Can S.F.’s re­forms save trou­bled taxi in­dus­try?

Tran­sit of­fi­cials propos­ing rules to bring re­lief for cab­bies in free fall

San Francisco Chronicle Late Edition - - FRONT PAGE - By Holly Hon­derich

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.

Noah Berger / Spe­cial to The Chron­i­cle

Rhad Sali­nas waits for a fare out­side the Mar­riott Mar­quis on Mis­sion Street where cabs line up. Cab­bies of­ten wait for long pe­ri­ods, while ride-hail­ing driv­ers pick up cus­tomers.

Pho­tos by Noah Berger / Spe­cial to The Chron­i­cle

A taxi crosses Cal­i­for­nia Street in San Fran­cisco, where cab­drivers have lost much of their busi­ness to ride-hail­ing firms.

Cab­driver Yonatan Yikealo waits in line out­side the Mar­riott Mar­quis ho­tel. Taxi driv­ers’ busi­ness has plum­meted as ride­hail­ing com­pa­nies such as Uber and Lyft com­pete for pas­sen­gers.


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