Malcolm on Top

Might as well start with Jim Gillespie (photo, below). He walked up to me with a big smile as I headed across the square toward the MTA board meeting last Tuesday.

"Going to write something in your blog?" he asked with a smile.

"I just found out that Heinicke (photo left) appears to be be violating the Sunshine Ordinance. The meetings are a farce," I told Gillespie. "The proposals are decided in advance behind close doors."

"I thought that's the way it worked," Jim said.

If anybody would know about such things it would be Gillespie. He was seen making one of those back door visits with his pal John Lazar and the way he jauntily bounded up the steps to City Hall told me how the vote would go.

MTA Board did indeed choose to lease 150 to 200 medallions or permits to taxi companies. The permits are supposed to go to the best run companies but "word on the street" is that Yellow will get more than its share anyway.

Jim used the incompetence of his company during the meeting as a reason for the City to give him more cabs. He especially mentioned that a high percentage of the people who call Yellow hang up before the dispatcher answers or cancel before Yellow picks them up.              

What he didn't bother to tell the Board was that Yellow often deliberately fails to answer the phone and then holds the orders for 9 to 12 minutes before dispatching them.  That way the company can use their poor service to ask for more taxis. And, the City is going to do it. Another doublethink classic.

The board will lease the taxis to the companies despite the fact that a study being done by Hara and Associates will not be finished until January.

This caused some discussion and the only dissenting vote. Chairman of the Board, Tom Nolan (photo left) thought that they should wait until the study was completed. He also wanted to revisit the decision if Hara came to the conclusion that no cabs were necessary. But, as one driver said, that's like closing the barn door after the horses are out.

There was an extended discussion by the Board members but it was one of those experiences where reality trumps satire.

Not that there is necessarily anything wrong with ignorance. But, it does take humility to learn and the Board has adamantly refused to listen to anybody - the Taxi Advisory Council, the drivers at the Town Hall meetings, the drivers at the MTA Board meetings, Director of Taxi Services Chris Hayashi, Dan Hara - who could teach them what's what.

The tone was actually set a few Board meetings ago when Director Joel Ramos (photo right) fervently thanked Director Malcolm Heinicke for helping them understand the taxi business. I have nothing to add. This is the level at which the Board functions.

Ramos thought the fact that Uber, Sidecar and other illegal Apps started in San Francisco was a priori proof that there must be a shortage of cabs. It couldn't have anything to do with the fact that this city is one of the Tech start up capitals of the world and that the businesses are being set up in such a way that it's almost impossible for them to lose money. Not to mention that these Apps are invading cities like Washington D.C. and Chicago that are flooded with taxis.

"Word on the street" has it that Director of Transportation Ed Reiskin (along with the Mayor's office) is responsible for raising the payout to medallion holders back up to $200 thousand from the $150 thousand that Heinicke wanted them to suck on. Although Reiskin is clearly being pressured from above to "show them the money," he appears to be struggling to do as best he can by the drivers and the cab riding public.

The problem is that he clearly does not understand the most basic things about the cab business. Nor does he know the characters in it.

And, why should he? He has the entire MTA under his purview. How could he know the nuts and bolts of every division? Especially one as complex as taxicabs? That's what the Director of Taxi Services is supposed to be for. But, of course, the Board has her on the top of their list of people not to listen to. (Hmm. I've just ended two perfectly good sentences in a row with prepositions. Take that Sister Pauline!)

Director Reiskin thought it was refreshing to hear from people outside the cab industry during public comment - after the usual collection of professional shills (most of them paid by Luxor or Yellow) came up calling for as many 700 more cabs. My favorites were the hotel rep and the woman from the Chamber of Commerce. They always want more cabs no matter what the situation. They wanted more after 9/11.

The hotel guy said that they couldn't find cabs at the hotels. Of course not. With all the limos lined up to grease the doorman, where would a cab park? The Commerce lady, as always, cited the expanding population of San Francisco as a reason to put out the taxis.

 She's right of course. In 1950, the population of San Francisco was 775,357. By 2010, it was 805,235. At that rate, one additional medallion a year should do the trick.

