Thoughts on Flywheel/Desoto

Desoto is changing its name to Flywheel and within two months the old blue & white Desotos will all look like the above pic. The first cabs are already on the street.

Flashier, no?

Brilliant, yes!

The new color scheme acts as an advertisement for the app and the app is advertisement for the company.

However, a bit of confusion and hostility surrounds the change.

First the Confusion

Drivers at other companies who use the Flywheel app are apparently worried about losing rides. They shouldn't be.

Part of the agreement between Flywheel management and Desoto Owner Hansu Kim is that that orders will continue to be dispatched in the same way that they always have – the ride goes to the closest cab regardless of company.

What Desoto is counting on, according to part owner Matt Gonzales, is an "upsurge of advertising" that will cut into the TNC's market share and hopefully spread the wealth to everyone.

There some evidence that this is already happening. According to former Flywheel manager Sachin Kansel, the number of Flywheel orders has gone up six times over the last year. 

Flywheel also has recently picked up several investors and a new CEO Rakesh Mathur who intends to use the money to advertise and expand the Flywheel brand across the country.

In addition, former Uber and Lyft customers are coming back to Flywheel because the TNC drivers are generally inept and don't know where they are going. The refusal of Uber and Lyft to fingerprint their applicants or train their drivers guarantees a continued flow of thugs and incompetents into the future. 

As Flywheel becomes a more widely known brand we'll be getting more and more riders back – plus new riders who can now get cabs because of Flywheel in neighborhoods where they couldn't before.

In addition, Hansu Kim says that Flywheel is working on a new version of the app that will do things that Uber and Lyft apps can't. A current example of that is the ability to make advance airport reservations.

Now the Hostility

Luxor and Yellow Cab companies don't like it. Well ... of course they don't. The idea is bold, innovative and creative. As the leading dinosaurs of the taxi industry, John Lazar of Luxor and Nate Dwiri of Yellow have been doing everything they can to help themselves, and the industry, become extinct.

They are the ones who killed Open Taxi Access over four years ago. As you might recall, the SFMTA had allocated $405,000 to set up a universal app in all the taxis and John Lazar reputedly went backdoor to his former school mate and then buddy, Major Ed Lee, causing the measure to mysteriously disappear from the MTA's agenda.

At the same time, Yellow was feverishly holding back radio orders so that they could petition for more cabs. Let me spell this out: They were deliberately giving bad service so that the City would give them more medallions.

When Uber et al attacked and the dinos finally realized that taxi apps were the future, instead of embracing Flywheel as the de facto universal app, Dwiri had a relative design a Yellow app (that works about as well as the old Yellow dispatching system – that is to say, badly), and Luxor continued to back Taxi Magic – a dinosaur in its own right.

Even to this day, when Yellow can't begin to fill its shifts, they still keep drivers waiting two or three hours to start work so that Yellow can extort more money in tips. That there might be a relationship between their treatment of their drivers and the dwindling numbers of same has apparently never occurred to Yellow management.

Whatever – If it hadn't been been for the geniuses at Luxor and Yellow, Uber and Lyft would never have taken the market-share that they have.

BTW – Uber came out with a "study" that saying they did $500 million in business in San Francisco last year while the taxi industry only took in $140 million. But Flywheel calls this bullshit (don't blame me for the crudeness. I don't use such words – in print.) The actual figure should be $400 million for the taxi business.

A Few Problems

One is that the Flywheel paint job does not make it clear that the taxi also takes flags and credit cards. In addition, the cabs I've looked at don't have the advertising space on top. That space could be used as part of a campaign for Flywheel/Desoto and against Uber – could be much effective than a bus because taxies go more places.

Another is that Flywheel has a website and blog that is slick and up to date but, as an advertising tool,  could be more effective.  The contrived pic in the blog makes it look a little too much like Lyft light.

There are also continuing problems with the driver support system such has holding drivers off the app for various minor reasons. I personally am not sure what all their rules concerning accepting orders and cancellations are.

Sachin Kansal and Steve Humphrey have moved on ("happily" they say – Humphrey upped his investment in Flywheel). Therefore, it seems a good time for the new management to meet with the drivers and take a look at some of the policies that might be changed, clarified or improved.

