FLYWHEEL TAXI SUES THE CPUC

Flywheel taxi filed a lawsuit in Federal Court last week against the California Public Utilities Commission (CPUC) for unfair business practices.

The main complaint is the "uneven manner" in which the CPUC is regulating "e-hail taxi companies (i.e. Uber, Lyft & Sidecar). "The CPUC," the complaint asserts, "in-behind-the-door negotiations allowed these services to obtain a state license that they have since used to circumvent all established municipal taxi rules"

"Flywheel Taxi’s suit seeks injunctive and declaratory relief against the CPUC for the CPUC’s assertion of jurisdiction over e-hail taxi companies, which has prevented municipal agencies from applying the same rules to e-hail taxi companies that are applied to traditional taxi companies, resulting in an unfair two-tier system of regulation that has created an unlevel playing field for on-demand transportation companies."

Hansu Kim (photo), President of Flywheel Taxi, said,

“Calling these new taxi services ‘ride-sharing’ is the height of irony. It’s a type of Orwellian doublespeak intended to make people feel good about them. I mean, who is against sharing? But there isn’t any sharing going on. These are venture capital backed commercial businesses trying to skirt regulatory requirements. This lawsuit is intended to make sure everyone gets to compete while playing by the same rules.”

In a telephone interview, Kim clarified this by saying, 

"Taxicabs are being treated unfairly in terms of rules that we have to follow compared to the e-hail taxi companies ... regulators either have to treat us equally under the law – where we all are regulated similarly – or, if they want to deregulate the industry, then they have to deregulate all of us." 

Flywheel is not suing for money but rather a change in laws.

"All we're asking for," Kim says, "is to be able to compete on an even playing field. ... If we have that I know we can succeed. ... I'm not afraid of technology or new services or competition – I'm all for it. This is about making sure that they have the same costs and provide the same insurance and standards of safety that we do. Even a company like ours that is incredibly innovative and progressive is not going to thrive in an environment where the competition is allowed to endanger the public with cut rate insurance, 3rd rate background checks, phantom vehicle maintenance and zero driver training."

Regulate all or regulate none," Kim concluded, "but don't regulate some."

For a list of regulatory differences between e-hail taxis and real taxicabs, and a copy of the suit – click below.

Chris Daly's Charter Amendment

The charter amendment that Supervisor Chris Daly (seen working the press in the photo) is putting on the ballot would reinstate Prop. K with a few changes:

• 1. The full time driving requirement would be 800 hours only. There would be no option of driving 156 shifts.
  
• 2. The amendment, however, would allow for the MTA to "modify the personal driving requirement for a medallion holder with an injury or medical condition that precludes full compliance ..."
• 3. It further states that "the Agency shall make provision for the welfare of medallion holders and all taxi drivers who satisfy the personal driving requirement of 800 hours per year, including health care, retirement and disability."

This measure of course would have several drawbacks.

1. It would end any kind of transferability.
2. Since the MTA has no money, any fees for the above "welfare" would fall on the backs of the medallion holders. Judging by Supervisor Chiu's plan (see Et Tu Chiu ) such fees could run as high as $10,000 a year.
3. The 800 hour requirement for this welfare (which was not in last week's version) appears to be ambiguous. How could a driver retire if he or she needs to work 800 hours to collect the benefits?
4. While the provision for "modifying" the driving requirement for disabled drivers is an improvement over the current situation, it's vague and doesn't appear to deal with people disabled because of age.
5. There is no provision for an exit strategy or mention of a way to "retire with dignity."
6. It also would short circuit the Town Hall Meetings and thus kill any attempts by the various sides of the taxi industry to mediate a rational and thorough reform plan that could appeal to and be backed by most of people in the business.

Supervisor Daly's putting this measure on the ballot appears to confirm rumors that he plans run for mayor. Win or lose, the proposition could help his liberal progressive resume as the candidate who wants to bring "welfare to the workers."

However, I think Supervisor Daly has badly misread the situation if he thinks he's going to have the "cabbies" at his back. Instead he's succeeded in unifying most of them against him.

• All medallion holders favoring transferability will be against Daly's amendment.
• Medallion holders favoring the preservation of K will be against the measure because of the "welfare" fees and the lack of a clear retirement plan or exit strategy. Barry Korengold is advising SFCDA members to work against it for these reasons.
• Many if not most of the people on list - including many drivers that the UTW claims to represent - will also be against it because the measure will devalue the worth of a medallion.
• Ordinary drivers who want to buy a medallion at auctions of course will also be against the measure.

In short, the cab driver vote would probably run 4 to 1 or 5 to 1 against the amendment.

Nobody really knows what effect the opinions of cab drivers have on their customers but, when it comes to the subject of taxicabs, my guess is that it is quite a lot. Companies pay thousands of dollars to advertise on the top of a cab.