When another speaker and myself told Reiskin that, even if they started the process tomorrow, the additional cabs still wouldn't be ready for the Blue Angels, he was disconcerted. He thought about it for few moments and decided that "we have to get them out as soon as possible." He seemed to be unaware of the fact that, if the taxis were needed at all, it wouldn't be until May. Yes - there are no tourists between October and the summer.

The ideal time to add taxis would be in April. That way they wouldn't lower the incomes of current drivers and they'd be ready for the boat races next summer. There was no need to rush. Reiskin had plenty of time to read Hara's study and still add cabs if needed. Anyone in the taxi business could have told him so - if he'd been willing to listen.

On the other hand, someone else is clearly pushing Reiskin's buttons. (See the title of this post.) The only real reason to put the permits out fast is to funnel funds into the income streams of a few cab companies and the SFMTA.

One thing the Board members did right ...

was finally come out in favor of an Uber like App for taxicabs. Finally?

I wrote my first post on Cabulous and Open Taxi Access(OTA)  on January 28, 2011. The idea has been presented to the MTA Board on numerous occasions. The Taxi Advisory Council voted in favor of it. Cab drivers almost universally support it. Chairman Tom Nolan even said that the Board should look into the idea.

Cabulous started at approximately the same time as Uber in 2010. If OTA had been supported by the Board when it first came to their attention, everyone might be talking about how Uber is like Cabulous and not the other way around.

About the only people against it were the managers of Yellow and Luxor Cabs.

So what happened?

"Word on the street (dude sees all, hears all, knows all)" is that OTA died when President and General Manager of Luxor cab, John Lazar (photo), told former Executive MTA Director Nat Ford to kill it.

On the other hand, funds have recently been allocated to Taxi Services for electronic dispatch (The new name for OTA). Hopefully the Board will follow through this time.

Why $1,900 a month?

Of course this figure was not vetted (What is these days?) but the going price for medallions leased to taxi companies is currently $2,500. Yet here is the SFMTA selling permits on the cheap. To say the least, this runs contrary to their normal behavior. It also gives credence to the "word on the street" that John Lazar and Jim Gillespie worked out a back door deal after threatening to sue the SFMTA. At $1,900 a month Yellow and Luxor will make out like bandits - which isn't too far from their normal behavior.

Yellow takes in between $8,000 to $12,000 per day by encouraging its drivers to "voluntarily" tip. And, of course, John Lazar was asking for $10 per day plus $2 for the gasman at Luxor when I was there three years ago. At that time, he was also asking his cashiers to "voluntarily" tip him.  This meant that John's cashiers had to make $100 per shift in tips from drivers through Luxor's dispatching window (photo below) before they could make anything for themselves. This gives the word "voluntary" a whole new meaning.

What we have here, then, is the SFMTA getting together with two of the most dubious taxi companies in the business to divvy up money that had been headed to ease the old age of working cab drivers. This would appear to leave Director Malcolm Heinicke with a profound moral quandary:

Should the MTA take 15%, 33% or 50% from the companies' tipping jars? For the public good - as is, of course, understood.

The City vs the Cab Drivers 4: Heinicke's Schemes

Over the years Director Malcolm Heinick has presented us with a few variations on a major theme. The basic plot has always been to take money away from the cab drivers who do the work and give it to the City. This is usually to be accomplished by taking individually held medallions and turning them into special medallions or permits that are to be leased to drivers or companies by the city.

But, since the specifics change, I thought that it might be interesting to see the reception that these designs have been given by the people in the taxicab industry (the experts in the business) before looking at a version of the plan itself.

There was a Charter Amendment group studying taxis in 2007. I didn't attend but everyone I've talked to about it tells the same story.

Numerous industry people (drivers, medallion holders, managers) gave their ideas about how the taxi business should be reformed. Heinicke was then either assigned the task of writing up their ideas into a report or took it upon himself to do so. His report, however, included no thoughts or plans of anyone else - only his own. The other members of the group all repudiated the report.

