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      Embarking on

       Taxi Reform

01 | 19 | 2010 | SAN FRANCISCO, CALIFORNIA

 

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Outreach to San Francisco Taxi Industry

Since March 2009, staff conducted over 175 hours

of Taxi Town Hall Meetings in the One South Van

Ness Atrium, with variable (eight to 35 people) but

consistent attendance by company owners,

medallion holders and a few drivers on and off the

Waiting List.

Since December, 20 hours of site visits were made

to 10 different company locations to talk to drivers

during the morning and evening shift changes for

two to four hours per session.

 

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Goals Identified during Outreach

Public service and public safety

Driver quality of life

City revenue

Business stability

Entry Strategy: Develop career advancement

opportunities for drivers to keep them in the industry,

such as the opportunity to acquire a medallion.

Exit strategy: Provide retirement for medallion holders

and non-medallion holders who make their careers as

San Francisco taxi drivers.

 

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Taxi Reform Proposal

Hybrid: Incorporates elements of both seniority and

transferability.

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Transitional: Addresses legacy populations on Waiting

List and among elderly medallion holders.

Experimental: Provides a short-term, one-time

contained program from which we can collect

information and learn from experience.

 

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Why a Short-term, Contained Reform Program?

• Provides opportunity to transition out of the industry those

legacy populations that have built up under Prop K:

– Senior career drivers and those who have spent many years

on the medallion Waiting List.

• Provides opportunity to test assumptions and to identify

unintended consequences:

– If medallions are transferable, should the price be market

based or fixed? If fixed, how should price be determined?

– Can the seniority-based Waiting List be made to work better

than it does now?

– What is the effect of this change on the taxi companies’

business models?

• Medallions rented as long- term-lease vs. gas and gates

• Drivers as employees vs. independent contractors

• It would be a short-term, one-time program that will not preclude

any options for future policy decisions.

 

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Learning from the Experience

Appoint industry advisory group to monitor

the process and develop recommendations

for longer term solution.

Set a deadline of December 31, 2010 for

this group to develop recommendations for

the SFMTA Board of Directors.

 

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The Offer to Qualifying Medallion Holders

In this first phase, the offer would be limited

to Pre-K and Post-K medallions held by

individuals who are 70 years or older. Those

individuals would be given two choices:

– Sell the medallion to the next person on the

Waiting List who elects to buy one, at a fixed

price that the SFMTA would establish

– Continue holding the medallion subject to all

of the existing regulations, including full-time

driving

 

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Proposal for Medallion Sales

Limited to Pre-K and Post-K medallions held by

individuals who are 70 years or older.

Purchased medallions would continue to be subject

to the full-time driving requirement and other

regulations.

Sales would be subject to a transfer fee that would be

split between the City (15 percent) and a Driver Fund

(five percent). Uses of Driver Fund would be

determined in consultation with the taxi industry and

established by regulation.

 

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Who Could Sell a Medallion?

The SFMTA would sell some medallions directly

to buyers to realize FY2009-2010 revenue.

For each direct sale by the SFMTA, the SFMTA

would issue one to the Waiting List so that

medallion sales do not slow down the List.

All Pre-K and Post-K medallion holders who meet

the age qualification would be eligible to sell their

medallions.

Any medallion holder with a permanent disability

that prevents their meeting the Full-Time Driving

requirements would be eligible to sell the

medallion.

 

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Who Could Acquire a Medallion and How?

By purchase: Provide right of first refusal to

those on the Waiting List in order of seniority.

Staff is in the process of identifying potential

lenders and available loan terms.

By waiting: Applicants remain on the Waiting

List just as is done today.

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Ramp Medallions

Ramp medallions should not be part of an

experimental program.

Eligible Ramp medallions should be switched for

Sedan medallions if owner chooses to sell.

 

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Proposal for the Waiting List/Seniority System

The Waiting List would be maintained exactly as it is

now, and applicants would continue to receive

medallions through the Prop K system.

The SFMTA would act aggressively to reduce the

Waiting List through distribution of medallions and by

administratively cleaning up the List.

If a seniority system is maintained in the long term, it

should be based on A-Card seniority, not a Waiting List.

The Waiting List was closed to new applicants in

December pending further policy guidance from the

Board.

 

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How Can We Get the List Moving?

Mailing: Regulations allow at least two mailings 30 days apart. If there is

no response the applicant’s name comes off the list. If the applicant re-

appears within six months he/she can get back on the List if he/she

otherwise meets the qualifications.

Remove unqualified people from the list: People under 21 who do not

have A-Cards, etc.

Right of first refusal to purchase a medallion: Some people will

choose to buy a medallion and get off the Waiting List.

Increase the pace of issuance of medallions: Extend to people on the

Waiting List from those returned to the SFMTA.

Enforcement: Revoke Post-K medallion holders who are not driving.

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Driver Fund

Potential Driver Fund Funding Sources:

–Share of medallion transfer fee

–Meter add-on

–Branding/merchandising (SFtaxi T-shirts, caps, cups, etc.)

–Permit fee surcharge on drivers during first years of service to

subsidize those who remain in industry many years

–Contributions from medallion holder income

–Advertising revenues

Potential Uses of Driver Fund Established by Regulation:

–Should be primarily focused on drivers who do not have

medallions.

–Industry would be consulted through outreach

 

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Revenue Projections

Potential Transfer Fee Revenue @ 15%:

• At $250,000 price = $37,500 per medallion

= $3.75 million for each 100 medallions sold

Potential Direct Sale Revenue for 60 Medallions:

• At $250,000 each = $15 million

 

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Next Steps

•Continue public outreach to develop “taxi culture” in

SF.

•Explore integrated (overlaid) dispatch.

•Address peak time service issues through public

convenience and necessity study and exploration of

peak time service options (e.g., use of spare vehicles

as peak time cabs, single operator permits, etc.)

 

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Glossary

Full-time Driving Requirement: The permit condition attached to a taxi

medallion that requires the owner to drive at least 800 hours, or 156 shifts of at

least four hours per calendar year in order to keep the medallion.

Integrated Dispatch: Instead of replacing existing company dispatch systems

with a single dispatch for all taxi companies, overlaying the existing system

with a technological solution such as mobile phone applications that would

connect customers directly to available drivers who are nearby.

Peak Time: The times when the demand for taxi service far exceeds the

supply of taxis, especially Friday and Saturday nights.

Post-K Medallion: A medallion issued after Prop K was passed by the voters

and which has a “Full-time Driving” requirement as a permit condition.

Pre-K Medallion: A medallion that was acquired before Proposition K was

passed by the voters and which does not have the Full-time Driving

requirement as a permit condition.

Proposition K: The ballot initiative passed by the voters in June 1978 that

declared taxi medallions to be City property that could not be transferred,

prohibited medallion ownership by corporations, limited medallions to one per

person and limited the issuance of taxi medallions to working San Francisco

taxi drivers.

Ramp Taxi: A wheelchair accessible taxi vehicle that is part of the SFMTA’s

federally mandated Paratransit Program.