Taxis

To Protect Some Cab Drivers, San Francisco Will Stop Other Taxis from Picking Up Customers at the Airport

The rule will prohibit taxis from picking up passengers at the airport unless they purchase a $250,000 permit.

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A new regulation in San Francisco is supposed to help the city's ailing taxi industry, which has had trouble grappling with competition from Uber and Lyft. But the new restriction will do nothing but pit cab drivers against each other.

Under the rule, which takes effect today, taxis without a city permit—otherwise known as a medallion—are not allowed to solicit customers at San Francisco International Airport. The Municipal Transportation Agency (MTA) says this will "level the playing field."

But, in fact, it will have the opposite effect, benefiting the cohort of cabbies who paid for a lavishly expensive medallion—they cost $250,000 a pop—and blocking the rest from one of the few spots where they can still make consistent cash. It will also help those ride-sharing apps, which are not subject to city taxi regulations and will profit from the suppressed competition.

There are currently 4,800 active taxi drivers in San Francisco, and 1,450 medallions in service, according to the MTA. About 1,100 of those permits—those purchased after 1978—will get a green light for airport pickups. Drivers who acquired one after 2010 will also enjoy "expedited access" to the airport curb, since their permits were more expensive.

The MTA pocketed the funds from those medallions—which brought in a total of $64 million. So basically, the government is giving preferential treatment to a select group of insiders in exchange for some costly kickbacks.

That's not to say the medallion holders are doing well. Many are now in financial ruin: As ridership plummets, it's getting harder and harder to pay off those pricey permits. The San Francisco Credit Union—which loaned drivers $125 million to help finance the medallions—is currently suing the MTA, arguing that San Francisco's failure to reinvigorate the industry violated promises the city had made to the lender. Since 2010, 158 of the permits have been foreclosed on. Not one has been sold since April 2016.

"I'm just in a tremendous amount of debt," says San Francisco cabbie Syed Mohsin. "Basically, you follow the rules, and get screwed."

Kate Toran, the director of taxis for the MTA, tells KQED that she wishes she could buy back the medallions. That won't happen, though, as it would put the city $160 million in the hole.

As new means of transportation become more popular, cab drivers are in a tough position. But it makes little sense for city officials to further limit taxi options just to provide relief to the drivers they bankrupted.

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22 responses to “To Protect Some Cab Drivers, San Francisco Will Stop Other Taxis from Picking Up Customers at the Airport

  1. So long as consumers aren’t unfairly benefited.

  2. “I’m just in a tremendous amount of debt,” says San Francisco cabbie Syed Mohsin. “Basically, you follow the rules, and get screwed.”

    Gee, crony hopes to get rich from gov’t protection, loses money.
    I seem to have misplaced the sympathy.

    1. Tony would call this progress. SF is saving consumers from themselves. The unbridled expansionism of lower rates and better service was having a terrible impact.

  3. Kate Toran, the director of taxis for the MTA, tells KQED that she wishes she could buy back the medallions. That won’t happen, though, as it would put the city $160 million in the hole.

    Oh, come on, Kate. Can’t the city just raise property taxes?

    1. Raise taxes on BOTH plots of privately owned land? Brutal.

      1. New tax bill is $80M. And if you don’t pay, you’re just being greedy.

    2. Tax the rich. San Francisco has a lot of rich. That’s what Kamala wants to do. That’s what Elizabeth W. wants to do. If it’s good enough for those liberals why isn’t it good enough for San Francisco. Besides, SF has a lot of rich people. Don’t let them off the hook.

  4. “The MTA pocketed the funds from those medallions?which brought in a total of $64 million. So basically, the government is giving preferential treatment to a select group of insiders in exchange for some costly kickbacks.”

    That isn’t a kickback. If anything, it’s a bailout.

    The cab drivers who shelled out $64 million aren’t getting anywhere near the value they expected for investing in those medallions, and so the government is stepping to increase their value.

