En Farce: Part One

Acting, as usual, more like a spokesperson for Uber, Lyft & Sidecar than a director of Policy and Planning for the CPUC, Marzia Zafar, who was supposed to be a neutral moderator, came to the defence of the TNC conglomerates when a spokesman for the taxi & limo businesses pointed out that the TNCs did not do Department of Justice (DOJ) background checks using fingerprints.

Ms. Zafar (photo left) argued that the venture capitalized transportation corporations (VCTCs) did do background checks but did them online. She spoke as if she had scored the final point (online background checks = the DOJ's background checks) for their side and that the subject was closed.

This was – at the same time – one of the most typical and most bizarre moments of the CPUC hearings on so-called "ridesharing" that started in March of 2013.

City Slapps Taxi Company Owner

In March 2012, Gratchia Makarian, owner of Speck Cab Co. d.b.a Arrow/Checker Cab, sued the City of San Francisco, the San Francisco Municipal Transportation Agency (SFMTA) and Deputy Director of Taxi Services, Christiane Hayashi (photo). Using a spaghetti against a wall approach, Mr. Makarian alleged more than a dozen different violations ranging from denying Speck representation on the Taxi Advisory Council to engaging in “unlawful inspections” and investigations because of ethnic prejudice against Makarian. 

On June 19, 2012, the Superior Court of the State of California ruled in favor of the defendants. Specifically, the Court concluded that the Speck complaint was a “SLAPP Lawsuit.” 

For those of us who aren’t lawyers an explanation seems in order.  “SLAPP” is an acronym for “Strategic Lawsuit Against Public Participation” which is a lawsuit that is intended to censor, intimidate or silence critics so that they abandon their criticism or opposition. In other words, the Court found that Makarian had filed the complaint in order to stop Hayashi from investigating him.

If the person being sued convinces the court that the lawsuit is intended to intimidate, the “SLAPP” law requires that the lawsuit be dismissed and that the person who filed the lawsuit pay the legal costs of the defense.

In this case, Judge James J. McBride of the Superior Court wrote in his ruling,


“The Court denies the Anti-SLAPP motion as moot because plaintiffs dismissed the action. The Court concludes that the complaint is a SLAPP and awards $5,637.50 in fees to defendant City and County of San Francisco.”

Endemic Corruption.

Industry insiders broke out laughing when I first told them about the suit. Why?

How shall I put it so that I don’t get sued myself? To say that corruption is widespread in the taxicab business is like saying that my Irish relatives occasionally drink. Taxi companies make tens of millions of dollars a year from, among other things, forcing drivers to tip and pay illegally high leasing fees. There are three San Francisco cab companies - Green, Metro and Desoto - that DO NOT engage in such practices. No one in my presence has ever alleged that Gratchia Makarian has any connection with those three companies.

Who is defaming who?

In the complaint Makarian alleged that Hayashi and other members of the SFMTA had “defamed and discriminated against Speck because of Makarian’s national origin” and “perpetuated rumors that the Speck owners are part of Russian organized crime.”

In an interview with The Bay Citizen Makarian said ,“It is an extremely stupid allegation because I am Armenian ... “I have never been involved in any crime related to organized crime. I have a clean record.”

I found Makarian's allegations and statements interesting for a couple reasons: 

First, Ms. Hayashi is among the least likely people I've met to discriminate along racial or ethnic lines. 


Hayashi is currently taking time off to work as a volunteer interpreting for master Cuban percussionist, Lazaro Pedroso (photo left). She tells me she has been using her spare time to translate books he has written because, she says, "he deserves to be recognized in the English speaking world for his work in preserving Afro-Cuban religion and culture."


She has also worked as a volunteer with indigenous Mayan peoples in Mexico and speaks Japanese after living in Japan for several years and majoring in Japanese.

Second, rumors of Mr. Makarian’s supposed mafia ties are rife in the taxi industry, although I’ve never actually heard anyone say that he was a gangster. One person who gave me some details about Makarian's business practices did not want to go on record because  "Gratchia might belong to the mafia.” Other people have asked me, “Do you think Gratchia belongs to the Russian Mafia?” 

I put the same question to Hayashi a couple of months BEFORE Makarian filed his suit against her. The Deputy Director  told me that there was a difference between Russians and Russian speakers. She said that “Makarian was an Armenian who spoke Russian.” She concluded by adding, “just because somebody speaks Russian does not make them a member of the Russian Mafia.”

