New taxi rules at SFO help some drivers, but hurt others
Hundreds of San Francisco taxi drivers are in debt after paying $250,000 for medallions, licenses to drive in the city. The city’s plan to help that group of drivers comes at the expense of other drivers, who have also suffered from the taxi industry’s collapse.I first met Syed Mohsin in November, on the day after Thanksgiving. It was the middle of the afternoon, and he’d just dropped off his first passenger of the day, after waiting at the airport for three hours.
These days, most travelers at San Francisco International Airport hop into Ubers and Lyfts. Mohsin says it’s mostly business travelers who use taxis now. So on a holiday, a three-hour wait is normal.
Mohsin plans to work until midnight, hoping to earn enough to pay his expenses, and pay off his debts.
“I don’t have any credit cards left; they’re all maxed out,” Mohsin says. “If this thing continues, what do I do?”
In a metal holder on the dashboard of his cab, Mohsin keeps what looks like a miniature yellow license plate—his medallion, which he bought eight years ago.
Mohsin has one of the roughly 1400 medallions in the city. With it, he can drive a cab, or lease it out to other drivers. But he says he doesn’t do that now, because drivers don’t want to lease from him. It’s just not profitable.
The taxi business has been eviscerated by ride-hailing companies Uber and Lyft. But because he bought his medallion, Mohsin says he has no choice but to keep driving.
“In my situation I am trapped,” Mohsin says “I can’t do anything else.”
A life-changing investment
Mohsin says he’s from Lahore, Pakistan, where he was a newspaper editor.
“I got my masters in literature,” Mohsin says, “but somehow when I came here, I saw everybody was driving a cab.”
Mohsin started driving in San Francisco in 1990. At that time, medallions were free. But to earn one, you had to get on a waitlist. To stay on the waitlist, you had to lease a medallion from someone else, or a company. So that’s what he did.
Then, in 2010, faced with a slow-moving waitlist for virtually free medallions, the city changed the rules. It allowed drivers to buy a medallion, either from the city, or from a older driver who wanted to retire, with the city taking in significant fees. There was a flat price: $250,000.
Mohsin took the plunge. He got out loans, and bought himself a medallion.
“Oh, that was the happiest day of my life,” Mohsin says, “because I knew, I mean, this is good money.”
It was a big investment, like buying a small house (in a more affordable city). But this was supposed to be a surefire way to own your own business.
“I bought my medallion and for a couple of years was just like smiling all the way to the bank,” Mohsin says, “and after that it was nothing but downhill and crying all the way to the bank.
“Follow the rules, and get screwed.”
The timing for buying that medallion could hardly have been worse. A few years after San Francisco started selling medallions, local startups Uber and Lyft swallowed much of the taxi industry. Now, the city estimates that Uber and Lyft drivers outnumber taxis in the city by roughly 30 to one.
Mohsin says the tipping point was 2014, when the airport, which is within the city’s jurisdiction, opened its doors to ride-hailing companies.
“I’m just in a tremendous amount of debt,” Mohsin says. “So basically, you follow the rules, and get screwed.”
Mohsin says San Francisco is like the “wild wild West,” and today’s outlaws are ride-hailing companies.
“Before they had a gun in their hand, and they made their own laws,” Mohsin says. “Now they have a phone in their hands, which is a deadly combination. Why? Because it is basically hurting a poor person, like me!”
Over 160 drivers have defaulted on their medallion loans, according to the the San Francisco Federal Credit Union, which backed those loans. The credit union is now suing the city, saying the city promised it would protect the value of the medallions, but failed to keep that promise.
California limited San Francisco’s response
Kate Toran is the director of taxis and accessible services for the Municipal Transportation Agency. She says, when San Francisco started selling medallions, it didn’t promise to keep out competing ride companies.
“As regulators we can’t promise to maintain a monopoly or regulate other services out, so that promise was not made,” says Toran. “When the program started it was a different world than where we are now.”
The medallion sales program started almost a decade ago. Uber was just forming, and Lyft didn’t exist. As those companies grew, the California Public Utilities Commission (CPUC) declared that it had the power to regulate ride-hailing, not local governments.
San Francisco made recommendations to the CPUC as to how to regulate Uber and Lyft cars, but Toran says that the city lacked the power to limit their numbers.
One thing San Francisco can do, however, is regulate the airport.
