Asian Law Caucus/United Taxicab Worker's Medallion Proposal

This is a co-sponsored proposal of the Asian Law Caucus and the United Taxicab Workers of San Francisco. The Asian Law Caucus is the nation’s oldest legal services organization serving low income Asian Pacific Islander communities. The United Taxicab Workers, affiliated with Communications Workers of America Local 9410, has organized and advocated on behalf of
drivers since the early 1980s.

Proposal Summary:

We propose a rental fee on the City’s 1500 taxi medallions that will generate badly-needed revenue to benefit the industry. This rental fee, which could generate millions each year, will help provide health insurance and retirement benefits for all drivers, and revenue for Taxi Detail enforcement, particularly illegal limousines.

Background:

Described as a sweatshop on wheels, the taxi industry is one of the lowest-paying, most dangerous and exploitative jobs in the country. In San Francisco, largely immigrant cab drivers typically make minimum wage or less, while they are denied basic employee rights to health benefits, overtime pay, sick leave, pensions, vacations, and the right to unionize. They are even liable for the cab rental (“the gate”) if they are too sick to work. Combined with long, odd hours, poor working conditions, and employer abuses, these make cab drivers an increasingly vulnerable and marginalized community.

Currently, several medallion plans are being floated, with most focusing on privatization as a shrewd, if desperate, means of patching the City’s budget. Given the above conditions, implementing these plans on the backs of immigrant taxi laborers is not only unethical, it is impractical, short-sighted, and an open invitation to corruption.

A medallion is a government-issued permit that confers the right to operate a taxi cab in the City. Currently, the City of San Francisco has issued 1,500 medallions. While there are approximately 7,000 licensed cab drivers in San Francisco, only 1,500 taxis may be on the road at any given time.

Medallions in San Francisco are currently non-transferable (they cannot be bought, sold, or inherited) and are issued to working drivers only. Drivers who have been issued medallions are called medallion holders. Most commonly, these medallion holders lease their medallions, or “permits,” to cab companies for a monthly fee. (The average lease is reasonably estimated at $2,000 per month.) In turn, the companies lease their taxis, with the medallions, to non-medallion holding drivers for the daily gate, currently capped at an average of $96.50 per 12-hour shift, with a $7.50 surcharge for vehicles that meet certain emissions standards.

Many non-medallion drivers pay the requisite fee to be put on the medallion waiting list, where they may wait as long as 20 years for a medallion. Once a driver receives a medallion, his/her life changes dramatically. (S)he effective doubles his/her income, while suddenly receiving perks such as choice of shifts and hours, breaks on gates and choice of car. The dream of holding a medallion inspires many taxi drivers to stay in the industry and maintain good driving records.

Recommendations:

City-owned taxi medallions are issued to cab drivers for the price of a modest application fee (currently $346). Medallion holders, in turn, lease the permits to cab companies by the month. Assuming an average lease fee of $2000 per month, some $36 million a year goes toward medallion lease fees (or equivalent profits for medallion holders who operate their own taxis). We propose taking a negotiated portion of this unearned income to provide job benefits and protections that all drivers lack and sorely need.

Benefits provided from this annual collection should include:

(1) Health Insurance – Health insurance is unaffordable for most cab drivers and their families. Even if they are able to pay, many drivers are uninsurable due to pre-existing conditions. The Taxi Commission has recommended the creation of a group health plan covering all drivers who do not have health insurance coverage. Money generated from this application fee can help pay for health insurance for all drivers.

(2) Retirement – All long-time drivers should be able to exit from the industry with dignity and a degree of economic security in their waning years. Medallion holders in particular will gain an ‘exit strategy’, allowing them to relinquish their medallions to other drivers, thus shortening the waiting time and allowing more drivers to enjoy the benefits of the system.

(3) Enforcement – a huge problem within the industry is illegal limo services. Illegal limos steal rides from licensed taxi drivers. They are unsafe for consumers, and they limit the livelihoods of those who are operating legally. Currently, the Taxi Detail, due to staff shortages, does not have ability to come down on illegal limo operations. A portion of the income generated from our plan should go to the Taxi Detail to allow them to focus more time and resources on illegal limo enforcement.

Benefits to the City of San Francisco

In addition to providing the above benefits for drivers, this plan will benefit for consumers. Taxi riders will have healthier, more satisfied drivers who are not driving under exploitative labor conditions. Drivers will be more likely to make taxi-driving a career, creating a more stable, dedicated, and experienced workforce that will provide better and safer service to the public.

1. Additionally, this plan will encourage medallion-holding drivers to actually driver their vehicles in compliance with current law. Since the medallion holders themselves will be driving the taxis, they will be more motivated to keep the taxis in safe, workable condition. This, in turn, will be a benefit to all riders.

2. Also, drivers will have an incentive to retire. This will mean that fewer aged drivers with poorer reflexes and eyesight will be on the road, and the medallion waiting list will shrink, bringing younger drivers into the medallion holder fold. This also is a safety benefit for riders.

3. Finally, giving the Taxi Detail the capacity to enforce illegal limousine activity will in turn improve taxi service in the City of San Francisco.