MTA Board Okays Electronic Taxi Access

The SFMTA Board unanimously approved Electronic Taxi Access (ETA) which will lead to the development of a platform allowing smart phone apps to show all the available taxis in San Francisco on a single map.

Director of Transportation Ed Reiskin (photo), who introduced the measure, said that he thought ETA should have been implemented two years ago.

President John Lazar and Charles Rathbone of Luxor Cab along with Nate Dwiri and Bill Gillespie of Yellow Cab spoke against the measure as did a spokesman for Taxi Magic. They talked about the money that they had spent developing wonderful apps of their own which made a universal app unnecessary. Gillespie said that Yellow was working on a new advanced app that would let drivers talk directly to the customers.

Well ... I could talk to customers on Cabulous (now Flywheel) three years ago which is my way of pointing out that much of what these companies are doing is re-inventing the wheel. In any case, most of their innovations are beside the point. The creation of multiple apps from multiple companies merely exacerbates the problem of the customers having too many choices with no way of knowing what the best choice is.

ETA will allow the customers to find the closest available cab and will eliminate the problem of two or three cabs from different companies going to the same address. This should greatly reduce the dreaded no-go, free up more cabs to pick up more orders and lead to better coverage in the neighborhoods.  It's best idea to improve service that anybody has come up with in the thirty years I've been in the taxi business.

The details of how this will be implemented have yet to be worked out. After the Board meeting, Director Chris Hayashi said that she will be holding meetings involving Frias Transportation Infrastructure, the cab companies and the public as to how best to implement the technology. Issues such as allowing companies to keep their own dispatch systems and brands as well as pre-tipping will be studied and discussed.

Too Many Cabs

The indefatigable Tariq Mehmood brought in somewhere around fifty drivers to speak against more cabs and Electronic Waybills. He handed out a script that they were supposed to follow which ended with a call for Tariq's favorite fetish - firing Director Hayashi. It turned out that Electoronic Waybills were Okayed by the Board over a year ago and were not on the agenda. As for Hayashi ... apparently only a couple of drivers shared Mehmood's weird obsession.

What most of the drivers did speak about was the decline of income caused by unfair competition from the illegal, uninsured vehicles of Lyft and Sidecar etc. Many drivers said that their were making 50% less than they were making a year ago. One driver said that he had started driving for Uber but quit and went back to Yellow after Uber put out so many fake cabs that his income at Uber dropped in half. Medallion holders spoke about being unable to find drivers to fill shifts. A little humor was injected by a driver named Ben who talked about a date that didn't go too well with a woman who turned out to be a Lyft driver.

Director Ed Reiskin, who is apparently powerless to go anything about this, suggested that the drivers tell their tales at the CPUC hearings that begin on April 10th.

Good idea.

Tariq - Or Actions Speak Louder Than Words.

Note the irony. Tariq Mehmood, who proclaims himself to be the "powerful and great leader of the drivers" siding with Yellow Cab in trying to remove Deputy Director Christiane Hayashi.


Of course Yellow, Luxor, Town and Checker, not the drivers, would be the major winners of a successful Hayashi coupé.


There are several reasons for this.

• These cab companies coerce their drivers to tip and Hayashi has made this practice a $5,000 misdemeanor. She recently started busting limos. Enforced tipping and other illegal company activities are also on her hit list.
• The recent meter increase did not include a gate increase. The companies, especially Luxor, blame Hayashi who drafted the legislation.
• Hayashi helped create and has promoted Open Taxi Access (OTA) which Luxor and Yellow hate.
• Yellow and Luxor want 500 taxis to go to them - now. Hayashi doesn't want to put cabs out without public hearings.
• John Lazar of Luxor wants himself and his two sons to be given medallions without following the rules. Hayashi thinks medallions should only be given to working cab drivers.

I could go on and on but the bottom line is that Yellow and Luxor are used to running the taxicab industry through backdoor politics and Hayashi has created a culture of transparency through her Town Hall Meetings. For the first time, medallion holders and regular taxi drivers (not just the owners) have a say in how their business works.


So, why is Tariq Mehmood, "the driver's advocate," lining himself up with guys like these?

Well, fact is - he's done it before. Awhile back, when Yellow Cab was trying to force their drivers to pay $2,000 or $3,000 in gates a month in advance, Tariq attacked the UTW which was fighting to stop the pre-payments. Mehmood later backed legislation at the Board of Supervisors raising gates and ratifying gate overcharges. This did Yellow a tremendous service.