It should be pointed out that in 2007 the economy was booming and San Francisco was flush. The city didn't need the money that Heinicke proposed to take away from the cab industry. Thus, for Heinicke, politics appears to precede economics. The principle of separating cab drivers from their coin - of turning the industry into an "income stream" for the SFMTA - appears primary for the Director even if there is no pressing reason for it.

Director Heinicke's ploy popped up again in 2009.

After Christiane Hayashi was demoted to Deputy Director, she was instructed to present this plan to the drivers by the MTA Board. We were told that we could "tweak" or "make "improvements" to the gambit but it was to be the future of the cab industry.

The new Deputy Director then proceeded to present Heinicke's stratagem at a couple of Town Hall meetings. She asked drivers, medallion holders, company owners and managers what they thought of the plan. Then she copied down the comments and brought them back to the Board to read.

The people at the Town Hall meetings universally expressed loathing for Heinicke's disregard of people working in the taxi industry.. Jane Bolig, who then was president of the board at Desoto Cab, quipped that, if the plan was implemented, the taxi industry would "look like Berlin after Wold War II."

Medallion holder Mike Spain thought that the plan looked like it was "drawn up by a grad student." Those were two of the nicer comments. 

The MTA Board finally "got it" and set up a new series of Town Hall meetings that culminated in the Pilot Plan - still the fairest and best conception of how to improve both the taxi business and taxi service that anyone has come up with - probably because people from all aspects of the cab industy helped create it.

I hate to have to spell out the moral of this story but some taxi people tend to be a tad slow on the uptake.

In 2009, it took all the people in the taxi industry acting together to stop Heinicke's nefarious ruse to turn the cab business into a feeder stream for the SFMTA.

Chris Hayashi on the Amnesty Program

The SFMTA send shock waves though the medallion holder community with a letter that said it would be, "YOUR ONLY NOTICE AND OPPORTUNITY TO PARTICIPATE IN THE SFMTA'S MEDALLION AMNESTY PROGRAM."

This gentle message appeared a third of the way down the letter but it was the first thing that I read. Only later did I lean that the "amnesty" was being offered to drivers who were "under the age of 70" as of 12-31-2010 and had not fully met the full-time driving requirement of 156 shifts or 800 hours each year.

Under this amnesty, a medallion holder who had not followed the rules would still have to turn his or her medallion back into the city but would not have a pay a fine of $24,000 a year or $30 for each hour that is "short of satisfying the requirement" ... if the medallion is returned by April 2, 2010.

This follows in the wake of medallions that were turned in by four former members of Royal Cab who were made infamous by Dan Noyes for allegedly never working a single shift: Lauretta Tacchini (a police captain's wife), muli-millionaires Jack and Sylvia Dudum, and Martha Barrakah (a paralegal).

The incident and the letter raised a some questions that I was able to put to Director Hayashi after Mayor Newson's hybrid sound-bite yesterday. I forgot my tape recorder (amateur!), so what follows is a summary of the conversation.

1. Taxi Services is going after the medallions (which no previous director has done) in order to make the Pilot Program work. The permits are needed to move The List and give the SFMTA medallions to sell.
2. Although she would not tell me how many medallions the SFMTA is going after, Hayashi said, "30 revocations are already in the works and 30 more are on the front burner."
3. Director Hayashi is mainly going after "egregious offenders."
4. If the medallions are not turned in by April 2nd, Taxi Services will revoke the permits and hit the violators with the above fines.
5. Although the Dudums, Tacchini and Barrakah have turned in their medallions, the SFMTA still wants it's money, which could be as much as $240,000 each. A hearing is set on the matter for early April.
6. Minor violations (like being a little short of 800 hours) will be dealt with by fines, not revocation.
7. Hayashi wants to emphasize that although the companies must also keep records, the main responsibility for proving that they have met the driving requirement belongs to the drivers.

Jarvis Murray, Enforcement and Legal Affairs Manager for Taxi Services, added that his "main emphasis is to clean up this situation once and for all" so that by next year "we won't have the perpetual problem of medallion holders who don't follow the rules."

Hayashi finished by saying that the "goal and mission" of her department is to make San Francisco a place where people from all over the world praise the quality of the taxicab service. "That starts, " she said, "with having general compliance with enforceable laws."

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.