Rule favoring some S. F. cabs OK, court says
San Francisco’s attempt to help cabdrivers who paid $ 250,000 for city permits by giving them preferences for passengers at San Francisco International Airport may not have been successful but it doesn’t appear to be illegal, says a federal appeals court.
The city formerly issued the permits, known as medallions, without charge once drivers had cleared a waiting list, but imposed fees of about $ 1,000 a year before 2010, when officials started charging new applicants $ 250,000 for lifetime medallions allowing them to drive cabs in San Francisco.
Soon afterward, the emergence of lowerpriced competition from ridehailing companies Uber and Lyft sent taxi revenues tumbling, and
“The airport policy is not going to save the taxi industry nor the group of medallion buyers who are struggling to make their payments.”
Marcelo Fonseca, who started driving a Yellow Cab 32 years ago
many cabdrivers were unable to make loan payments on their medallions and their loans were foreclosed upon. No medallions have been purchased since April 2016.
In 2018 the Municipal Transportation Agency passed rules giving the $ 250,000 medallion holders first priority in picking up passengers at San Francisco International Airport, outside the city limits. Drivers who received their medallions between 1978 and 2010 were given a lower priority, and those before 1978, when voters approved new taxi regulations, were barred from airport pickups.
The SFMTA said the rules would reduce traffic congestion at the airport, where cabs often lined up looking for lucrative fares, and would ease the hardships for purchasers of the expensive medallions. But groups of pre2010 drivers and companies that called themselves the San Francisco Taxi Coalition argued in a lawsuit that the agency had no legal basis for favoring later permitholders and was effectively committing age discrimination against hundreds of older drivers.
A federal judge dismissed the suit last year and was upheld Monday by the Ninth U. S. Circuit Court of Appeals in San Francisco.
“The rules are rationally related to the legitimate government interests of aiding beleaguered taxi drivers and easing taxi congestion at the airport,” Judge Kenneth Lee said in the 30 ruling.
“That the city would try to mitigate the fallout for those most affected by a shift in the market is a permissible state purpose, even if some may question its policy wisdom,” Lee said.
He also said the California law against age discrimination by the government applies only to statefunded projects, and there was no evidence that the medallion program receives state funding. But Lee said the plaintiffs could refile their suit if they found such evidence.
John Coté, spokesman for City Attorney Dennis Herrera, said the court agreed with the city that “the SFMTA’s regulations comply with the law.”
A lawyer for the Taxi Coalition did not respond to a request for comment. But a longtime cabdriver who supported the suit said the city’s policy was both unfair and ineffective.
“The airport policy is not going to save the taxi industry nor the group of medallion buyers who are struggling to make their payments,” said Marcelo Fonseca, 60, who started driving a Yellow Cab 32 years ago and acquired a medallion after more than 15 years on the waiting list.
San Francisco “sold medallions to balance MTA’s budget on the backs of hardworking cabdrivers,” Fonseca said. He blamed then Mayor Gavin Newsom, now California’s governor, and the late Mayor Ed Lee.
In a separate case, the San Francisco Federal Credit Union, which financed $ 125 million in loans to drivers purchasing medallions, has sued the SFMTA for damages, saying the agency let the taxi market collapse and reneged on promises to guarantee the value of the permits. That suit is pending in state court.