Why he did this? I can't say.

SFMTA Board Okays Meter Increase and 87 New Taxis

The threatened honkathon was a non-event yesterday.


Tariq Mehmood claimed that he called off his taxi strike to give the SFMTA to make changes he liked. But, I think he was really reading the same tea leaves I was. I had lunch in the plaza across from City Hall at 12:30 P.M and, in the half hour I sat eating, only 3 cabs came by looking for a protest.


But on to the business that was.


1. The Meter Increase


The topic for a vote by the SFMTA Board was actually whether or not to increase the flag drop by 40 cents to $3.50. The MTA had already okayed a meter increase of 10 cents for every 1/5th of a mile and 10 cents per minute of waiting time.


The measure was a slam dunk. Not only did the board pass it with a unanimous voice vote but hardly anyone spoke against it. A few people expressed fears that the raise would lose business and others asked for cost of living reviews every couple of years but that was it.


The raise of both the meter and the drop will equal about a 24% increase in the cost of a fare.


2. The second vote was on whether not to put out 50 new Single Operator part-time medallion permits, 25 new medallions to drivers on the List, 2 temporary electric vehicles and to sell 10 new medallions to drivers on the list.


The measure passed 6 to 1, but the ideas of the MTA selling medallions and leasing the  Single Operator Permits proved controversial.


Mark Gruberg  and Barry Korengold both attacked the idea of the SFMTA setting a precedent by selling medallions saying that the organization had a conflict of interest. Possibly - but neither of these speakers addressed the fact that the 10 new medallion would be part of the 60 medallions that the Pilot Plan allows the MTA sell - more than 20 of which have already been sold.


 The 50 Single Operator Permits, on the other, took a lot of flak.

• Rebecca Lytle of the San Francisco Federal Credit Union and Desoto Cab owner Hansu Kim both experssed fears that allowing the MTA to lease taxis would undermine the value of taxicabs as well as lead to a future takeover of the taxicab business by the MTA.
• Desoto manager Athan Rebelos thought that the idea of the permits was not sound from a business standpoint. 
• Medallion holder Christopher Fulkerson expressed fears that the drivers of these vehicles would lose money.

The most entertaining objections, however, were put forth by John Lazar  of Luxor Cab and Jim Gillespie of Yellow Cab. 

First, they tried to delay the measure by claiming a legal technicality that the MTA's attorney noted but thought unimportant.

Then, the owners claimed that they hadn't had time to study the plan for Single Operators and said that the permits should not be put out without PC and N hearings. Gillespie also claimed that the subject hadn't been discussed at Town Hall or TAC meetings.

Tara Housman, John Han and I all pointed out that the measure had been debated at several Town Hall meetings in addition to being debated, voted on and passed by the Taxi Advisory Council, of which Gillespie is a member.

The idea of Lazar and Gillespie asking for PC and N hearing is comic. This dynamic duo has spent much of the last year knocking on back-doors trying to get 500 cabs put on the street WITHOUT PC and N hearings.

President Nolan of the MTA Board said that both PC and N hearing and cost of living meter increases should be done on a regular basis.

John Han (photo) was praised by members of the board for his efforts to make the Single Operator Permits a reality.

Will There Be A ...

A while back, Tariq Mehmood announced a 24 hours strike on August 2nd, but the winds of revolt may have died down. I don't keep up with Mehmood's decrees but, last I heard, the self-proclaimed "powerful and great leader" was thinking about pulling back to the usual ho-hum honkathon at City Hall.


If I'm reading the tea leaves correctly, I think other protest leaders have decided to either follow suit or not protest at all. And, indeed, why should they? The MTA has already compromised or agreed to compromise on most of the driver's concerns.


Plus, it doesn't made a lot of sense to protest on a day when San Francisco's cab drivers almost certainly will be given a 20% raise.


The raise is one of two taxi items on the agenda for the SFMTA Board meeting on Tuesday.


1. A Meter Increase 


of 10 cents for every 1/5th of a mile and 10 cents for every minute of waiting time, which was worked out by drivers at Town Hall meetings, has already been approved by the board.