I wonder if Supervisor Daly fully understands what the inside of a taxi is worth?

Why Do You Have to Wait for a Taxi? Part 1

The short, cheeky answer is: because it's a taxi not a private limo. A fact obvious yet profound and usually ignored by people who profess to study taxicab service.

• When Assistant Director Jordana Thigpen of the San Francisco Taxi commission reported the findings of a 2007 taxi study, she couldn't understand why cab drivers broke out laughing after she told them that a doorman of the St. Francis Hotel had complained that he sometimes had to wait for cabs.
• The reason that they laughed was because the St. Francis has a line of cabs sitting in front of it 95% of the time - and that's a low estimate. It's like somebody complaining about the weather because it's 75 instead of 74. In the real world, the only way to improve the service at that hotel would be to eliminate the doormen. I'm not talking anything untoward here but the preening they go though as they work the passengers for tips slows everything down.
• People also complain when they wait for cabs: during conventions, on Friday nights, when the opera breaks, when concerts get out, when the ball games are over, in out of the way places, when it rains, when the bars close.
• I'm going to tell you right now that this never going to change no matter what you do. You could flood the city with cabs and hire The Heroes to do the driving and people are still going to wait for taxis.
• Why? Because we're cab drivers not your private chauffeur. We can't anticipate when and from where you will call. We can't control traffic, weather or a dozen other things that affect service.

Am I saying that the cab service in San Francisco couldn't be better?

• Given the way cabs are allocated, the system by which cab drivers earn their money and the circumstances under which they work - yes, that is indeed what I'm saying.
  
• Whether medallions are sold or not would make no difference whatsoever - except that if you were to follow Newsom's plan and suddenly replace veteran drivers with newbies, the service in the neighborhoods would badly deteriorate.

More later.

A Micro History of S.F. Taxicabs with Definitions

In order to understand the issues involving the Mayor and San Francisco cab drivers, a few definitions and a little background are necessary. For starters, it's impossible to understand anything unless you know what a medallion is.

• Medallion = a license to own and operate a taxicab. I believe (correct me if I'm wrong) that all U.S. cities have some form of medallion system. In all cities, except San Francisco (once again, correct me if you can) these medallions are for sale, usually at auctions. In New York City they cost upwards of $500,000. They are currently not for sale in San Francisco because of:
• Proposition K = which was passed by San Francisco voters in 1978 and gave the city a unique system. The medallions are not for individual sale but are owned by the city and the rights to use them are sold to working drivers for a fee. There is a limit of one medallion holder (often called an owner) per taxi. He or she can use the medallion as long as he or she follows certain rules. When the holder retires or dies, the medallion reverts to the city and the rights to use it is sold to the the first driver on a waiting list. Over the years, the rules covering the holding of medallion have evolved. Currently: 

1. It takes an average of fifteens years to get to the top of The List.
   
2. A driver has to have worked a minimum of 800 hours per year for five of the last six years to qualify for a medallion.
3. Medallion holders have to work a minimum of 800 hours per year to keep their medallions.
4. If the holders cannot work because of disability or illness, the medallions are be taken away and given back to the city.
5. The San Francisco Medallion Holders Association has filed a lawsuit against the above rule on the basis that it violates the American Disabilities Act. A verdict is pending in the Ninth Circuit Court of Appeals.
6. Proposition K could not be changed except by San Francisco voters. Numerous attempts to eliminate Prop K were all overwhelmingly voted down. 
7. Then along came:

• Proposition A = which was passed by the voters in 2007 as a way to raise money for the reform of the Municipal Transportation Agency (MTA). The money was primarily to be used for the repair, rebuilding and improvement of the bus and rail system. The measure contained a one sentence rider that put taxicabs under the control of the MTA. The Mayor took this to mean that the voters had overturned Prop K.

Definitions 

• Independent Contractor = those who have signed an independent contract with companies rather than work for a salary. All the cab drivers in San Francisco are Independent Contractors. It is an accurate description of the condition of Medallion Holders. For ordinary drivers, however, the contract is pure fiction. About the only thing they are really independent of is the protection of most labor laws. Thanks to a Supreme Court reject named Robert Bork, independent contractors can't legally form a union.
• The List = the waiting list that cab drivers sign up for the right to own a medallion. The medallions are awarded on a first come first serve basis.
• Medallion Holders = guys who have bought the right to own and operate taxicabs. Often incorrectly called "owners."
• Medallion Holders Association (MHA) = what it sounds like. An organization devoted to the interests of the medallion holders.
• Metropolitan Transportation Agency (MTA, SFMTA) = The agency that controls San Francisco's buses, light rail, taxis and other vehicular sevices.
• Transferability = The right to transfer or sell a cab medallion to someone else.
• United Taxicab Workers (UTW) = what is sounds like. An organization devoted to the interests of non-owner cab drivers. It's an association, not a union.