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.

Cab Company Scams: Numero Uno - “Tipping”

It doesn’t take long for a new cab driver to realize the truth or falsity of certain sayings. Power obviously does corrupt. W. C. Fields, on the other hand, was wrong when he said, “You can’t cheat an honest man.” You can cheat anybody who’s hungry for a job.

In fact, a student who wanted to know why labor laws and unions exist could do worse than spend a month or two driving a taxi in San Francisco. It’s like a third world country that’s been corrupt for so long that nobody even remembers what corruption means. It’s just business as usual. The way things have always been and always will be.

The Independent Contract has given cab companies almost absolute power over their drivers and  business as usual means running a variety of petty scams designed to separate the drivers from their money. Underhanded practices are so widespread in this industry that I’m not going to name names (although I can if you like) from fear of failing to mention a deserving party.

Despite the fact that “tipping” is now officially illegal, it remains the number one scam. “Enforced tipping” is practiced by the majority of taxi companies in San Francisco  and  takes a minimum of $10 million to $15 million a year away from the drivers.

The official, legal average gate fee - set by the city - is $104 per shift. The standard rule of thumb for “tipping” is “$5 in and $5 out with $2 for the gas man.” At least that’s what I was told I should “tip” by two managers at two different companies. I’ve been told by drivers that some companies require up to $20 per shift. This makes the actual gate somewhere around $115 to $130 per shift.

When you consider that the average shift brings in about $120, drivers give 10% or more of their incomes to the companies - just like the 10% we catholics used to give to the Church when I was a child.

As far as I personally know, the only taxi companies that tell their drivers that they don’t have to tip are Green Cab and Richard Hybel’s Metro Cab. There may be more.

A management type recently took umbrage with me (If you’ve always wondered what “umbrage” is, I can now tell you that it’s when a guy turns blue in the face and screams at you.) for “slandering" his company by claiming that they practiced “enforced tipping.” This was especially interesting to me because I don't think I've ever mentioned his company in my blog.

But, he had a point. Drivers aren’t literally “forced” to tip. They aren’t whipped or beaten. Nobody gets thrown off a roof. On the other hand, when I stopped tipping at one company, I found myself sitting around waiting a couple of hours a shift for a taxi I could drive only to be given cabs that broke down when I did go to work - including several with bad brakes and one with no brakes at all.

Numerous drivers have written me about similar experiences. If driver doesn’t tip he or she will wait hours to go to work or not be allowed work at all, won’t get good radio orders, will be given bad (sometimes dangerous) cars, will never get a good shift and will be the first person to loose a lease when a company looses a shift.

So “enforced” is indeed the wrong word. But, so is “tip” which, by definition, is “a gratuity that is voluntarily given.” A more accurate phrase would be a “coerced fee.”

This practice is so deeply ingrained in taxi subculture that the mere public mention of it can get  a person in trouble. Despite the fact that I’m a medallion holder and can’t really be messed with, I was treated with extreme hostility by certain cashiers and dispatchers at a former company for simply writing a few posts about my experiences with tipping.

There’s good reason for such animosity. Cashiers and dispatchers (I’ll call them all dispatchers from now on because at some companies their duties overlap and cashiers usually dispatch taxis if they don’t dispatch orders.) are paid minimum wage by the cab companies - if they are paid at all. Some of them work off the books. A few years ago at one company, the dispatchers reportedly were paid minimum wage but they also had to pay the manager a “gate fee” to work their shifts.

The smallest amount that a dispatcher has ever told me that he made was $200 per shift. The most was from between $500 to $700 a shift. I’ve also been given figures of between $400 to $500 a shift. I think it would be safe to set the average at somewhere between $300 to $500 - net. Yes, that works out to $100,000 per year.

Once again, let me remind you that working cab drivers averages $120 per shift take home pay or around $25,000 a year.

Which brings up the question of whether or not managers themselves dip into the “tip jar”? Is it reasonable to think that the kind of people who set this system up would choose not to profit by it? I mean, there is around $30,000 per day in cash going through those dispatching windows. No, management wouldn’t think of touching it.

There is considerable anecdotal evidence (conversations with people who have worked in the dispatching rooms, etc) to the contrary. At least some management types take their cut. According to one story, the owner of a cab company once started a shuttle service from his share of the tips.

I think that many medallion holders support the system partly because they think they wouldn't make as much money if dispatchers were paid a decent salary and partly because they think that they paid their dues by tipping before they had their medallions and that newer drivers should do the same. It's a way for the medallion holders to get back what they paid out.

But the amount of money taken in by "tipping" is far in excess of the standard salary for dispatchers in similar industries and I won't live long enough to collect the $40,000 to $50,000 that I was coerced into paying. If I'd invested that money, I wouldn't need a medallion

This is  a  corrupt system that has existed for over 30 years. That’s way beyond enough. If the taxi business is going to be reformed, let’s do it all the way.

Dispatchers, cashiers, gasmen and order takers all do valuable jobs and they should be well paid. But, they should be paid by the companies - not by drivers who are barely making minimum wage to start with.