SAN FRANCISCO–The City of San Francisco is attempting to put in place controversial new rules aimed at saving the local taxi industry, but a local credit union is calling the plan “disingenuous.”
Blasting the proposal is San Francisco Credit Union here, which earlier this year filed a $28-million lawsuit against the city for allowing unregulated expansion of so called ride-hailing companies such as Uber and Lyft, which the CU alleges has caused it to foreclose on 158 taxi medallion loans and suffer losses as a result. Additional information on the CU’s lawsuit can be found here.
Since 2012, the San Francisco Metropolitan Transit Authority has partnered with the credit union to sell medallions for $250,000 at reduced-cost loans to drivers. Unfortunately for cab drivers and the CU, that was the same year Uber and Lyft also began operating in the city.
‘Too Little, Too Late’
In response, the SFMTA Taxi Services division has put a proposal in front of the SFMTA board of directors for approval today that seeks to boost financial aid to wheelchair-serving taxis, drop restrictions on who can buy medallions to allow companies to buy them in bulk, restrict which cabs can seek fares at the lucrative San Francisco International Airport, and phase out about 260 taxi medallions owned by non-driving medallion holders, according to the San Francisco Examiner.
There are about 1,450 medallions in service in San Francisco currently, according to the SFMTA, used across 4,800 active taxi drivers.
According to the Examiner, it’s the changes to the medallion program and the airport restrictions that are drawing the most heat. The credit union’s CEO, Jonathan Oliver, told the publication the newest effort to save the taxi industry is too little, too late.
“After two and a half years without a single medallion sale, the SFMTA has proposed ‘reforms’ which will not solve the underlying problems of the industry or the medallion transfer market,” Oliver was quoted by the Examiner as saying. “Instead of taking a global approach, which is what we have recommended, the proposals end up pitting one segment of the taxi industry against others.”
Government Response
The SFMTA told the Examiner, however, that phasing out the pre-1978 medallions would encourage investors who lease those medallions to seek other medallion holders to lease from. SFMTA argues those pre-1978 medallion holders no longer drive, and often work other jobs. But eliminating those older medallions may benefit active taxi drivers who paid $250,000 for medallions in 2012, but it also sets the two groups of medallion holders in opposition, Oliver told the Examiner.
According to the report, the SFMTA has asked the credit union to lower medallion prices, but Oliver said the credit union was only willing to do so if the SFMTA sat down at the table with CU representatives and taxi industry stakeholders to find a consensus solution to “figure out” how the taxi industry “can co-exist with the incredible growth” of ride hails.
“The City needs to find the political courage to concede that the existing [taxi] program has failed,” Oliver was quoted as saying.
The Examiner noted that owners of local cab companies have also been critical of the plan.