Can S.F.’s reforms save troubled taxi industry?
Transit officials proposing rules to bring relief for cabbies in free fall
The line of San Francisco cabdrivers — six, seven at a time — sat bumper-to-bumper, waiting.
Outside the Marriott Marquis on Mission Street on a sunny Friday morning, the taxis stood out against the frenetic city, surrounded by pedestrians, tourists and a stream of cars, many affixed with a sticker from Uber or Lyft.
After more than an hour, some gave up and left. Others sat idle, listening to the radio, playing movies on smartphones, occasionally getting out of their cars to stretch and chat with other drivers.
“It’s not right,” said a 64year-old veteran driver named Cameron. “I’ve been sitting here for half an hour, then I’ll drive to Fisherman’s Wharf with a passenger and make $10 to $12.”
The woes of taxi operators who face mounting pressure from ride-hailing services like Uber and Lyft have prompted San Francisco transportation officials to assemble a package of reforms that will come up for a vote next week and rep-
resent a bid to reverse, or at least slow, the industry’s free fall.
Between March 2012 and July 2014, following the emergence of the app-based companies, the average number of monthly trips per taxi plummeted from 1,424 to 504. According to the most recent estimates, services like Uber and Lyft make more than 170,000 vehicle trips daily within San Francisco, about 12 times the number of taxi trips.
“The world changed when Uber and Lyft launched in San Francisco,” said Kate Toran, director of taxis at the city Municipal Transportation Agency. “Over the past number of years, MTA has been working to level the playing field.”
But while the MTA touts the potential benefits, drivers remain angry. Before the ascent of Uber and Lyft, they said, they could make a steady income working eight to 10 hours a day, earning up to $400 in that time.
“We used to make money in a single shift. Now 10 hours isn’t even enough,” said Yonatan Yikealo, a driver since 2013. He said he now has to work 12 to 15 hours to reach his pre-Uber earnings. “I’m surviving,” he said. Driver Cameron, who declined to give his last name, said he used to live comfortably working seven to eight hours per shift. He pays $1,000 for a single room in the city, sharing a bathroom and kitchen with housemates.
“I have a hard time making ends meet,” Cameron said. “If things go the way things are going, I’m thinking of moving. I can’t take it.”
The proposed changes in San Francisco come as many U.S. cities grapple with desperation in the taxi industry. New York City has seen a series of suicides by drivers.
In San Francisco, taxi drivers charge that ride-hailing companies benefited from looser regulations that allowed them to flood city streets with personal cars driven by nonprofessionals. Taxis are regulated by cities. while Uber and Lyft are regulated at the state level by the California Public Utilities Commission.
The ride-hailing firms retort that taxis long enjoyed a monopoly in which tight caps on their numbers ensured high rates for the cab companies and the lucky few who owned the necessary permits, known as medallions, but hurt passengers who couldn’t find a cab.
The reforms, which will go before the MTA Board of Directors on Tuesday, seek to prop up the value of a medallion, which is typically shared among two to four drivers who use it at different times.
Drivers either buy a medallion or lease one from their employer. While pricing schemes vary, drivers frequently pay up to $120 a day, plus the cost of the vehicle and gas.
The recommended reforms favor those drivers who doled out the $250,000 needed to buy a medallion under a city program launched in 2010, Toran said.
“Purchased medallion holders invested the most in the industry,” she said, “and yet they make the least.”
The city is home to 24 taxi companies and eight dispatch services. There are 1,458 medallions and almost 5,000 active drivers. But only 17 percent of medallion holders earn $38,000 annually, according to MTA figures.
Since 2010, 158 medallions have gone into foreclosure. Once a secure investment, 236 medallions are now listed for sale, with little hope of finding a buyer. No medallions have been sold since April 2016.
Among the changes being proposed Tuesday are the following:
Medallions would be open for sale to those outside San Francisco; the requirement that “purchased medallion” holders drive at least 800 hours a year would be eliminated; and businesses would be allowed to buy up to 50 medallions.
The MTA would waive the 5 percent transfer fee for medallions for three years.
The city would limit which medallion holders could make lucrative pickups at San Francisco International Airport, which is often jammed with competing drivers.
The MTA would not renew medallions that were acquired before 2010 at a nominal price.
“There’s still demand for taxis in the city,” Toran said. “The MTA’s regulatory role is to make sure that the framework allows the industry to innovate and compete.”
Officials could not provide estimates on how much individual taxi drivers might benefit from the changes. Outside the Marriott, drivers said they feared things would only get worse.
“Nobody’s happy,” Yikealo said. “Not a single driver is happy.”
The proposed limits on pickups at SFO drew particular heat. Drivers said such airport rides represent one of the only ways they can compete with ride-hailing companies. “That’s how we’re surviving and paying our bills,” Yikealo said.
“The dark cloud is that the SFMTA doesn’t really want taxis,” said Flavia Rogers, 64. “The city just wants the money.”
The drivers’ criticism was echoed by Jonathan Oliver, the CEO of the San Francisco Federal Credit Union, which made loans to cabbies to buy the $250,000 medallions. He called the reforms “window dressing.” In March, the credit union sued the MTA, saying it let the taxi market collapse after the credit union backed $125 million worth of loans for more than 700 of the medallions.
Toran said the reforms were not a response to the civil action.
“This has been a long process,” she said.