No more taxi secrecy

IN 1978, San Francisco voters approved a plan by then-supervisor Quentin Kopp that was aimed at taking control of the taxi business away from a few big companies and turning it over to the people who drive the cabs. But since the passage of Proposition K, the cab companies have been working every possible political angle to retain the immense profits they earn on what ought to be a tightly regulated business managed in the public interest.

The latest move: as Rachel Brahinsky reports on page 15, the industry is complaining about higher insurance costs and a slump in revenues, and is asking for a roughly 10 percent hike in fares. Sup. Tony Hall is carrying the industry's proposal. A competing proposal by Sup. Tom Ammiano would require some concessions from the companies.

A permit to drive a cab in San Francisco (called a medallion) is quite valuable; the city has issued only 1,381 of them, and under the 1978 law, they are supposed to be held only by people who are actually driving cabs. But most of the city's 6,000 drivers don't have medallions; they rent the permits, shift by shift, from a company (or cooperative).

The drivers who have to rent permits pay a "gate" fee, which is now $83.50 for a 10- to 12-hour shift. On top of that, the drivers – who are legally independent contractors, not employees – pay for their own gas and keep whatever money is left over from collecting fares. The companies provide no health insurance, and the drivers pay their own workers' compensation fees. When times are tough, the drivers always get hurt the most.

Ammiano would allow the gate to go up to $90 and would accept the 10 percent fare hike – with the understanding that the companies would work toward providing health benefits and workers' comp for the drivers by next year. That's a start.

But the real problem is that the city has allowed the industry to operate in total secrecy. Cab companies are supposed to file financial reports with the Controller's Office, but they rarely do. And none of the information is ever made public. Before the supervisors give the companies another nickel, they should demand full, audited financial statements (including income, actual expenses, and net profits), and summary versions of that data should be made public.

City Attorney Dennis Herrera is, to his credit, taking on a different city franchise scam, charging that City Tow stole millions from the public. But that whole mess happened because the city never demanded real financial data from the towing contractor (see Opinion). The supervisors need to be sure that the cab industry (and every other city franchise holder) isn't getting away with its own multimillion-dollar scam.