By Rachel Brahinsky

A long-standing dispute over how the taxi industry should be managed – and who should profit from it – will come before the Board of Supervisors Nov. 11. The outcome will affect each of the city's approximately 6,000 cab drivers and the thousands who ride cabs every day.

In response to cab company demands for increased revenues, Sup. Tony Hall is sponsoring legislation to raise fares and other fees, citing as justification the economic slump and particularly the softened tourism industry. "Companies are going out of business, and drivers are going to lose jobs," Hall said at a Nov. 4 hearing on the issue. Under Hall's legislation another increase would kick in next year, and again every two years after that.

Sup. Tom Ammiano has offered a counterproposal, which also would raise costs for riders but wouldn't raise them again until 2004; it would also force companies to guarantee health care and workers' compensation insurance to drivers in order to keep those higher fares.

Drivers are not unified: Many say they favor Ammiano's health coverage proposal. But certain drivers, those who own city-issued taxi permits, are divided over whether to demand increased fares now or to reform the system so that health care coverage is a priority. Currently, because cabbies are independent contractors, it's extremely hard to find a health plan that's affordable and provides full coverage.

Others worry that any fare increase would keep people from riding cabs. "Cab drivers need relief," Yellow Cab driver Mike Martzke wrote to board members in a July 25 e-mail. "Most nights recently, despite it being peak tourism season, I average less than $10 an hour, some nights I earn less than a minimum wage." Much of the money collected by drivers goes directly to the company, to pay for the right to drive the cab.

To own and operate a San Francisco cab, you must hold a medallion, or permit, issued by the city. Most medallion holders are required to drive a few shifts a week but can rent out their permit to cab companies for about $1,600 a month. The companies then rent out permitted taxis by the shift to drivers for a "gate" fee – which was capped in 1999 at $83.50 for a 10 to 12 hour shift. The rest of the fares that drivers collect are theirs to keep. There are 1,381 permits on the street.

Both proposals would raise the gate cap to $90 and would raise fares roughly 10 percent. A small percentage of the fare increase would go directly to drivers. San Francisco taxi riders already pay more than those in most major U.S. cities, according to the controller.

The rate hike could also affect the city's budget. The municipal railway gives out vouchers for taxi rides to the disabled and to seniors. Muni's rough estimate is that the proposed increase could hit the agency's budget to the tune of $1 million each year.

The biggest taxi operators, including Luxor, DeSoto, and the Yellow Cab Cooperative, say they can't make ends meet under the 1999 caps, and they aren't convinced there's a way to provide affordable health care. "We support the original ordinance [penned by Hall]. It's very difficult to put insurance together for independent contractors," said Hal Mellegard, a representative from Yellow Cab.

But Mark Gruberg, spokesperson for the United Taxicab Workers, a driver advocate group, says companies are doing far better than they will admit. "Insurance costs have gone up," he conceded, "but ... taxi permit holders are still getting fat checks from cab companies for the use of their permits, which is an indication that there is a high level of profit in the industry." Gruberg and others have also challenged Hall's notion that companies are in fact going under because of the economy.

But it's hard to say, since cab companies' financials are secret. City law requires them to turn in data each year for a confidential city controller analysis, but few have ever complied, and the controller will reveal only general details.

"The bottom line is: tourism is less, and there's less dot-commers," Todd Rydstrom, director of budget and analysis for the Controller's Office, told us after reviewing the largest companies' books.

When the supervisors take up the issue again Nov. 11, the stickiest aspect is likely to be the health care question. But just this week, the city's Department of Public Health indicated a willingness to coordinate health coverage for drivers. "Because taxi cab drivers are, by definition, low-income workers, providing medical care for this population is very consistent with our mission," director Mitchell Katz said in a Nov. 4 letter to Ammiano.

E-mail Rachel Brahinsky at Rachel@sfbg.com.