Cabdrivers divided over major fund
Future grim, but they have $4.7 million from licenses
Back in 2010, when Uber was just rolling to a start and no one had heard of Lyft, the idea of selling San Francisco’s much-wanted licenses to operate cabs and creating a fund with some of the proceeds to benefit taxi drivers seemed like a good one.
Since then, however, the taxi industry has collapsed as ride-hailing services have flooded the streets of San Francisco offering cheaper rides. The licenses, known as taxi medallions, once sold for $250,000. Today they are nearly impossible to sell.
The Taxi Drivers Fund, meanwhile, grew to $4.7 million. But now, as taxi drivers struggle financially, no one can agree how the money should be disbursed.
The drivers are arguing among themselves and with the Municipal Transportation Agency,
which controls the fund. They can’t concur on whether the money should be divvied up among themselves, used to pay annual driver permit renewals, spent on a promotional campaign to get people to take taxis, or a combination of those uses.
Aside from trying to get government agencies to more strictly regulate the ride-hailing services, how to spend that money is a top issue in the industry.
“We’ve got a dying industry with $4.7 million the MTA can’t figure out what to do with,” said Ruach Graffis, a taxi medallion holder and board member of the San Francisco Taxi Workers Alliance, a drivers union.
The city has 1,800 medallion holders and nearly 4,000 more active drivers, and Graffis acknowledges that the fund won’t be a windfall for individual drivers. “It’s big enough for some of the little stuff but too small to make a difference on the big stuff,” he said.
The debate has mostly been civil, but it’s also been contentious and sometimes emotional, with drivers arguing over issues of fairness and what’s better for the future of the taxi business.
“With the taxi industry, we have a lot of very passionate stakeholders, a lot of very opinionated stakeholders,” said Kate Toran, MTA director of taxis and accessible services.
MTA officials plan to recommend that the agency’s Board of Directors vote to divvy up the money among all active drivers. The issue will probably go before the board in early summer, Toran said.
The idea for the fund emerged when the MTA shifted from a long-standing practice of giving medallions away to drivers who had been on a years-long waiting list to selling them for $250,000. The agency agreed to put 5 percent of each sale, or $12,500, into it. When medallion holders decided to sell, they too would contribute 5 percent of the price of the license.
The purpose was “to improve the quality of life of taxi drivers, particularly those who were not medallion holders,” Toran said. But the fund had few guidelines and loosely defined goals. In 2013, the drivers and MTA officials decided that health or at least dental benefits should be the focus. A solicitation for bids got only one response, Toran said, and that was rejected because it wasn’t offering what the MTA was seeking.
Mark Gruberg, a medallion holder, founder of Green Cab and board member for the Taxi Workers Alliance, said disability benefits and scholarships were also discussed. But with the taxi industry faltering, health insurance changing and too little money flowing into the fund, discussions languished.
Steeply declining ridership rekindled the debate late last year. The agency created an advisory panel of drivers, held meetings, and conducted email surveys on how the money should be spent.
The committee, and a larger taxi task force, narrowed the ideas to three: waiving drivers’ annual renewal fees for a year, funding a public relations and advertising campaign promoting taxis, and paying out the fund to drivers based on their seniority driving cabs in San Francisco.
Eventually, the committee and task force recommended spending $600,000 on renewing the drivers’ fees and $940,000 on the promotional campaign. That left $3.1 million, which could possibly be paid out to drivers.
But Toran said she and Ed Reiskin, the MTA transportation director, favor splitting the entire $4.7 million up and giving it to drivers. Depending on their longevity behind the wheel, drivers would receive one-time payouts of $586 to $1,155, according to an agency memo. If the MTA were to fund the fee waiver and advertising campaign and disburse the remaining money to drivers, they’d receive $387 to $762.
Some, including driver Tone Lee, have also voiced their support for the cash-in-hand option.
“The taxi driver fund should go to the drivers,” he said Tuesday.
Gruberg disagrees, calling it shortsighted. He understands the appeal of a payout but thinks it would benefit drivers more to create a social media and advertising campaign promoting the benefits of taxis: safety, professionalism, knowledge of the city.
“Some money in the pocket would be nice,” he said, “but it does nothing to solve the long-term problem.”