While sitting in the queue to pay the toll for the Bay Bridge Monday, I heard two great counterintuitive pieces on KQED.

The first was a thoughtful comparison between our quality of life now compared to the distant past. It is a true and important comparison and a nice reminder of how great our lives really are in modern times.

“A Very Rich Man” KQED Perspective:

• >MP3 Direct Link<
• Program Page

The second was a nice piece by NPR’s Morning Edition which sought to answer the question of why Americans have built up so much personal debt in the past 20 years. I liked this part: for some, debt it good. Debt is not always an evil thing.

In my case, I know that my income will be considerably higher in a few years than it is now. As exemplified by the example in the story, it would make little sense for me to save money now given my limited income.

“Why Do We Borrow So Much?” Morning Edition Story:

• Segment Page

San Francisco cab drivers face two recent cost pressures: a recent gate fee increase combined with the recent climb in gas prices.

Fortunately, these cost pressures come at a time when aggregate demand for taxis in the City is increasing. More tourists, outdoor City festivals, and frequent conventions bring in more and more cab passengers as the summer approaches.

However, I paint a bleak picture for this winter. As seasonal demand for taxis wanes in November, this winter could be the toughest yet for City cab drivers and companies. Qualified, skilled cab drivers will seek new income opportunities as average take-home pay dips to new lows this winter. Cab companies will likely have a more difficult time than ever filling shifts, putting pressure on hiring managers to accept drivers with less stringent requirements for clean driving records, English proficiency or general City knowledge.

Given this bleak outlook, I think my cab driving may come to an end (or break) at the end of October.

I point your temporary attention to a Flash website produced by UC Berkeley j-school grad students Eric Zassenhaus and Amy Jeffries.

The video clips thumbnailed along the bottom are accurate and colorful paintings of a typical taxi shift. Well worth a view.

But wait, there’s more. The site also features insightful interviews with Heidi Machen, the SF Taxi Commission Executive Director; Jim Gillespie, Yellow Cab President; and Thomas George-Williams, United Taxicab Workers member.

Since I drive a cab in the City and can’t shut up about local politics, I have some pointed reactions:

I don’t know who Heidi Machen is or how she got to be Executive Director of the SF Taxi Commission, but she doesn’t seem to have an accurate grasp of the industry over which she regulates. This is a bit scary.

When asked about the recent gate-fee increase, Ms. Machen responds with a bubbly response. “In many ways it’s very positive,” she starts, repeating again for emphasis, “in many ways it’s very positive, because, if indeed the taxi companies needed money to purchase the alternative fuel and hybrid vehicles San Francisco is looking at a clean taxi fleet in 3-4 years. Wow! That’s phenomenal!”

“If indeed?” If indeed? Ms. Machen, your job, for which you are paid a bulbous salary of some sort, is to be Executive Director of the Taxi Commission. There should be no “if” in your response. You should know whether or not taxi companies need money to purchase alternative fuel and hybrid vehicles BEFORE implementing fee increases.

Continuing, “On the other hand you look at the controller’s report and the controller said this would have an immediate detrimental effect on taxi drivers’ incomes. So, that can be a negative, obviously, because taxi drivers, a lot of them, may be hanging on marginally. On the other hand, maybe it encourages taxi drivers to become more efficient. Some would fear it would make taxi drivers more reckless.” Ponderously she summarizes, “I think there are some positives and some possible negatives that we’re looking at.”

My fear is she doesn’t seem to “get it.” A key sticking point: taxi companies need CPI gate increases but drivers also need correlated revenue increases. The discussion of green cabs is a sideshow distracting from this core issue.

On the other hand, Mr. Gillespie in his role as General Manager of Yellow Cab understands the situation perfectly. Unfortunately, his role is not an advocate for drivers but instead for revenue maximization for Yellow Cab. (This is not a judgment of his motivation, just a recognition thereof.) But, at least he “gets it.”

Thomas George-Williams, an active member of the local United Taxi Worker union “gets it” too. But, as most drivers are not members of the Union, its influence, regardless of Mr. George-Williams “getting it,” is unfortunately questionable.

