Taxi turbulence - Page 2

SF's cab industry is about to change dramatically — but no one knows how an experiment in selling permits will actually turn out

Dorian Lavender hopes to buy a taxi medallion some day.
Photo by Skyler Swezy

But critics, including Judge Quentin Kopp, the former San Francisco supervisor who wrote the 1978 law that created the old system, say the medallion holders just want to cash in on something that has always been city property.

The pilot project approved by the SFMTA board allows the city to sell up to 60 medallions directly to drivers and allow about 300 drivers over the age of 70 to sell their medallions to any qualified driver who can come up with the cash. The program aims to set a fixed selling price, but has yet to do so, instead setting a $400,000 limit. It is estimated that medallions will sell for no less than $200,000.

That, of course, will be a huge windfall to the sellers, who paid nothing for their permits.

The pilot program was essentially a done deal even before the Feb. 26 vote. In an e-mail to the Guardian, agency spokesperson Judson True confirmed that $11 million in taxi revenue had been added into the MTA budget before the vote took place.



Kopp sat behind the desk in his West Portal neighborhood office a week before the MTA vote, bitterly condemning the medallion sales program. "It's based on greed. It's based on City Hall greed," he said. The stentorian 82-year-old occasionally thumped the desk with his fist for emphasis as he launched into the history of Proposition K. Then-Sup. Kopp authored that landmark legislation prohibiting private companies from owning driving permits, instead granting control to drivers.

"This will reverse a system that gave a genuine cab driver the opportunity to obtain a permit and replace it with a system that restores the ability of people with lots of money to buy a permit," he said.

But Kopp's bill had some unforeseen consequences. The list has become so long that medallions are being issued to people in their 60s and 70s — and some of those people are driving passengers around town despite failing reflexes, eyesight, and motor skills.

Carl Macmurdo, president of the Medallion Holders Association (MHA), believes that selling medallions will provide an exit plan for geriatric drivers while giving younger cabbies an entry opportunity. At 59, Macmurdo is still a full-time driver and has been in the industry 27 years.

It makes sense that MHA members are generally in favor of the pilot program — they could potentially make a mountain of money. Although only those over the age of 70 are now eligible to sell them, the age limit could be lowered in the future.



The United Taxi Workers (UTW) headquarters consists of a few cramped offices on the fourth floor of an old office building in the Mission District. All the interior trim is painted taxi-yellow. In late January, UTW spokespersons Mark Gruberg and Rua Graffis sat at a large table, fearing the worst.

They predict the sale of medallions will provide large cab companies with the equivalent of indentured servants. They say drivers will need upwards of a $200,000 loan to purchase a medallion, requiring a hefty downpayment.

Few drivers will be able to pay for a permit with savings, so the system will only work if someone is willing to finance those purchases. And drivers who are recent immigrants or have bad credit may not be able to get traditional loans. So they could wind up borrowing from their employers, the cab companies, UTW activists say — and by owning the debt the companies will essentially own the medallion.

"Supposedly there's going to be a provision that says a cab company can't lend money to a driver toward purchasing a medallion. But it would be so easy to get around that by hooking up with an outside lender," Gruberg said.

Another fear is that the pilot program will favor young drivers and punish veterans. "Suppose a 27 year-old is on the list and I'm 63. Which one of us is the bank more likely to lend money to?" Graffis asked.