In addition the board will discuss adding 40 cents to the flag drop thus raising the drop to $3.50.


That there is to be no discussion of a gate increase at this meeting is a good sign for the drivers. Hopefully, this means that the board has wisely decided that there should be no gate increase for the foreseeable future. If so, drivers will get a 20% raise even if credit card fees continue to be passed on by the companies.


2. The Issuance of New Medallions


The plan on the agenda calls for:

• 50 new single operator part-time taxi permits.
• 25 new full time permits given to drivers on the list.
• 10 new full time permits to be sold by the MTA.
• 2 full-time temporary electric vehicle permits.

The presence of this item is a good sign because it means that the back-door efforts of John Lazar of Luxor Cab and Jim Gillespie of Yellow Cab to kill the item (so that they could flood the city with taxis) failed.


Appointing Edward Reiskin to the position of  Director of Transportation, effective August 15, 2011, will also be on the agenda.


What can also be expected is an hysterical, full-bore, slanderous, misogynistic attack on Deputy Director of Taxi Services Christiane Hayashi by the  Mehmood. I'm sure that Tariq sees this as his last best chance to get rid of the nice lady that he's demonized. In this he'll be backed by a group of misinformed drivers who've never met and don't know Hayahsi, and a few of the more corrupt cab companies who want to continue cheating drivers out of their money.


It would be nice if taxi people who have worked with the Deputy Director and know what a fair, honest and brilliant administrator she has been would speak on her behalf. If you've done this before, please to do it again if you can. Show Director Reiskin the support she really has in the cab community. You owe it to yourselves.


The SFMTA Board meeting will be held at Room 400 City Hall at 1 P.M. Public comment usually takes place fairly soon after the meetings begin.

What Happened to the Good Old Days?

The taxicab industry has always been divided but not that long ago we all came together in a spirit of mutual respect and cooperation and saved the business with a plan that gave a little to everybody but not too much to anybody. 


Look at that picture. They're all there: representatives from all the major companies and driver's organizations and drivers themselves sitting or standing around the mediator of that peace, Deputy Director Christiane Hayashi.


That was only a year and a half ago. Hard to believe isn't it? Look what's happened since:


We've had a Taxi Advisory Council that, as one of their first acts, voted to give their own members and their kin medallions as key personnel, without having to follow the same rules as everyone else.


We've had Tariq Mehmood (sitting so politely in the second row) turn himself into a local fool by running around making asinine slanders against Hayashi at every city meeting he can find and to every public official who will agree to listen to him - as if lies could become truth through repetition.


And, of course we've had endless protests lately - including a few against agreements that many of the protesters themselves helped to formulate at Town Hall Meetings. And now they're threatening to strike even if they get what they want - despite the fact (as previously noted) that the protesters have no unified goal. And, if they do strike on August 2nd, it will be on a day when (in all probability) new medallions will be issued to the Waiting List and drivers will get a 22% raise.


Adding to this absurdity, we have Luxor, Yellow and Desoto Cabs going behind Hayashi's back to temporary Executive Director of the SFMTA Debra Johnson, trying to undercut a plan that was developed through Town Hall Meetings for the issuance of 50 Single Operator Permits and 35 medallions to the List (25 issued to the top of the list and 10 sold by the SFMTA). And, this is a plan that their own company representatives agreed to at a TAC meeting. 


They don't want no Single Operator Permits or 35 new medallions right now because issuing a these few medallions might relieve the pressure to flood the city with taxis later. They don't want no studies of whether new medallions are needed or not. They don't want no outside input. They want 500 taxis, they want them immediately and they don't want to give anyone else a chance to speak. Corporate oligarchy at its finest.


As if Ms. Johnson would be stupid enough to unleash another whirlwind of protest over 500 new medallions during her last few weeks as SFMTA chief,  just before she steps down to work for her successor, Ed Reiskin.


When Johnson didn't go along with their plan, the company reps went running off to peddle the same soap to Mayor Ed Lee with hopefully the same result. Why would Lee undermine Reiskin, his own favorite candidate for SFMTA director?


And all this when the country is on the brink of a politically induced recession.


I'm tempted to make  a call for unity - like the Beatles' song "Come Together Right Now." But, with all these clowns running around out there, I don't know if it's worth the gesture.


At least we in the taxicab business don't need to worry about being divided and conquered from the outside.  