Link

Mayor Newsom signed a bill last week that increases gate fees for most cab drivers by $5 (effectively a $.50/hr paycut) and increases the gate fee for Compressed Natural Gas and hybrid cab drivers by $13.50 (effectively a $1.35/hr paycut).

I first learned of the gate fee increase when I showed up for work this weekend. All around the cab yard there were signs posted alerting drivers of the gate fee increase which clearly identified the Mayor and Board of Supervisors as the culprit, not the cab company itself.

The Mayor’s office issued a press release that would, in theory, summarize this news. It does not. In fact, it paints a rosy picture that this legislation makes the City’s cab fleet more green and that cab drivers will jump for joy like leprechauns at the end of the rainbow to the news that we’ll all be driving Prius cabs.

What follows is the actual press release and a bit of cynical discussion, as usual.

Mayor Newsom Signs Alternative-Fuel Taxi Legislation

3/6/08 – Today, Mayor Gavin Newsom signed legislation that will enable the purchase of more alternative-fuel taxi cabs for use on San Francisco streets. The legislation will help the City meet its commitment to reducing green house gas emissions with a higher gate fee, which will allow taxi cab companies to purchase new alternative fuel vehicles and supply them to drivers. Taxi drivers also benefit with lower gas costs associated with more efficient vehicles that get better gas mileage, or use less expensive alternative fuels.

“Transportation accounts for over half of San Francisco’s greenhouse gas emissions, and it is imperative that we look to this sector for commensurate emissions reductions,” said Mayor Newsom. “The legislation I am signing today complements the pledge I made in 2006 for an all-green taxi fleet and provides a mandate for cab companies to convert their vehicles.”

Mayor Newsom’s 2006 State of the City Address challenged the Taxi Commission to create a 100% “green” taxi fleet. Approximately 15% of today’s fleet is either Compressed Natural Gas (CNG) or hybrid vehicles. This legislation is expected to increase that percentage to 100% by 2011.

Last week, the Board of Supervisors passed legislation codifying the Taxi Commission’s policy and added a gate increase of $7.50 per vehicle. Specifically, the legislation amends the San Francisco Police code by raising the taxicab gate cap to $96.50 and ratifies gate fees previously charged up to $91.50 per shift for the period of January 1, 2003 to October 27 2006; to authorize a $7.50 surcharge on the gate cap for low emission vehicles; and to require taxi companies to reduce average per vehicle greenhouse gas emissions by 20 percent by 2012.

“This legislation came about because the status quo gate cap cannot continue,” said Supervisor Michela Alioto-Pier. “I’m pleased we found a way to green the taxi cab industry without bankrupting the companies and without doing so on the backs of cab drivers.”

The 2007 Taxi Emissions Resolution required that the San Francisco taxi industry reduce its total Greenhouse Gas (GHG) emissions by 50% from current levels and 20% from 1990 levels by 2011. Under the resolution, the San Francisco Taxi Commission committed to work to achieve zero net carbon emissions by offsetting the total amount of GHG produced by the San Francisco taxi fleet with an equal amount of renewable energy or energy efficiency by 2015, and by 2020 will work to achieve zero gross GHG emissions by permitting only zero emission vehicles. Additionally, the Resolution urged the Board of Supervisors to enact legislation to raise the per-shift gate fee to subsidize the purchase of high-efficiency vehicles.

The magic of PR spin never fails to amaze me. Is it so hard for our elected officials to be honest? Do they actually believe the things they spin? They must not. They must understand the reality. Do we live in Disneyland? Are we on Mars?

The headline should read, “Mayor signs taxi gate fee increase, lowering pay for City workers.”

As the SF Taxi Live blog points out, the choice quote of this press release has to be Supervisor Michela Alioto-Pier’s statement, “I’m pleased we found a way to green the taxi cab industry without bankrupting the companies and without doing so on the backs of cab drivers.”

“…without doing so on the backs of cab drivers?” Ms. Alioto-Pier, have you read the legislation you just passed?

Look, Mayor Newsom and Ms. Alioto-Pier, YES we need to match gate fees with inflation and increase gates slowly.