Let me repeat - this was months before Mr. Makarian accused Hayashi of claiming that he belonged to “Russian organized crime.”


Running a bluff.

Zusha Elinson in The Bay Citizen wrote that Makarian fancies himself a poker player who views the cab industry like a game.

“You have to read people and you have to know how people are coming at you,” he told Elinson.

Playing on this theme, an informant, who of course wishes to remain anonymous, suggested that Gratchia Makarian himself might have started the gangster rumors. Why not? Making cab drivers sign "independent contracts" leaves taxi company owners unfettered by labor laws or unions. They have the power to fire a driver without notice for any reason or no reason at all. Half of them strut around like Mafioso. Pretending to be a real thug would give Makarian an edge up in his game.

It might also have helped him to read the law more carefully so that he knew what game he was actually playing with Hayashi.

When the City Attorneys led by Leila K. Morgan filed an Anti-SLAPP motion, Makarian folded his hand and pulled back the complaint.

However, unlike most American laws, the Anti-SLAPP statute assumes that, if the plaintiff withdraws the complaint after the defense alleges that the only purpose of the action was to intimidate the defendant, the lawsuit was not legitimate. Not to answer an anti-SLAPP motion is an admission of guilt and the plaintiff must pay for the defendant's legal costs.

Makarian’s bluff did shackle the SFMTA’s investigators for a few months. But, in the end, it gave the agency legal and moral sanction to continue its fight against taxi company corruption; not to mention the $5,637.50 Makarian has to pay for the his losing hand.

Players & Plans: Carl Macmurdo & the Matt Gonzales Committee

When I saw MHA President Carl Macmurdo at the Board of Supervisor's meeting last week he said that he and his group hadn't come up with a plan yet. For a moment I thought that he might want to pick the brains of the members but it turned out that he won't meet with the general membership until October.

Carl appears to be a true believer in experts and their expertise (forgetting that it was just such people that sank the economy) so he and few board members intend to work up a plan with Matt Gonzales and Hansu Kim. I can't see how this could be too much different than the plan Macmurdo worked out with the same Gonzales Committee four years ago. Therefore I'm going to morph Carl's March 2008 proposal with that of the Gonzales Committe and take peek at some highlights. What the MHA would like to see would be:

• An end to Proposition K
• Transferability of medallions though a sealed bit auction system.
• A "grandfathering" of medallions to the top 150 to 300 people on the list.
• The auctions would only be open to working drivers but there would be no preference given to years of service and the list would be abolished. There would be only one owner per medallion.
• A driving requirement would be kept in force for the new owners subject to allowances for short term disability and other emergency needs
• A fee of around 20% would be changed to transfer the Proposition K medallions. A fee of 5% to 10% would be changed to re-sell them.
• Convenience and necessity hearing would be required before the City could issue new medallions but, if the need arose for new permits, the City would keep 100% of the money.
• 50% of the money earned by the City from auctions would toward promoting the health and welfare of all drivers

Since I belong to the MHA, I would like to like this plan but there are several things that I disagree with:

• Solving the problem of fairness to List drivers by "grandfathering" medallions. Taxis should not be put on the street unless they are needed.
• Convenience and necessity hearing aside, the plan seems to encourage the City to sell medallions as a source of revenue. Such hearing would have to have much stricter standards than they do now.
• I don't see why a driving requirement should continue once the medallions are sold. The cost of such mickey-mouse record keeping is considerable not to mention annoying and pointless.
• Any auction system will necessarily favor drivers able to raise money over drivers with skill and will easily open itself up to corruption - as it does in other cities like New York.
• "Grandfathered" or not, many drivers who had committed themselves to driving because of Proposition K would be screwed.

On the other hand, transferability fees may be only realistic way to raise enough money to pay for driver's medical and retirement benefits.

I think what I dislike the most is the logic behind this plan as well as the behavior that has resulted from this logic: like the MHA's protesting of neither the $15 million MTA fee nor the plan for the City to arbitrarily put 100 cabs on the street.

Actually I don't like the logic and reasoning behind most of the plans submitted to Ms Hayashi. Many of the justifications are exaggerated, distorted or false. I'll be dealing with them in a future post.