performance.

While it's authors see lots of winners (money for the City, protection for both medallion holders and drivers on the List as well an exit strategy), the proposal also has difficulties.

• $50,000 is a chunk of money. It = two and a half years of my life. And up front?
  
• The figure is so high that it doubtless has already destroyed any chance of negotiating a reasonable compromise with the City. Then again, at this point that might not be possible anyway. Threatening to steal all the medallions probably was Newsom's idea of negotiating.
  
• The amount may be so high that only desperate drivers would pay it. Once the old and infirm had cashed out, the medallions would probably move very slowly. Many medallion holders wouldn't be able to raise the money or wouldn't have enough left to retire on after they did sell their medallion.

As for Luxor's plan for a dual system ...

• It appears very complicated and the best ideas are usually simple. On the other hand, San Francisco's taxi industry is very complex. Maybe there are no simple solutions.
• It also seems to me that the supply of K medallions would dwindle fairly quickly as most holders converted to the M permits. Charles Rathbone thinks that 30% of K drivers would chose not convert but even so the number of K medallions would eventually run low.
• For me, that is the major flaw of the dual system. It can't be maintained without constantly putting new taxis on the street.
• And, the cabs would be added solely to make the system work - not because of any real business demand or necessity.

The more I think about this proposal, however, the more I like it. It needs to be tweaked of course but it's bold and creative. It shows a willingness to look at the situation with fresh eyes instead of being mired in the usual us vs them narrative. Now if only Mr. Lazor could put that $50,000 back in his paper bag.

Twain, Groucho & Mencken on Politics and Politicians

"Politics is the art of looking for trouble, finding it, misdiagnosing it and then misapplying the wrong remedies."

--- Groucho Marx

"Under democracy one party always devotes its chief energies to trying to prove that the other party is unfit to rule - and both commonly succeed, and are right."

--- H.L. Mencken

"The whole aim of practical politics is to keep the populace alarmed - and thus clamorous to be led to safety - by menacing it with an endless series of hobgoblins, all of them imaginary."

--- H.L. Mencken

"In religion and politics people's beliefs and convictions are in almost every case gotten at second-hand, and without examination, from authorities who have not themselves examined the questions at issue but have taken them at second-hand from other non-examiners whose opinions about them were not worth a brass farthing."

--- Mark Twain

"When politics enter into municipal government, nothing resulting therefrom in the way of crimes and infamies is then incredible. It actually enables one to accept and believe the impossible."

--- Mark Twain

"The political and commercial morals of the United States are not merely food for laughter, they are an entire banquet.

--- Mark Twain

Remind you of anyone?

Gavin - the Sun King?

Faced with a $600 million debt many politicians would consider taxing the rich since they have the most money but not California democratic gubernatorial hopeful Gavin Newsom. He's fought against a 1.395% tax that would have raised "tens of millions" but would have been imposed upon his own businesses. Instead, the Mayor wants to force cab drivers to sell their medallions and place a tax in excess of 50% upon the proceeds.

Newsom explained his reasoning for this plan by saying: "This city asset (the medallions) has been underutilized" and the cab drivers have "... underperformed."

He also wants to make a "gigantic, order-of-magnitude change" in the way things are done. He apparently plans to start with the Democratic Party. You know the party of: the Fair Deal, the New Deal, the Party of Labor, the Party of the People.

To heck with Obama, Franklin Delano Roosevelt and all the Kennedys. Gav is harking back to an more ancient tradition - one where rulers use their lower classes as "assets" to balance their budgets.

• Czar Peter the Great of Russia used the forced labor of serfs to build the city of St. Petersburg. He also thought his peasants "underperformed" so he worked over one million of them to death.
• The Maharajahs of India took a high percentage of their peasants' crops to fill their own coffers.
• This practice was taken up by the British to pay their governmental expenses when they ruled India. Mahatma Ghandi grew to fame by fighting against such excessive taxes.
• King Louis XIV of France, the Sun King, and his minister Jean Baptiste Colbert used corvee (free) labor to balance a budget depleted a lack of taxation on the nobility and his own extravagances. This practice ultimately led to the French Revolution.

All of which leads us to the question: Should Gavin Newsom be running for governor on a Democratic ticket or a Royalist one?

Millionaire Mayor’s Plan to Bail Out San Francisco by Soaking Its Cab Drivers: Part 1.

 San Francisco Mayor Gavin Newsom who has used his movie star good looks and mastery of misleading sound-bites to become a leading Democratic California gubernatorial candidate, recently tried to fix his city's $600 million deficit by attempting to take 1,500 taxi medallions away from their owner/drivers and sell them at an auction.

• Saying vaguely that the city "would keep most of the money" from the auction "but some would go to the drivers," Newsom wanted the profits to go toward regulating the taxi industry and helping finance San Francisco's sinking public transportation system.
• At approximately the same time as he tried to impose a sales tax of 51% to 99% upon cab drivers - one of the lowest paid groups of workers serving the city - he also tried to veto a ballot measure to re-impose a 1.395% Gross Business Tax - which would raise far more money. Newsom, who along with billionaire Gordon Getty owns numerous bars and restaurants that would be affected by the business tax, said that while the proposition "would raise city taxes by tens of millions ... raising taxes does not necessarily raise revenue."
• The San Francisco Board of Supervisors overrode the Mayor's veto and put the measure on the ballot.
• Newsom, who has also claimed that the "challenge" for his administration is to save "San Franciscans from losing their jobs, losing their homes and losing their small businesses" would have taken jobs and businesses away from as many as 1,000 cab owner/drivers with his plan. They wouldn't have to worry about losing their homes, however, because very few cab drivers can afford one.

When over 100 angry cab drivers (many of whom were pretty good at sound-bites themselves) showed up at an MTA meeting to protest the plan, Newsom had it withdrawn.