But, don’t pull bullshit like this and pass off a gate fee increase as green legislation. Your press release is dishonest and sidesteps discussion of an important issue: City taxi drivers will pay more for their cabs at a time when gas prices are already taking more money than ever out of their pockets. We should be discussing how drivers can ensure their take-home pay increases with inflation, just as cab companies’ gate fees do.

Mr. Newsom and Ms. Alioto-Pier, please be cognizant of the effects of legislation you pass. You may live in Disneyland, but your citizens do not.

Links

• SF Taxi Live Post
• Official Press Release

When I drive an 11 hour shift and make only fifty or sixty bucks I feel pretty sour. This doesn’t happen often. But, it does happen a few times a month during this time of year when demand for cabs in the City is seasonally low.

My angry mind jumps first to the cab company. How can this evil cab company charge me so much for my taxi, gas and dispatch services when I’m just barely making money to pay rent? What sort of evil people must they be to squeeze pennies out of the pockets of immigrants and hard working laborers?

(I don’t usually feel these thoughts. In fact, I have a great deal of respect for the cab company I work for.) But, many cab drivers feel these thoughts often. Some of them have posted on this blog or others to express their frustration at high gate fees and poor treatment.

Many American workers have these same thoughts about their employers. Whole websites are dedicated to venting these thoughts about individual companies.

STOP! Take these angry thoughts elsewhere: Aim them at your government.

Robert Reich is former Secretary of Labor under Bill Clinton and a regular commentator on my favorite radio program, Marketplace. He has an hour full of extremely wise words on a past edition of the Commonwealth Club of California radio program. (Unfortunately, these wise words are only available in Real Audio format.)

Among many other thoughts he shares in this program, one I latched on to with the whole of my heart is that American citizens can never look toward corporations for true social change. A corporation is a machine. It is a machine with one relentless goal: to create value for its shareholders. Let’s not judge this as bad, good, or whatever. It just is.

Accepting the fact that corporations are value creating machines let’s revisit our anger from above. Let’s not blame Wal-Mart for bad wages. Let’s not blame the taxi company for a high gate fee. Let’s not blame health insurance companies for refusing to accept high risk subscribers. These corporate entities are nothing more than the result of an evolution of best practices to create value for shareholders.

The only true accountable way of making significant societal changes such as a minimum wage or universally available health insurance is ONLY through government regulation, not through the magic of an oxymoronic corporate conscience.

Links

• Commonwealth Club Broadcast
• KQED Forum Interview with Robert Reich

The Examiner has an update on the saga of supervisor Alioto-Pier’s original proposal to considerably increase gate fees. (A gate fee is the rental price of a taxicab charged to cab drivers.)

A much more reasonable $5 increase (compared to nearly $20) was put forward by supervisor Aaron Peskin. Supervisor Chris Daly opposed any increase, notably commenting, “To charge the lowest-earning segments of the taxi industry for a large share of cleaning up the industry is the wrong way to go.”

Another blogging cab driver had a bunch of posts related to this news.

Links:

• Examiner article
• Fellow blogging driver
• Original gate fee increase discussion

In some ways, blogs are great. They present frequently updated writing with a nice user interface that emphasizes recent postings first. But, most blog interfaces (including this one) bury old postings even if new, interesting and worthy comments are posted. I did my best to address this by adding some of the widgets you now see on the right that show recent comments and top viewed posts regardless of recency of writing.

But, I would like to specifically highlight an involved discussion taking place in the comment section of a post on a quiet topic whispering across the offices of some City politicians: a proposal to increase the amount City taxi drivers pay to the cab company for their cars, also known as gate fees. If you read this blog, which you do since you read the first part of this sentence, you might like to check out that discussion. If you like sentences like the previous one, you may like this Wikipedia article.

Link

The Examiner reports Supervisor Michela Alioto-Pier recently proposed a significant increase in taxi gate fees charged to cab drivers.

(Quick background: A ‘gate fee’ is the rental fee charged to a taxi driver for a shift. Taxi drivers pay the gate fee, plus gas and dispatcher/cashier tips. The current average gate fee for large companies — Yellow, Luxor and DeSoto — is $91.50. The proposed ordinance increases that average gate fee to $110.)

