By Doug Porter
A survey released yesterday leaves little room for doubt that conditions in the local taxi industry pose a very real threat to the safety of passengers, drivers and the general public in San Diego.
Conducted over a two month period by San Diego State University and the Center for Policy Initiatives (CPI), the study interviewed 331 local cab drivers, asking about earnings, expenses, hours, health care, vehicle safety and industry practices.
What emerges from the data is a picture of nearly serf-like conditions, where workers are obliged to perform in unsafe vehicles for long stretches of time with low pay under an ever-present threat of being blackballed should they dare to complain about conditions.
Key findings in the report include:
- Nearly 90% of licensed drivers work as “independent contractors”, leasing their vehicles at exorbitant rates that necessitate working a 70+ hour work week to earn what a minimum wage worker makes in 40 hours.
- Drivers are denied protections normally accorded independent contractors, are rarely covered by insurance for accident related injuries and lack job-related health coverage or workers’ compensation insurance.
- The current permitting/leasing system encourages taxi drivers to drive when tired or sick, and allows lax vehicle maintenance, putting public health and safety at risk.
- Current policies allow City permits to be re-sold on the open market without regulation, for tens of thousands of dollars more than their purchase price. As a result, drivers pay high lease prices and are blocked from becoming owner-operators. A permit purchased for $3000 has a median value of $140,000 in 2013, according to the report.
credit: CPI
Money quote:
Anecdotally, a number of drivers recounted that the owner had taken the keys after they complained about the vehicle or spoke up at public meetings or to authorities – and a few were blacklisted. Some drivers we spoke to have not been able to find work again, while others had difficulty finding a new position.
One driver reported having the keys taken away after he complained that the air conditioner did not work during a particularly busy conference week in the summer. Seeking a new job, he was rejected by another permit holder, who said: “Your boss told me that you’re trouble.
The Sidewalk Incident: Some Very Real Consequences
The long hours required under the present system for cab drivers to make enough money for very basic necessities represent a very real public danger.
A 2am blackout by a driver back in February, 2011 caused injuries to approximately two dozen people as his out of control vehicle drove onto a sidewalk and smashed into a crowd in the Gaslamp district.
The 48-year-old driver, who appeared to be of Arabic descent, was pulled from the cab by the crowd and beaten, suffering a broken nose.
Right-wing bloggers had a field day, claiming that the driver jumped from the cab and attacked people with a pair of scissors. Seizing on the supposition that he was Muslim, they called the incident ‘lone jihadi syndrome’.
The driver was not charged with any wrong-doing following a comprehensive reconstruction of the events surrounding the accident, according to San Diego Police.
The investigation included reviewing a videotape, a complete inspection of the taxicab, crash damage analysis, compiling and reviewing medical records, toxicology tests, numerous interviews of witnesses and an acceleration study and was reviewed by a deputy district attorney prior to the decision not to file charges.
Court records revealed that the driver had two prior crashes and eight citations since 2004. He was reported to have to acquaintances the he was tired on the night of the crash and was taking a new medication.
A Reflection of the Local Political Economy
Bribery investigation of John Alessio started it off.
The release of a report on the sad state of affairs in San Diego’s taxi cab industry yesterday should come as no surprise. The cab business in America’s Finest City has long been a key indicator of the true nature of local politics and its role in the economy.
In 1966, a Los Angeles- based federal organized-crime strike force began investigating police corruption in San Diego, an inquiry that revealed the then-dominant Yellow Cab Company was laundering political donations from bookmakers.
Despite gaining convictions against John and Angelo Alessio, a couple of second tier kingpins, most of the investigation was halted by political appointees after Richard Nixon was elected president.
The then-US Attorney Ed Miller moved over and became District Attorney for San Diego, and Yellow Cab was still on his radar. The fact that the Chief of San Diego’s Police Department got a new car annually courtesy of Yellow Cab made them an obvious target.
Nine former and then-serving politicos, including council members, supervisors, along with the mayor and deputy mayor were indicted for conspiracy and bribery connected to payoffs made to grease the wheels for a rate increase under consideration by Yellow Cab.
One official was eventually convicted of a misdemeanor, but the rest walked off scott-free on the charges, thanks to a decision made by officials in the Nixon administration that prevented investigator David Stutz from testifying in the case.
The days of a monopolistic system for cab companies were drawing to a close. San Diego’s Yellow Cab sold off all its vehicles and re-invented itself as a radio-dispatch service.
So just as the Yellow Cab Company reflected the C. Arnholt Smith/robber-baron era of San Diego’s political economy fifty years ago, today’s cabbies are reflective of an era where sometimes-shady entrepreneurs no longer get their hands dirty with the details of the business. Sub-contracting is the new monopoly when it comes making money with transportation.
The wealth gap between owner and driver has increased as a result. Back in the day, San Diego’s cabbies were unionized. Today, they’re little more than fiefs toiling away in a near-feudal system. Nearly all of today’s cabbies are immigrants, with a large majority coming over from east Africa to escape the brutal civil wars that swept the region back in the closing decades of the twentieth century.
