Cash from cabbies

Yellow Cab pushes driver prepayment plan that city officials say is illegal

The largest taxicab company in San Francisco is trying to squeeze more money from its drivers, who say they're already being hit hard by increased gate fees and rising fuel costs.

Yellow Cab has ordered its drivers to prepay for the privilege of driving each month, amounting to thousands of dollars for full-time drivers. Compounding that financial hardship is the apparent intention of the company to use prepaid gate fees to change the employment status of its drivers from employees to independent contractors who are no longer entitled to unemployment insurance and workers' compensation coverage.

While local officials say Yellow Cab's new policy is illegal, they have little power to compel the company to abandon the plan, which was supposed to go into effect Aug. 15 but has now been moved to December under pressure from city officials and the United Taxicab Workers union. Drivers are also threatening to bring legal action to stop Yellow Cab, relying on a past ruling barring the company from requiring deposits from its drivers and misclassifying drivers as independent contractors.

Repeated attempts by the Guardian to contact Yellow Cab representatives were unanswered, but they had to talk to Jordanna Thigpen, executive director of the San Francisco Taxicab Commission. She found Yellow Cab's prepayment plan to be in violation of the Superior Court's decision. "I was not persuaded that the prepayment was not a deposit," Thigpen told the Guardian. "What they are actually doing is asking for a security deposit again under the guise of an Employment Development Department requirement. But the EDD guidelines are just that — guidelines."

The EDD sets work rules and standards in California. According to its Taxicab Industry information sheet, taxi drivers classified as independent contractors "prepay to lease a taxicab for a period of at least 28 days." Yellow Cab used the line, which is posted prominently for employees to see, to justify requiring that all its drivers prepay up to $1,930.

Bud Hazelkorn, cab driver and chairperson of United Taxicab Workers, said UTW has "been talking to an attorney and hopes to bring an injunction against Yellow Cab." He takes little hope from Yellow Cab's recent decision to push its prepayment deadline from Aug. 15 to December, though he does think it was a response to the UTW's outcry.

For Hazelkorn, it matters little whether the deadline is a week or six months from now. "Any kind of prepayment policy is against the Tracy decision," he said. "They are trying to make themselves look better by pushing back the deadline. But the fact is that Yellow Cab wants to establish a precedent of prepayment and that is illegal."

The 1996 ruling in Joseph Tracy vs. Yellow Cab barred cab companies from demanding security deposits from drivers. The order, issued by Judge William Cahill of the San Francisco Superior Court, "permanently enjoins the defendant [Yellow Cab], from classifying plaintiffs and similarly situated drivers as independent contractors for purpose of denying such drivers any benefit under California law with respect to workers' compensation, unemployment insurance, and paying a cash bond to defendants as a condition of driving a taxicab."

The 1996 case also found that Yellow Cab drivers were being unlawfully misclassified as independent contractors, and ruled that the necessary control Yellow Cab exercises over its drivers requires that they be considered employees. For example, drivers have no control over the amount charged to passengers in fares, and often rely on dispatchers to notify them of potential customers. In addition, Yellow Cab keeps personnel files on each of its drivers, conducts orientation programs for new hires, and does not allow its drivers to advertise their services.

Also from this author

  • Moment of truth

    The Eastern Neighborhoods Plan could determine whether San Francisco retains its working-class residents

  • Tie the same-sex knot

    The Queer Issue: Get married already, why don't you? A guide to quickie queer nuptials