Obviously, most cab drivers, like all rational human beings, wouldn’t enjoy a 10% ($2/hr) pay cut. Are these gate increases necessary? Is this legislation desirable? Let’s discuss this a bit.

Does SF need a taxi gate fee increase?

Here are the facts as I know them:

• Cab companies operate on very thin margins. My gate fee (average $91.50) pays all of the following:
  • renting the use of the taxi medallion (artificially limited to about 1500 in SF)
  • the depreciation of the actual vehicle being driven
  • liability and workers’ compensation insurance
  • labor (dispatch, cashier, admin, gas men, maintenance/shop)
  • facilities (lease, physical plant, etc)
  • vehicle maintenance direct costs (spare parts, consumables such as oil, transmission fluid, window replacements, etc)
  • computer and telecommunication expenses (dispatch radios, multiple phone lines, computer dispatch systems)
  • misc admin overhead (accounting, waybill record keeping, legal, paratransit compliance)
  • surely more fees/costs that I’m forgetting or am not aware

  These costs add up very quickly. I am surprised I can get so much for my $91.50.

• The last significant increase in gate fees was in 2002 increasing to $91.50 from $83. The City appears overdue for a gate fee increase. Here is a chart:



• The City should peg gate fees with some sort of CPI. It is only reasonable to peg gate fees to some sort of cost of living index. Not doing so effectively reduces taxi company revenue each year the gate fee is not increased. This is a good aspect of the proposed ordinance.
• Increasing gate fees comes at the direct expense of cab drivers, not City residents. The proposed fee increase is an effective hourly cut of $2/hr. (Cab drivers currently earn between $10 and $20 per hour during 10 hour shifts; $15 is a reasonable mean.) This is a pay-cut for a vital City profession that provides safe, secure, and quick transportation to City residents and visitors.
• Lower pay rates for taxi drivers leads to lower quality of service, including more dangerous drivers. Lower hourly wages limits demand for the profession, lowering the bar for potential applicants to become licensed drivers. Less qualified applicants will then become drivers, including those with more questionable driving histories, unsafe driving practices and poor knowledge of City geography.
• The ordinance presents neither clear nor compelling evidence that cab companies need increased revenue. (PDF Link, ordinance on pages 3-7) Again, I feel a case can be made that companies DO need more revenue from gate fees (see above), but the ordinance as written presents an ambiguous need for increased funding.

A few reasonable requests before increasing taxi gate fees.

Taxi drivers, City residents and elected representatives should request the following before implementing an increased taxi gate:

• Clear and definitive evidence available to the public (perhaps audited financials) that points to a need for increased revenue through gate fees. I believe a case can easily be made for increased funding for cab companies, but the ordinance as written does not present such an argument, nor has one been made clear to the public.
• A gradual implementation of the proposed rate increase. As written, this ordinance would immediately decrease the salaries of essential City workers. The least the City can do is gradually increase the gate fees to soften the burden of this legislation.
• Seriously consider implementation of service quality improvements for residents. The City (via the Taxi Commission) has talked and talked about a peak medallion system to put more cabs on the road during high-demand evening times. If the Board of Supervisors can implement legislation to increase revenue to cab companies, they should also be able to implement legislation to improve quality of service to City residents. Increased service quality, especially on busy evening shifts, would also justify an increase in meter rates paid by the public for taxi rides, also helping to soften the blow of increased gate fees.

Link to Examiner article
Link to original SF City County ordinance (PDF)
Link to SF Board of Supervisors Government Audit and Oversight Committee Meeting Agenda (11/19/07)

UPDATE: Motivated by Hoopla Hattie’s comments below, I wanted to get a better idea of whether or not we are really due for a gate fee increase. I decided to calculate what the gates would be if they had increased according to the CPI to match inflation. (Of course, this assumes that the gates in 1998 were appropriate. We need financials to know for sure.)

It turns out the proposed gate fee increase puts gate fees at almost perfect parity with the CPI increase estimated for 2008. What’s more, the last gate fee increase in 2002 put gates at parity with inflation.

Assuming gates were reasonable in 1998, and of course this is a contested assumption, the City is due for an increase. And, the proposed rate seems in line with publicly available CPI data from the Bureau of Labor Statistics.