    Additionally, there’s nothing wrong with charging for better access to customers. A private operator would let the cab companies rent space in the loading and drop off area and they would exclude anyone from those areas who wasn’t paying rent.

    Regardless, the market is having their way with the cab companies and the city anyway.

    There’s no way cab drivers would shell out $64 million for those medallions today like they did between 1978 and 2010. They can try to defend that medallion model for a while, but it’s not as if this interference is about to make the threats go away. Uber and Lyft have eaten the medallion system’s lunch, and driverless cars are still looming in the background.

    This doesn’t change that.

  5. As if this would make cab fares cheaper….

  6. Taxi lobby is monumental.

  7. What a delightful example of the problems with a wealth tax!

    $250K medallion? Pay 2% ($5K) or 5% ($12.5K) annually; charge $192.5K inheritance tax. What’s that you say? It’s not worth $250K now? Prove it, bitches; sell the damn thing, pay us our share, then buy it back.

    Lovely lovely Progressive law. How sweet that sounds!

  8. San Fran is a literal shithole, with as much crap on the streets as in port-o-lets.

    Why anyone would voluntarily visit is a mystery.

    1. It’s not that bad. On about 3-4 days/year you can see the Golden Gate Bridge. If you hit one of those days it’s worth it. Otherwise, stay away.

      1. Why look at a monument built from toxic masculinity by white men. Three days of visibility is too much.

  9. All over the US, bad and vague laws have led us to this pretty pass. Uber and Lyft have exploited loopholes in laws that allow them to drastically undercut traditional, medallion-based taxis. Further, the practice of medallions being saleable from one party to another at whatever the market will bear has led to ruinous debt and a falling market value for them. You can’t have it both ways – either mandate that paid, private, low-passenger-number transportation is organized and held at whatever the number a city thinks is best via license, or permit any Tom, Dick, or Harriet to pick anybody up whenever they want for whatever they want to pay. Having a dual system where one group pays huge sums for medallions and the other does not is just crazy. I think that cabbies figured (perhaps reasonably, if wrongly) that people would eschew your neighbor driving you around and go with a professional driver more often than not. It proved not to be the case, as Everyman was willing to take you where you wanted to go for a lot less than a traditional taxi. And of course the whole problem was helped along by GPS, which revolutionized the field and made city street knowledge less important. Personally? I take cabs. Professionals drive them, and I’m not dealing with a kindergarten teacher trying to pick up extra dough to pay for her Pilates workouts or a weird person who wants to be my new best friend.

    1. Cabbies didn’t “figure” anything. They were replaced by advances in technology and the subsequent gig economy. You want to take a cab, driven by a professional licensed driver, go ahead. Someone else wants to take an Uber driven by a licensed driver, that’s their business.

      Whatever the “city thinks is best” is irrelevant. Get up off your knees.

      1. The lesser benefit is that Lyft and Uber directly link to my companies expense system. Any receipt I can get from a cab company is on paper and a pain in the ass to deal with.

    2. “Uber and Lyft have exploited loopholes in laws that allow them to drastically undercut traditional, medallion-based taxis.”

      Or, in plain English…

      Uber and Lyft have followed the laws in such a manner that allows them to drastically undercut traditional, medallion-based taxis.

    3. >>>Having a dual system where one group pays huge sums for medallions and the other does not is just crazy.

      right. the industry is dead. the rest is denial and last-chance profiteering.

    4. Uber and Lyft have exploited loopholes in laws

      Uber and Lyft followed the law but still somehow managed to operate and make money (exploit). This is because the law couldn’t outright ban competition from them (loophole).

      This is what you’re really saying.

  10. $250K to join a cartel, then upset because technology made your medallion worthless? No sympathy here.

  11. Enforce it and find that there are no hacks available to pick up passengers at SFO, unless the County Supervisors try to pick up some pocket change on their own – because they’re all hacks.

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