But more to my point is the treatment of drivers in regard to uncompensated labor they contribute. If you go to U-Haul, etc., the vehicle is brought to you, gassed up and functioning to legal standards. This is not so at cab companies. If there is a problem with the cab assigned to you it is incumbent upon you to waste your time to get things fixed. The cab companies use a very unreliable maintenance method of having the previous driver report problems. This system doesn’t work. If your cab breaks down the only compensation offered are hours added to your lease period rather than having those hours subtracted from the lease price. The time waiting for a tow truck, traveling to the yard, dealing with the paper work, etc., is on you.

A rental car attendant checks your gas indicator, marks it down, and you go to the counter to finish the transaction. When picking up the car you walk out to the staging area and get into your car. You also know that your car is ready, if you called in ahead of time. You do not need to sit and wait 2 hours for a car to appear. All these conditions appear to me, as labor theft. The numbers are not insignificant and represent cost savings that rental car companies do not enjoy. So, go ahead, add in the new numbers and then subtract the uncompensated labor and see how they compare to rental car companies in the same geographical area.

As to shift tying:

You may not be familiar with concepts of anti-trust laws and monopolistic practice. In case you are not familiar, I will elucidate. There are 2 basic types of monopolies. One, the more familiar, is horizontal collusion where companies conspire to fix prices and agree to not compete. The other is vertical anti-trust behavior where an attractive product is coupled with unattractive products (product tying) and bundling where products are coupled with undercut product pricing to driving competitors out of business. Microsoft was convicted in federal court for this form of monopoly. Luckily for Microsoft, the verdict was thrown out after GW Bush took office.

Shift tying (product tying) effectively shields cab companies from the market by covering unattractive shifts through coupling them to more attractive shifts. So, if there is no business on the street the cab company is immune from those market conditions. Their ‘market’ stays steady. In addition, there are no 24 hour cancellation privileges for cab drivers. So, the market artificially constructed by the cab companies is further shielded by making it impossible to forgo a rental when market conditions are down. If a driver (lessee) doesn’t show up on a dead day they still have to pay the rental fee. This represents, in my opinion, 2 levels of market shielding from the same imposed condition of shift tying.

This is, to me, a clear violation of law and is, to my knowledge, making its way through the justice department and will be acted upon when Bush is out of office. Market shielding is the test for any anti-trust litigation. This practice clearly is intended, as far as I can see, to do just that. There should be no other relationship between lessor and lessee at a rental car company than at a cab company when viewed from this perspective. The alternative is for the cab companies to treat their drivers for what they are: employees and pay them wages for the time they contribute, including overtime after 8 hours.

So, let’s see how these adjustments compare with the average rental car company. Do you think that Hertz would allow Avis to force the same conditions on their customers as do cab companies or do you think Avis might call foul? This would clearly be anti-competitive to a business in the same market. So, the next phase of anti-trust comes into play. When competing companies engage in the same anti-competitive behavior horizontal monopoly (collusion) rules come into play as well.

Your implied supposition, by taking up the question of increased compensation for cab companies, should address these other questions before exacerbating the problem with incomplete arguments giving fuel to inflammatory political rhetoric. Your arguments are not new and usually come out of the mouths of some political hack or henchman each time a new political cycle rolls around. I am not convinced that you are not one of the above.

If you are making an average above $150 per shift after 6 months of driving then it should be obvious that you are in the wrong job unless, of course, you are a well trained, well educated immigrant (or some fool artist or musician, student, etc.,) who needs cash rather than respect and humane treatment. This is remarkable and, from my observations, well above the average. Still, if you add up the actual hours spent getting, driving and returning your cab you will find that the hourly average is below, substantially below, $15.00 per hour.

– (not so mad) Hattie

I want to make a few things clear.

I agree that the cab companies have not presented a valid rationalization for an increase in gate fees. In fact, this is one of my frustrations with the ordinance as written.

You bring up excellent points regarding the disparity of pricing between a pure car rental company and City cab companies.

However, I would like to raise a few flags with some of the math.

First, a significant cost factored in gate fees is the right to use the actual medallion. That comes straight off the bottom line. I’ve heard Yellow pays about $2,200 a medallion per month. That cuts their revenue (before costs) roughly in half.

Second, I think it is very easy to imagine costs being lower than they actually are. Yes, we can both calculate revenue and subtract the cost of medallions. But, no matter how cheap you believe cab companies may be and how shitty they treat their employees (and I agree they are cheap) neither of us really knows what their true expenses are.

This is why I believe it is ESSENTIAL that the Board of Supervisors have audited financial statements from the cab companies (and made available to the public) so that they can see what their costs actually are BEFORE a gate increase is approved. I’m sure that you agree it is irresponsible of the Board and of the greater tax paying public to regulate increases in fees without an understanding of why these fee increases are necessary.

I was surprised to hear that other drivers’ average earnings are so low. I may have not made this clear in the post, but I have been driving a cab for about 6 months. I do not consider myself a professional by any means, but I have been diligently recording my earnings throughout my short time as a driver. As of today, my average take-home across all my shifts is $172.57. I concede that number will continue to decrease during these slow winter months, probably approaching $150, but will then be positively offset during the busier summer months. I also came across an estimate in this analysis which claims SF drivers make an average of $117 per 10 hour shift.

I also agree with you that the City should provide for health coverage for taxi drivers. It would be easily funded (along with other improvements such as working security cameras) if the City moved toward a transferable (for sale) medallion system. But, that is a topic for another post.

I do take issue with your claim that cab companies prey on immigrants. To me, this implies immigrants have no other choice than to become cab drivers, which is simply not the case. If you don’t like the terms that the cab company gives you (tying shifts together) then walk away and get another job.