TAC Advises Taxi Companies, "Pass No Mas!"

Monday afternoon 7/25/11, by a count of 8  to 7, the Taxi Advisory Council voted to advise the SFMTA Board to no longer allow taxicab companies to pass on credit card fees to their drivers. You read right. No more credit card charges for the drivers. Now - this is a reason for honking and dancing in the streets. Only I don't hear any horns. Maybe because nobody is sure what this means ... It's complicated.

But first the play by play.

The meeting started with Tariq Mehmood loudly launching one of his patented, semi-coherent, cretinous, psychopathic rants against "staff" and was allowed to do this by Chair Chris Sweis because Mehmood didn't mention his victim by name although we all knew who he was spewing out his hatred at.

Then Councilor John Lazar and his sidekick Charles Rathbone tried to have Councilor Barry Korengold dismissed from the Council for talking during a vote at the previous meeting to limit the right of the MTA to sell medallions. When this failed Lazar tied to get a re-vote only to be told that only the winning side could ask for one.

This drama was followed by about three hours of excruciating boredom as everyone recapped their positions on 5% credit card charges and back-seat terminals (PIM's). Not that I'm knocking boredom. It's part of the democratic process.

The theme of the meeting was set by Councilor John Han who seems to have read every document, note or e-mail ever written on the subject of credit card fees and back-seat terminals. Han's research has convinced him that, if the back-sear terminals were trashed and burned, the driver's fees could be lowered to 3% or 3.5%.

John Lazar, on the other hand, claimed that the companies were treading water at 5%. An idea seconded by Councilor Athan Rebelos and Desoto President Hansu Kim although Kim did admit to John Han that the rear-seat terminals might indeed add to the charges.

Barry Korengold said that he'd never met a driver who liked the PIM's. Councilor Tim Lapp of Yellow Cab countered him by saying he had been one of the drivers testing the terminals at Yellow and loved them. He said that he was making $12 to $15 more a shift using them and wasn't going to let anyone take the one in his cab away. Hansu Kim added that he had completed his study of the PIM's vs front seat terminals and that it showed that the PIM's earned drivers about 20% more.

Councilor and owner of Metro Cab, Richard Hybels said that his drivers were making a lot more money since he'd installed front-seat terminals in his taxis. Before that Metro didn't take credit cards. Hybels also said that he'd be forced out of business unless he could pass the charges on to the drivers.

Councilor Dan Hinds said that the companies should use whatever they earned from the PIM advertisements for the relief of driver's fees.

Councilor William Minikel thought that the credit card fees should be passed on to the customers - an idea that other people in the room liked.

Penultimately, a motion was made by John Han to end the requirement for rear-seat terminals in order to pass on credit card fees to drivers and limit the fees to 3.5%. A vote was taken and the motion failed by a count of 10 to 5.

Shortly afterwards Councilor David Kahn (photo) made his motion to stop allowing taxi companies to pass any credit card processing fees on to the drivers.

Yellow Cab driver Murai, who sat next to me, and I both thought that the measure was doomed to failure and half wondered why TAC was even bothering to vote. We foresaw another 10 to 5 defeat.

Then, Wham! The motion passed 8 to 7. I mean it was staggering. The idea had hardly even been discussed because it seemed so random.

Tara Housman, who voted for the measure, later told me that she didn't even know if she liked the idea. She said that the only reason she voted as she did was to make Kahn feel better about losing.

Nobody really knows what this means. TAC is an ADVISORY council and I'm sure that (even as I'm finishing this post at 9 am)  the MTA is fielding calls from desperate owners pleading, "say it isn't so."

If nothing else this vote should help the Taxi Services negotiate lower fees from the vendors.

A Change in TAC ... tics?

There were three new faces on the Taxi Advisory Council on Monday who are likely to mean a change in direction. Until now, the TAC has pretty much been an owner's council. But the addition of Rua Graffis, Tara Housman and Tone Lee seems certain to challenge that dynamic.


Ms Graffis (Left) is a leader of the United Taxicab Workers (UTW) and has spent over thirty years fighting for driver's rights. She replaces non-medallion holder not on the list, Timothy Ajaegbu, who regularly missed council meetings.