Hope for Change, Maybe?
San Diego’s long-running reign of Republican mayors kept the sins of the taxi industry at arms length by contracting permitting and regulation to the Metropolitan Transit System (MTS). The latest incarnation of this deal expires next month, June 2013. Rather than renewing the five-year MTS contract, the City has decided to extend the contract one year while studying options for reforming the system.
The SDSU/CPI study makes a number of recommendations for short-term reforms. Mayor Filner has indicated that they current arrangement will be ending and changes will be forthcoming. At a minimum, this one simple proposal from the report needs to be implemented:
The City should reform the system so that lease drivers are either afforded the protections of employees or are given ample and realistic opportunities to become owner-operators. Various models exist in other cities to transform the out-of-control permit transfer market, which currently drives high leases and unsafe conditions, into a controlled system that benefits both the City and the majority of taxi drivers.
Ben Hueso
Back in February, then-Assemblyman (and former City Councilman) Ben Hueso introduced legislation (AB 1243) that would automatically classify cab drivers as independent contractors, thus protecting cab owners from claims relating to working conditions, among other things.
Today’s UT-San Diego quotes Tony Hueso in his role as president of the San Diego Taxi Association (a taxi owners group), saying that more rules will hamper service. “Our industry already has to (sic) many regulations, he said.”
Tony Hueso owns USA Cab, one of the largest cab companies in town. USA cab spent 6 years fighting a lawsuit charging that USA Cab treated its drivers as employees while calling them independent contractors, thus avoiding requirements to provide workers compensation insurance, withhold taxes, and pay a minimum wage. The company prevailed at the end of the day, but fears that another suit might be decided differently have cab owners on edge.
Tony Hueso is Ben Hueso’s brother. Assemblyman Hueso is now State Senator Hueso. I doubt that his replacement, Lorena Gonzalez, will continue to push this bill.
“If this health plan is ‘socialism,’ we need more of it”
So reads the headline in yesterday’s Los Angeles Times business section.
The minions of Lord Manchester over at San Diego’s daily fishwrap must be having a big ‘sad’ today, as their widely trumpeted predictions about the cost of health insurance under the Affordable Care Act for Californians are providing untrue.
From the Washington Post:
California health officials on Thursday unveiled the likely rates that insurers will charge under President Obama’s health-care law — and they are lower than expected, rebutting warnings by critics that many people will experience “rate shock” once the law is fully implemented.
On average, a person who chooses a mid-level plan can expect to pay around $321 a month, about $100 less than the amount projected by the Congressional Budget Office when the law was being debated in Washington. For low-income people, much of that cost will be offset by rebates from the federal government.
From that LA Times column:
For the first time, consumers are in a position to make an informed decision about health insurance. They can opt for the lowest-priced plan or they can factor in other considerations, such as personal convenience.
Insurers, meanwhile, are going toe to toe to win customers, keeping prices as low as possible and stepping up quality of service.
Amazingly, the sky hasn’t fallen and the world as we know it hasn’t come to an end.
Ezra Klein over at Wonkblog considers the national implications:
Imagine it’s the end of 2014. California now boasts a working, near-universal health-care system. Nothing perfect, but clearly a success after the first year of implementation. Texas, meanwhile, is a bit of a mess. They didn’t allow the Medicaid expansion so the state’s poorest residents got nothing. They didn’t help with the exchanges, or the outreach, so there aren’t many choices, and premiums aren’t as low one might hope.
Viewed in isolation, Texas’s problems would be deadly for the law. But viewed next to California, they might mainly be a problem for the political class in Texas, which has failed to implement a clearly workable law.
Dumber than a Box of Rocks
In between scouring the P&L sheets of their corporate masters for insider trading opportunities, and swearing that the trickle down of the economics program really isn’t ruling class urine, House Republicans on occasion feel the need to prove to the world just how stupid they really are.
Here’s today’s IQ test-failing poster child, from the Huffington Post:
Rep. Tom Cotton (R-Ark.) on Wednesday offered legislative language that would “automatically” punish family members of people who violate U.S. sanctions against Iran, levying sentences of up to 20 years in prison.
The provision was introduced as an amendment to the Nuclear Iran Prevention Act of 2013, which lays out strong penalties for people who violate human rights, engage in censorship, or commit other abuses associated with the Iranian government.
Cotton also seeks to punish any family member of those people, “to include a spouse and any relative to the third degree,” including, “parents, children, aunts, uncles, nephews, nieces, grandparents, great grandparents, grandkids, great grandkids,” Cotton said.
“There would be no investigation,” Cotton said during Wednesday’s markup hearing before the House Foreign Affairs Committee. “If the prime malefactor of the family is identified as on the list for sanctions, then everyone within their family would automatically come within the sanctions regime as well. It’d be very hard to demonstrate and investigate to conclusive proof.”
This idea was so obviously bad that even his fellow Republicans sensed that something might be amiss. Committee Chairman Ed Royce seemed to remember something about this thing called the Fifth Amendment and suggested that Cotton withdraw his amendment. The end.