In my taxi course last June there were, of course, a number of immigrants learning the trade of taxi driving. I asked one guy what he was doing before. He worked at a convenience store in the City and made $9/hr. I see him now sometimes on the road, he works for one of the large computerized dispatch companies. I’ll ask him how he likes it. He says it’s hard work, but he makes a whole lot more than he ever did at the convenience store.

Cab driving offers an amazing opportunity to unskilled immigrants. Many of these drivers have no formal education, do not speak English well, and have no other marketable skills. Yet, they can earn $15/hr tax free*. I think that’s a remarkable thing. (*Of course, we’ll continue to debate this $15/hr number. It is common knowledge that many cab drivers do not pay tax, to Uncle Sam’s great surprise.)

Hoopla Hattie: despite our disagreements, I think we agree on a few key issues:
- You and I both believe the City government and its residents deserve a clear explanation of why cab companies need increased revenue.
- Increasing the gate fee will squeeze cab drivers, a hard working population that already feels squeezed as it is.

The data cited is laughable, rife with bias and inaccuracies. Cab drivers in San Francisco do not come near to making an average of 15 dollars an hour. On 2 nights a week, Friday and Saturday, hourly takes may equal or better that figure but the rest of the nights and all of the days the take is, on average, half that or less.

The threat of putting on ‘prime time’ cabs means that the only time when any money can be counted on will be gone. Making everybody equally poor is not an intelligent solution. But, then again, intelligence is not the issue in political favoritism and hack political blogging.

The average of $91.50 is for 7 days a week times (X) 2 or $183.00 a day per cab, or $1,281.00 per week, or $5,551.00 per averaged (4.333 weeks) month per cab (Yellow Cab has, approximately 350 cabs so their monthly take is around $1,942,850.00. That is pretty good takings for a car rental company, which is all a cab company pretends to be.

How is it that Hertz and Avis and UHaul rent their vehicles for 1/7th this amount, have nearly the same overhead (minus order taking, dispatching and driver insurance) and still pay dividends to their share holders? A rental from Hertz in San Francisco for January 2008 for a full size 4 door sedan is $195.46 per week (including all taxes/fees).

The larger companies provide order taking and dispatch services where the smaller ones do not. The lease rate is the same. These operations are not cheap but they are manageable. But, what do you get in these services? Precious little. Do you think the cab companies pay top wages for order takers or dispatchers? The answer is no. They pay the lowest wage they can get away with and then force tips to fill in the difference.

Desoto stills has a decent radio dispatch system as does Luxor on computers but Yellow and the rest are either a shambles (Yellow) or don’t exist. (Yellow Cab has, at least, stopped the practice of tipping the order dispatchers but they still allow tipping at the cashier and cab dispatch windows in direct violation to the law. The other cab companies take whatever money they can coerce.

The other major expense that rental car companies don’t have is driver insurance; currently around $800.00 per month. Order taking and dispatching costs, if done correctly, are around $500,000.00 per year. Subtracting the $9,600.00 per month insurance and the $41,666.67 monthly dispatch costs and Worker’s Compensation $43,750.00 per month (total: $95,016.67) from the $1,942,850.00 monthly take leaves $1,847,833.33 a month to compare with the operating costs and profits of rental car companies. I have a feeling that cab companies would have the slight edge in that comparison. Nice work if you can get it.

Even taking the $91.50 as the shift fee (which is low than the reality) a driver must make an additional $40.00 for gas (per shift), pay ‘tips’ to cashiers and dispatchers making the daily nut, at minimum, $150.00. A driver must pay that amount before earning a dime for themselves. If they don’t make it they are held out of service until they can find the money or quit.

If you go out and pull $220 from the streets, in the 9 hours you have to work, your take is $70.00 for a 10 hours shift period (only 9 hours are productive hours). If you add an average of 2 hours of waiting time before getting your cab and the time it takes to wait in the gas line and the line to pay your fees you have spent 12 hours for $70.00 ($5.83 an hour). This is a typical take for a day driver.

Saturday/Sunday days may return substantially lower daily takes. Night drives make 20% more during the summer and fall but 10% less than day drivers in the winter and spring. San Francisco has a turn over rate of nearly 2,000 drivers per year out of a total of 6,000 registered drivers (1/3).

Cab companies have had the best of both worlds for a long time. They ignore labor laws by having 10 hour shifts without minimum wage or overtime and ignore contract law and anti-trust law by shielding themselves from the market, product tying (if you rent a Uhaul on Friday you don’t have to take it on Monday as well, as is the practice at a typical cab company) and inequitable performance of contractual obligations. They prey upon immigrant populations who are thankful to have any source of revenue after coming from countries were laws are non-existent. Cab companies are the Third World come home to roost.

Shed no tears for the cab companies. Their ride is straight to the bank. The law is beginning to catch up with them and they now have to think about providing health care coverage for their drivers. They have threatened to go out of business if these laws are enacted or, at least, impose draconian measures. They would prefer to scratch another driver off the active list because they died than dig into their precious purse to provide a minimum of preventive health services. San Francisco loses, at minimum, 1 driver per week to preventable disease, traffic accidents, murder and suicide.

I can see where you would advocate adding to the value of an industry over the value of other businesses (cab drivers are, by fiat, contractors) if there is some secret benefit to you. Whatever value you see in impoverishing a group of very hard working people to line with gold the pockets of those who will never have enough is for you to consider carefully. Or, as I would guess, you couldn’t care any less what happens to the politically disenfranchised. After all, it is good to be the king or, at least, a friend of a friend to the king.

– Hoopla Hattie (copyright 2008, all rights reserved)