Mrs. Housman (Middle photo) is a medallion holder who also takes a driver's point of view. As she pointed out at the meeting, medallion holders can also be drivers. She replaces Laurie Graham who routinely gave Yellow Cab a second vote.

Tone Lee is a leader among the drivers at the airport. He replaces Dmitry Nazarov who was a lease driver at Luxor Cab and has bought his own medallion. Nazarov, who was supposed to be representing drivers on the list, voted with President John Lazar of Luxor Cab absolutely every time.


All three of the new councilors have regularly attended and spoken at TAC meetings so that they are already up to speed. 


When you add another recent addition, Richard Hybels (owner of Metro Cab who is well-known as a maverick that sometimes sides with drivers) to the mix, the council promises to be much more evenly balanced than it has been in the past.


Council Business


The council voted to have Chair Chris Sweis and Vice Chair Barry Korengold continue in their positions for another six months.


Driver's Fund


The main subject for discussion was, what to do with the drivers fund?


This was the first time that the council has seriously discussed the issue and it was primarily a brainstorming session. The councilors generally agreed that the sum of money (currently $1,462,500) was too small to pay for medical or retirement benefits. Some ideas put forward for the fund's use were:

• Scholarships for the children of drivers.
• Catastrophic insurance.
• Benefits for injured or traumatized drivers who needed time off from work.

Councilor Barry Korengold introduced a plan to use a 25 cent drop fee to build the fund more quickly but the drivers could not use their share unless they were vested for 5 years.

Christopher Fulkerson liked the idea in general but thought that the fund should be invested in an IRA that drivers could access whenever they wanted.


Tone Lee wanted to set up a lottery that would pay $100 to fifty drivers every two weeks on the provision that they showed up at TAC to collect it.

In the end, the council voted for a motion make by TAC member and general manager of Desoto Cab, Athan Rebelos, to make certain that the funds would be managed by the beneficiaries (i.e. the cab drivers) and not the MTA.

Thoughts on the Protest

If nothing else yesterday's protest was the biggest in my 27 years of cab driving, topping even the famous anti-Feinstein demonstration of 1984. It was truly awesome with honking taxis circling the block around City Hall for at least 4 hours.

• The 1984 rally took place just before the Democratic convention that year and probably cost Diane Feinstein the chance to be the first woman to run as a Vice Presidential candidate.
• Nonetheless Feinstein won the argument, put more cabs on the street (the issue of that day) and went on to become a very powerful U.S. Senator.

• Lesson - honking horns don't necessarily make policy.

The drivers made their point - they don't like electronic waybills and they don't want to pay credit card charges. In addition, there were about a dozen other things that the hundred or so drivers who spoke at the MTA Board meeting either liked or didn't like - including some of which (selling cabs at open auctions or putting an end to the sales program) contradicted each other. 

• Most of the drivers were, as advertised, the ones (mostly non-medallion holders) you never see at meetings.
• But there were also a fair number of medallion holders including friends from the SFCDA.

Misplaced aggression?

Many of the drivers complained about being forced to open bank accounts by companies like Yellow and Luxor; or being forced to give their social security numbers to open these accounts; or being hit by transaction charges; or being threatened if they tried to use Square or other Apps. If so, it should have been the companies that the drivers were protesting - not Taxi Services. To clarify:

• A driver does not have to use the back-seat terminal.
• He or she is entitled to use Square or any other App to process the credit card receipts.
• A driver should never pay more than 5% including all banking fees.
• If the drivers are being overcharged or threatened by a company they should contact Taxi Services.

At the Board Meeting I rhetorically asked, "If Green Cab can afford to pay their drivers credit card receipts why can't Yellow or Luxor Cab?"

• Actually my feeling are stronger than that.
• If Yellow and Luxor can't do anything without cheating their drivers, why should they get any break at all?
• To put it crudely: If they aren't satisfied with saving a $ million a year - screw 'em. They should continue picking up the tab.

Now for the most popular parts of my post.

I still think the back-seat terminals might work if installed properly and that they should be given a chance to prove or disprove their value.

• http://phantomcabdriverphites.blogspot.com/2011/04/tip-prompting-will-it-make-drivers-more.html
• http://phantomcabdriverphites.blogspot.com/2011/04/back-seat-terminals-demonstrated.html
• http://phantomcabdriverphites.blogspot.com/2011/04/back-seat-vs-front-seat-tipping.html

Higher Math or Cutting Off Your Nose to Spite Your Face.

