The cost of fake cabs - Page 2

Start-ups could put the city $300 million in the hole

Mayor Ed Lee just loves the new ride-shares.

But from the perspective of a driver, it's already almost impossible to make a good living. "We're still okay, but a lot of people aren't" Kim said. Paying off a medallion loan, leasing or buying a car, and paying for gas leaves so little left over at the end of many shifts that some of the most experienced drivers are thinking of leaving.

The result, Hayashi argues, will be a race to the bottom, with less-qualified and less-experienced drivers hustling ever harder for a fare — which means more accidents as desperate cabbies speed around town, running lights and cutting corners. It's also bad for the tourism industry — inexperienced drivers aren't good for the city's reputation.

In the end, Carl Macmurdo, the head of the Medallion Holders Association, told me, "We're looking at the total deregulation of the industry."


That may be fine for some people — particularly those who are young, able-bodied, and tech savvy. But it's not so good for the rest of the city.

Regulated cab drivers not only have to undergo a background check and training, they're under a legal mandate to pick up everyone — or any age or ethnic group. They can't turn down a fare because the person wants to go to a part of town they don't like. They can't legally discriminate.

The newcomers have no such rules.

"I took Lyft twice," Hayashi said. "My customer profile on the system is now so low that I can never get another ride. I'm told I must have said something the drivers didn't like.

"Traditional cabs have to pick up everyone. Unless you're on Facebook, have a valid credit card, and are hip and cool to your driver, you can't get picked up. That's just not a good system for a diverse city."

There are plenty of other issues: The new outfits don't have the same level of insurance that traditional cabs require. "And you have to remember, it's like your mother said — don't get in a car with a stranger," Hayashi added. "When you have no idea who these drivers are and they haven't been screened properly ... it's scary."

So far, Hayashi's efforts to crack down on the rogue cabs have not won her much support from City Hall. The mayor is a big fan of the new model, and few supervisors have stepped forward to demand accountability.

They aren't considering that taxis are more than just a business — they're part of a civic transportation infrastructure. But those city officials with stars in their eyes about the latest disruptive technology might also want to look at the cold, hard numbers. By allowing the traditional industry to collapse, they will be allowing an immensely valuable public asset — those medallions — to become worthless, and will be forcing taxpayers to find another $300 million to make up the difference.

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