New rules divide what’s left of San Francisco taxi business

Dozens of cab drivers spoke out Tuesday against taxi reforms that transit officials say will help suffering industry workers and hopefully return some value to taxi medallions purchased for as much  $250,000.

The San Francisco Municipal Transportation Agency Board of Directors was asked to approve four measures as a package to help the taxi industry and its drivers, which included opening the buyer’s market, limiting which medallion holders can enter San Francisco International Airport, waiving a 5 percent retransfer fee, and not reviewing older medallion types.

The recommendations come out of a report from PFM Group Consulting and Schaller Consulting that the SFMTA commissioned and released in May 2018.

Directors ultimately decided not to phase out medallions obtained prior to the implementation of taxi regulations, also known as Pre-K and corporate medallions, but voted 4-2 to approve opening the buyer’s market, waive the 5 percent retransfer fee, and give Director of Transportation Ed Reiskin authority to limit certain types of medallion holders to pick up passengers at SFO.

Directors Lee Hsu and Gwyneth Borden voted against the reform package.

Taxi drivers scoffed at some of proposals, including one to restrict which taxis could pick up at SFO.

Marcelo Fonseca, a 30-year taxi driver, said he strongly opposed the recommendations presented by SFMTA Director of Taxis and Accessible Service Kate Toran:

“You’re bringing more financial hardship on a group of medallion holders to band-aid another group of medallion holders.”

Emotions ran high during the meeting as many taxi drivers said have invested in a medallion have a financial hardship because of the lack of business due in part of Transportation Network Companies such Uber and Lyft.

Cab driver Antonio Von said during he was having a hard time paying his mortgage:

“I was very desperate. I was about to commit suicide.”

Flywheel Taxi General Manager Greg Cochran said the proposal to limit certain types of medallion holders entering SFO is alarming:

“Limiting the earning ability of any class of medallions is not good for driver’s income overall. Good cab drivers need to be flexible where they pick up. They have to be able to pick where they are.”

He said the proposals pit taxi drivers against medallion holders.

There was also opposition from five members of the Board of Supervisors, who penned a letter opposing the proposal to limit the types of medallion holders to pick up at SFO and balancing the fleet by phasing out the corporate and Pre-K medallions.

Borden said none of the proposals presented addressed a lot of issues in the taxi industry:

“Creating more scarcity is not the answer. It’s only going to doom the industry because you can’t compete with less product. You have to compete with more product.”

Borden added:

“We have to get to the root of the problem. It’s price. It’s supply. It’s customer service.”

Reiskin said allowing only purchased medallion holders to pick up at SFO would help not only increase value of the medallion but to also increase supply of taxis in The City:

“We’re trying to shift supply in San Francisco while at the same time shift the value of the medallion for those earned and paid for them.”

SFMTA board chair Cheryl Brinkman said:

“The way I look at it, we really have two choices. We do nothing we continue to watch this industry just continue to die. Death by a thousand cuts and everybody goes down the drain with it or we do something and hopefully drive value back to those purchased medallions.”

Malcolm Heinicke, vice chair of the SFMTA board, directed Reiskin and Toran to come back at a later board meeting to present the plan of limiting taxi drivers at SFO before the transit agency carries out the plan, and to bring quarterly reports to the board to see if the plan is helping the taxi industry.