The Cabdrivers Dilemma
SFMTA’s Taxi Mess: Snafu or Fubar?
• • • • • • • October 29, 2024 • • • • • • •
In the Board of Supervisor Meeting on October 1, 2024, numerous cab drivers spoke about their plight. In 1999, there was no charge for a medallion which would allow a cab driver to operate. In 2010, the SFMTA launched its medallion program. Cabbies were forced pay $250,000 to obtain a medallion to operate a cab in San Francisco. Uber and Lyft drivers do not have to pay fees to provide the same transportation services.
Unfortunately, many cab companies have gone bankrupt due to the competition from Uber and Lyft. Many cab drivers have surrendered their medallions or had them foreclosed. The San Francisco Federal Credit Union, which provided loans for these medallions, has lost millions of dollars. Demand for the medallions has dropped rapidly; medallions that have been for sale since 2016, have had no buyers.
With the CPUC placing no limits on the number of drivers or cars on the street, traffic in San Francisco increased dramatically. Now, with the ride-share program undercutting fares, drivers cannot make a living.”
During the heyday of the cab industry, it was possible to make $250-$300 in cash after expenses. A cabbie could make $100,000 yearly or more for a 10-hour shift. During that time, demand was so strong that cabbies could lease their medallions to other cabbies and be paid as much as $2,500 monthly.
This system changed in 2010 when the San Francisco Metropolitan Transportation Authority (SFMTA) took control of the industry from the Taxi Commission. Due to a budget deficit when the SFMTA took over the regulation of cabbies, they hoped they could make money from the medallion program. The SFMTA decided to confiscate $50,000 of every $250,000 medallion sold. To make the medallions more affordable, the SFMTA provided the cabbies access to the San Francisco Credit Union financing program.
Sadly, in 2012, Uber and Lyft launched their services without regulatory approval. Even worse, although the California Public Utilities Commission (CPUC) first banned the driver service for operating without a license, by 2013, they allowed the ride-share program free access to do business.
With the CPUC placing no limits on the number of drivers or cars on the street, traffic in San Francisco increased dramatically. Now, with the ride-share program undercutting fares, drivers cannot make a living. Today, some cabbies make $120 an hour, or less than half of what they made before. Even worse, cabbies can no longer pick up fares at the San Francisco Airport, which was typically a greater fare! Should a driver abandon their cabbie job, they still have to pay for their medallion loan.
In 2018, the SF Credit Union sued the SFMTA. The credit union claimed they had lost $10 million in foreclosures for this program. In October 2021, a jury ruled against the credit union again. In February, a state Court of Appeals upheld the decision. Lastly, the CA Supreme Court formally denied the credit union’s appeal, closing the case.
Now, the credit union is stuck with clients that have been exploited and cabbies have loans they cannot afford to pay for. This is one of many examples of SFMTA’s poor management skills. The operation has become insular and unsympathetic to the public.
Glenn Rogers, RLA, President of CSFN
Glenn Rogers, RLA
President, Coalition for San Francisco Neighborhoods (CSFN)
Landscape Architect, License 3223
October 29, 2024