• One driver said that the 5% cost him $4.00 on a $24.00 ride. "It cost me my tip," he said. Actually, dude, what you lost at 5% is $1.20.
• The suddenly omnipresent Dean Clark claimed that the 5% would cost him $300 a month.
• Have either one of these guys calculated how much NOT taking credit cards would cost them every month?
• I mean, two $10 rides a day should easily cover the 5% charge.

A suggestion.

Since you guys started complaining and refusing to take credit cards, I've been getting the best tips I've ever had in my life. I think of you as my living tip prompters.

When a customer gets in and nervously asks, "Do you take credit cards?" I smilingly say, "Of course I take credit cards - my customers always come first."

I repeat: the best tips I've ever had in my life. And, after the protests yesterday, they'll only get better.

Try a little showmanship. Smile through the pain.

Cabulous and Open Taxi Access: Overview

Cabulous is an App that allows direct communication between a cab driver and a cab user via an iPhone or a Droid. Taxi Magic, which works exclusively with Luxor Cab, and the infamous Ubercab offer similar services.

As such, they are in direct competition with each other: Cabulous and Taxi Magic, legally, and Uber, to the extent that it goes after taxi business, illegally.

 Open Taxi Access (OTA) is a system or a network that potentially can graphically represent all available taxis in San Francisco on a map of the city. This map would show the approximate locations of all the cabs.

Taxi Magic and Cabulous (but not Uber) could be linked in this network so that, although they would still be in competition, they would also compliment each other. If, say, a customer used Taxi Magic, he or she would be unable to also use Cabulous to hail a cab. The problem of customer contacting multiple taxi companies could disappear.

Thus the cab driver's nightmare of spending five minutes riding to an order only to see the customer driving away in another taxi would be greatly reduced by OTA.

In addition, the customer living at 36th and Santiago would no longer feel the need to contact multiple companies when he or she could look at the map of the city and simply choose the closest taxi.

Thus the customer's fears of never getting a taxi might gradually wither away.

Next: Cabulous and OTA in more detail.

On the Back-seat Terminals: Some Facts?

There is a lot to be said about the back-seat terminals (photo) currently being installed by National, Luxor and Yellow Cabs. Some of it might even be true. (See TaxiTownSF.)

But there are some misconceptions.  I don't claim to be an expert but I will try to clarify a few points.

1. It's not a TV, it's a video terminal and a card swipe.  According to Chris Hayashi, it will have no audio. It will, however, carry advertisements and public service messages. I don't know if it can be turned on and off by the customer.

2. The taxi companies WILL NOT pay for the terminals. The vendors will pay for all equipment and pay for their costs out of the fees collected and advertising revenue.

3. The cab companies WILL NOT share any advertising revenue with the drivers. The vendors will get 90% of the profits above the installation costs and 10% will go to the Drivers Fund.

4. The taxi companies ARE NOT currently allowed to be merchants for credit card accounts ( for obvious reasons), although some companies are requesting the SFMTA to be allowed to be merchant account holders themselves.  The actual cost of the merchant account is closer to 3%, so there is potential profit involved.

5. Despite it's prominence in the field, Verifone will probably not be the only vendor. Any company that meets certain standards set by the MTA could qualify. CMT and Wireless Edge are also planning to compete.

6. Although drivers are required by law to take credit cars, I notice that there is no regulation that says that a driver MUST use a specific credit card cashing system, especially since the drivers are not employees. Drivers are free cash them anywhere or any way they like.

• Many drivers - especially those at Desoto Cab already have their own merchant accounts.
• For drivers with smart phones Square - which is a free and charges 2.75% - is a good option.
• There are other companies on the market with similar or possibly lower rates such as Obopay which claims to charge only 1.5% per transaction and doesn't need a swipe.
• I understand that the Russian speaking lady near Checker Cab will still be happy to cash receipts for 10%.

7. Taxi companies have the option of not putting in the terminals in which case they are responsible for paying to cash the credit card receipts.

TAC 3-14-2011 Part 2

The rough draft of the TAC report on the Pilot Program was put together by Council Chair Chris Sweis (photo) after going through more than 12 hours of tapes. For this he deserves an award.