[[Photo: Taxis at SFO Nov 2018]]
A shortcut for drivers who bought medallions
For the last few years, the MTA has been working on a plan to reform the medallion system. The most controversial change will happen at SFO.
At the airport, Mohsin takes me where passengers never go: the maze of parking lots where taxis wait around for rides. He taps a taxi ID card against a scanner to drive in, and gets in a string of cars that cabbies call the “anaconda.”
Picking someone up from the airport is the one reliable way for a driver to get a good fare. If you drive around the city, you might get $10 or $15 a ride. But if you drive someone out of SFO, you can make 50 bucks.
The only problem is how long the driver has to wait for a passenger. Mohsin says recently, it can stretch to five hours on a bad day.
Starting on February 1, drivers like Mohsin, who bought medallions, will get in a shorter queue to pick up travelers. Drivers who got their medallions under the older waitlist system will have to idle for longer before getting their ride. 273 medallions that were given out before 1978 will be banned from the airport line completely.
Toran says the MTA’s “intention is to prioritize purchased medallion holders.” Those drivers “have invested the most in the system, in the industry, and yet earn the least.”
Another new reform makes it easier for drivers who bought medallions to lease out their cars to other drivers, who would also get priority at the airport.
Mohsin could lease his cab to other drivers in the evenings. He says he could go home after 5, instead of driving until midnight like he does now.
“I have not seen 5 p.m. going home in ages,” Mohsin says. “If this thing is successful, my life could get much better.”
Protests from the rest of drivers
Of all the taxi medallions in the city, only about a third were purchased, by drivers like Mohsin. The new airport rules come at the expense of the rest of medallion holders. Some of those drivers have been protesting at city meetings, and outside city hall.
Drivers groups successfully lobbied the SFMTA to roll back an earlier plan, which would have barred even more medallion-holders from the airport. But drivers’ recent efforts to prevent or further delay the new rules have fallen flat.
Renate Wymiarkiewicz got on the waitlist for a medallion in 1994. She says she just signed up at a police office for a small fee.
“The police officer, she told me, ‘so it will probably be a ten year wait,’” Wymiarkiewicz says, “‘but you have the medallion til you die, and it’s part of your retirement.’”
She ended up waiting 15 years before earning her medallion.
Female drivers are the minority. Wymiarkiewicz says very few female drivers bought medallions, and that most of them prefer working the airport to driving in the city.
“It’s a safer feeling, especially for the women, to work the airport,” Wymiarkiewicz says, “we have the business people, the tourists.” Plus, she doesn’t have to deal with Uber and Lyft drivers, who she says drive aggressively while staring at their phones.
It’s unknown what impact the new airport rules will have on drivers like Wymiarkiewicz. But she says if she’ll have to wait something like four hours every time she goes to the airport, she’ll just give up and work the city.
“I don’t know how the other girls are going to handle it,” Wymiarkiewicz says. “it will knock out the female drivers from the airport.”
No plan to bail out drivers who bought medallions
The city’s process, of deciding how to change the rules at the airport, has stuck a wedge between drivers who bought their medallions, and drivers who didn’t, like Wymiarkiewicz. She says at a recent city meeting, a driver who bought a medallion called drivers who hadn’t “‘freeloaders.’”
“They think that we’re the freeloaders, and we’re not,” Wymiarkiewicz says. “We put in many years to earn” medallions.
Yet Wymiarkiewicz isn’t upset at the drivers who bought medallions. She feels that they were swindled by the city.
“I feel so sorry,” Wymiarkiewicz says. “They’re starving. They’re having a really bad time.”
Wymiarkiewicz thinks the city should just buy back their medallions. That’s an idea that’s been catching on with drivers who bought their medallions, and with some drivers who haven’t.
“The city is not intending to buy back the medallions, says Kate Toran, the city taxi director. “That’s not part of the reform package. It’s not something that it went before the board, and not something we’re contemplating.”
Toran says the cost would be over $190 million—cutting into the MTA’s budget for transit and other services.
And so drivers like Mohsin have to pay for the medallions’ collapse.
“I would love the MTA to buy my medallion back, give my money back,” Mohsin says.
But since the city has no plans to do that, he’s just glad to get more access at the airport.
“We might be able to recover our losses,” Mohsin says. “Maybe not smiling all the way to the bank, maybe smile halfway to the bank.”
The new airport rules start on Friday. If you’re a passenger at the airport, you probably won’t notice a difference. Unless you get picked up by Mohsin, in which case you might see a smile on his face.