On This Day: 1764 – Bostonian lawyer James Otis denounced “taxation without representation” and called for the colonies to unite in demonstrating their opposition to Britain’s new tax measures. 1878 – The first American bicycle race was held in Boston. 1983 – The Supreme Court ruled that the federal government had the right to deny tax breaks to schools that racially discriminate.
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Doug Porter
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Thanks for the information on Taxi’s – rounds out some recent experience. Did you know five years ago a taxi medallion in New York City sold at the auction for over $700,000. Once upon a time to get a hack license in LA required applicants to take a test demonstrating their knowledge of the city (with so many recent arrivals ignorant of the city, cabby knowledge was important.) Once upon a time those owner/operators drove cautiously or risked losing their hack license over traffic tickets. San Diego’s exploited “sub-contractors” are now more aggressive drivers (just watch around the airport) as it’s not their license at risk. Lack of local knowledge contributes to doing round-abouts (longer trips than needed at a higher price), but only the locals really know. And language can also be a problem – how many ways can you pronounce “Milton”. I do agree, it is time to bring back some order in this taxi free for all and how those “black” cars fit into the picture.
Some of my foreign language students, when taking a taxi, have been charged upwards of $50 to come from the airport to my house – a distance of 10 miles. They tell me that frequently the driver does not know where he is going – as evidenced by often receiving calls from the driver asking how to get here – and they just drive around and around and around. The cost should be about $20-25. I agree – regulations are in order – quickly.
Is that really what you got out of the article Judy??
I had an interesting conversation about Chechen bombers shortly after the Boston Marathon with a local Armenian cabbie from Azerbaijan (like Chechnya, also part of the former USSR.) He was very articulate and intelligent and said his son was at UCSD. He thought the Tsarnaev boys were set up by government operatives. When we got to my house, he took one look at the sun-baked condition of the western exterior and offered me his card as a construction contractor.
I think you meant Bangladesh!
Shush my puppies, yer right. oh, well…
Amazing article Mr. Porter! United Taxi Workers and the lease drivers we represent thank you!!!
Great report from the Center on Policy Initiatives. The taxi situation is outrageous, intolerable … so let’s not tolerate it: Anyone who works full-time deserves to earn a decent living. Any company that can’t survive by paying a living wage — or by maintaining a system in which workers can contract in a manner that allows them to make a living wage — shouldn’t be in business. Not to mention that we can’t allow cab-company profit margins to be padded by compromising public safety.
Taxicab scandals are certainly nothing new around here. I’ve heard that when the Trolley lines were laid out back in the mid-’70s the cab companies had enough clout to prevent the Trolley from going to the airport. Anyone know if there’s any truth to that?
Where do you think these taxi cab drivers live? They make their homes for the most part in City Heights and District 4. They join countless other people in those communities who lack health care benefits, job security, and livable wages. My community of City Heights and a few other communities have become the home of the dispossessed, los indignados. Welcome to Bangladesh.
I clicked your link at “field day” and a maddened site, “Atlas Shrugs,” arose, mightily, a Goldfinger-like nude draped over a city skyscraper. It’s owner and chief strategist is a knock0ut freedom fighter named Pam Geller and she’s sitting in for the (undead) Ayn Rand, appearing to make her living as a boner prompt for your average high schooler who’s just finished reading The Fountainhead.
Everyone on the site is pretty sure that the Egyptian driver who blacked out was practicing “sudden jihad” (or the more professorial “lone jihadi syndrome”) and that acts like these were going to be repeated as the idea became more common among immigrants. Governors were called upon to deport anyone darker than Pam Geller, and Ted Kennedy and LBJ were blamed for “allowing third (sic) World immigrants into the United States! (sic!)”, and John Kerry was blamed for having “abandoned 500 of our men in Vietnam.”
Phew, thank you, Doug, for reading this shit so that I don’t have to.
We can witness the deteriorating working standards for taxi’s in San Diego every day. Just now, driving down Bacon in OB behind a yellow painted Taxi #831, the streets are crowded – it’s Saturday night Memorial Weekend and the driver is talking on a cell phone while his brake lights don’t work. No brake lights on a Saturday night. It’s about independent contractors and who does the maintenance?
Perhaps the word Doug has in mind is serf, not fief. Fief means an estate of land or sphere of operation as enjoyed by the old ruling class, according to my trusty Mac dictionary. Our new ruling class is administrators, educators and propaganda spinners, all of whom enjoy paychecks without producing actual goods or useful services.
As for those of us who will shortly, actually be serfs, well, projecting current public services on their slide down to zero, supposedly supported by tax rates inching up to 100%, we will shortly all be grateful if Big Bruvva doesn’t revoke our ration cards. Oh, sorry. That was a line from Ayn. We know how wrong SHE is.
I toiled for Mr. Smith, back in the day, and elsewhere in the industry for twenty years thereafter. Clue for those guessing from the outside: More permits on the street yields LESS income per driver. Basic supply and demand. Ask any San Francisco permit owner, all of whom are required to drive. I dare you to find a fat cat among them, as they must shell out a grand per vehicle, PER MONTH, for insurance.