However, as councilor Carl Macmurdo and others pointed out, Sweis forgot to include Medallion Holders as one the four primary participants in the S.F. taxi industry. (A Freudian slip? Sweis wouldn't be the first owner of a taxicab company to wish that medallion holders would disappear. ) The Chair admitted that it was an oversight and promised to include a section on medallion holders in an amended draft at the next session.

As for the rest, I simply want to deal with a few points of the draft. You can read the full text in TaxiTownSf.

The discussions at TAC were mostly about the effects on Taxi Companies and Drivers on the waiting list.

1.The major effect on companies was the change from Gates and Gas to Affiliate Leases.

• In 2003 there were few cabs operated on as Affiliates.
• By 2010 more than half the taxis were affiliates.
• 56% of the medallions purchased during the pilot program have chosen to become affiliates.

Sweis and others see this as a negative.

• G and G operations, according to Sweis, "provide greater control over vehicles and drivers."
• Loss of G and G medallions "will reduce company revenues and quality control."
• Companies are losing taxis to Affiliates.
• Experienced drivers are losing good shifts when Affiliates replace them with less experienced drivers.
• Which "would lead to a decline of taxi service to the public."

Driver Tone Lee (photo) disputed this claiming that Affiliates and LTLs did a better job because the drivers worked harder and took better care of the cars that they, themselves, purchased.

Gratchia Markanian, the head of Checker Cab, made similar points and predicted that all taxis would someday be Affiliates.

Hansu Kim (photo), on the other hand, who has been strongly in favor of Affiliates, reversed his position and said that taxi companies needed gate and gas arrangement to be profitable. Coincidentally, Kim recently purchased Desoto Cab.

Councilor John Lazar of Luxor Cab said that the frozen gate rates had "killed gates and gas" arrangement. He also said, as he's said before, that new buyers couldn't afford to work under gate and gas because their loan payments were too high.

I have a few problems with these arguments - namely that neither one of them appears to be true.

• The payments on a 15 years loan are $1,798 per month. The lowest amount that a GG medallion holder is paid is $1,800 per month and the highest is $2,400 per month. In addition a medallion is worth $5,000 to $10,000 per year in better shifts etc. What can't they afford?
• If the cab companies are so strapped for cash, how come they are engaging in medallion bidding wars?

Companies are currently offering bonuses as high as $5,000 and medallion payments as high as $2,400 a month to wrest medallion away from each other. If they're so broke, where are they getting the money for their campaigns?

In the end, they passed a motion by 10 to 4 to have all cabs that are awarded to drivers on the list to be worked as Gates and Gas for the first three years.

Next: The effect on Drivers.

Credit Card Charges: Illegal

It is currently illegal for taxi companies to charge drivers for cashing credit card slips. Period. 

Illegal? So what?

The illegality of credit card charges means little to the hundreds of cab drivers who are forced to pay fees as high as 10% or 12% to get cash back for their receipts.

Taxi Services Enforcement and Legal Affairs Manager Jarvis Murray, in fact, is looking into complaints against various taxicab companies for charging their drivers fees to cash their receipts.

Jarvis said that it is an ongoing investigation so he couldn't give me the names. But he did say that Luxor Cab, Yellow Cab and Green Cab do not charge for cashing the slips.

In any case, the anonymity of the offending companies will end soon.

At the last TAC meeting Councilor John Lazar of Luxor Cab insisted that Director Christiane Hayashi provide the names of these companies to the council and she agreed to do so at the Monday 3-14-11 meeting.

As a preview, I've been told by drivers that Royal, Town Taxi and Checker have all been charging 10% for the service.

At Checker, drivers go to a shed on the property where a Russian speaking woman cashes the receipts. Royal drivers were being sent to the same shed but rumor has it that Royal isn't using her services anymore. Town Taxi has recently reduced it's charge from 10% to 5%. Regent Cab, the other hand, discourages it's drivers from taking credit cards - also a violation of the rules.

Since the fees from the credit card companies are usually 3% or less, the Taxi companies are making themselves a hefty profit from these exchanges - with the money, of course, being taken from working drivers.

Many drivers simply don't take credit cards for this reason, putting themselves at risk for citations and and annoying the public.
  
Tmw - The new backseat terminals and legal charges.

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.