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City Considers Taxi Industry Overhaul Amid Reports Of Low Wages And Unsafe Cabs

Above: Taxis lined up in downtown San Diego.

Aired 5/24/13 on KPBS News.

The city will not renew its five-year contract with MTS for overseeing San Diego's taxi industry due to complaints about poor working conditions, passenger safety and lax oversight.

San Diego State University and the Center On Policy Initiatives

The low wage and requirements set by taxi leases mean drivers work an average of 71 hours each week. Most of them drive every day to cover operating costs.

The City of San Diego will not renew its five-year contract with the Metropolitan Transit System for regulating the taxi industry when it expires in June, but will extend it by one year to study other options. The decision comes as drivers ramp up complaints about poor working conditions, driver and passenger safety, and lax oversight that has resulted in a virtual black market for operator permits.

In a report out today, the Center on Policy Initiatives and researchers from San Diego State University say taxi drivers earn, on average, $4.45 an hour after paying for gas and weekly fees to lease their cars.

The low wage and requirements set by their car leases mean drivers work an average of 71 hours a week, with the majority driving all seven days, to cover their costs.

Adbirashid Ali is from Somalia and has been driving a taxi in San Diego for five years. He got into the job because of an uncle, but says it's incredibly hard work.

Document

Driven to Despair: A Survey of San Diego Taxi Drivers

Driven to Despair: A Survey of San Diego Taxi Drivers

Click for the Center on Policy Initiatives and ...

“I drive 12 hours a day almost every day," he said. "It’s tough to work that much, almost have no time with my 5-year-old daughter and my wife.”

Jill Esbenshade, an SDSU professor and lead author of the study, said much of what drivers earn goes to covering their expenses.

“The biggest portion of the fare you pay and the tips you give to the driver actually goes to paying the lease,” she said.

Esbenshade says the situation is a serious public safety issue, pointing to a 2011 incident in which a driver fell asleep at the wheel and crashed into a crowd outside the Stingaree Nightclub downtown.

At the crux of driver unrest is an unregulated market in which individuals pay high prices to operate cab companies and lease cars to drivers.

The permits, often called medallions, go for as much as $140,000, according to the report. The permits are similar to liquor licenses; they're granted by a public agency and come with regulation. But unlike liquor licenses, the sale of taxi permits in San Diego has not resulted in income for the public. Buyers pay a nominal administrative fee to MTS to transfer the permit, but the larger transaction happens behind closed doors, typically in cash.

The sales do not violate local taxi ordinances. Taxi union representatives stop short of calling the dealings an illegal black market, but say they create a system that exploits drivers, who are often immigrants and refugees.

The permit holders pass their high permit costs down to drivers through inflated lease prices. Taxicab leases are as much as $400 a week, or about 40 percent of the driver's gross earnings, according to the report.

In this arrangement, drivers are classified as independent contractors and do not have access to employment-based health insurance or workers compensation. That's a precarious situation, as drivers report their cars are poorly maintained.

"Drivers face poverty earnings and working conditions that would be illegal if they were statutory employees rather than independent contractors," said Peter Brownell, the research director at CPI.

MTS requires all taxicabs be inspected annually. It also does random field inspections. But according to the report, 98 percent of vehicles inspected in the field were taken out of service.

San Diego State University and the Center On Policy Initiatives

Driver advocates say taxi drivers' long hours on the job are a public safety issue, pointing to a 2011 incident in which a driver fell asleep at the wheel and crashed into a Downtown night club.

MTS Taxicab Administration Manager Bill Kellerman refuted the claim, saying the figure doesn't take into account the number of cars that pass field inspections. Inspectors do not file reports for cars found without problems. He said MTS has one of the most stringent inspection programs in the nation.

MTS also holds contracts with the cities of El Cajon, Imperial Beach, La Mesa, Lemon Grove, Poway and Santee.

The mayor has assembled a task force to study reforming the taxi industry, which could include transferring the regulation of it from MTS to the city. The mayor will extend the current MTS contract for just one year, instead of the standard five.

That means nothing could change for some time. Taxi driver Ali could face retaliation from his leaseholder for speaking out about working conditions, but he says that doesn’t matter.

“We’re tired of not speaking up," he said. "This is the time for us to speak up and for our voice to be heard.”

Comments

Avatar for user 'JeanMarc'

JeanMarc | May 23, 2013 at 2:52 p.m. ― 1 year, 2 months ago

Every time I try to pay for a taxi with my credit card the driver gives me some serious attitude. What is their problem? They want cash so it is easier to defraud the government of their taxes owed?

They should have card swipers in the back like in NYC. Welcome to the 21st century cabbie!

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Avatar for user 'DonWood'

DonWood | May 23, 2013 at 3:49 p.m. ― 1 year, 2 months ago

The mayor and city council should pay serious attention to this issue. Previous mayors and council members were voted out of office due to earlier local taxi cab scandals.

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Avatar for user 'fgalvez'

fgalvez | May 23, 2013 at 4:53 p.m. ― 1 year, 2 months ago

i created an account just to post this.... I once had a driver lock me in, and drive me to an atm machine because i didnt have any cash on me. It was one of the most surreal experiences of my life so im sorry if i have little sympathy for taxi drivers, most of whom are rude, always talking on their phone and do everything they can to extort cash from me. Most of which probably goes unreported like Jean said.

id say they are lucky to be independent contractors. If they had my job, they would have been fired a long time ago for terrible customer service.

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Avatar for user 'JeanMarc'

JeanMarc | May 23, 2013 at 5:31 p.m. ― 1 year, 2 months ago

fgalvez that is insane. I might have called 9-1-1 on my phone if that happened to me. To prevent such incidents I now ask beforehand if they accept credit cards. If they say "the machine is broken" or anything, I immediately say "ok, I need to find another taxi". Can you guess what they say? "Ok, ok, it works, I will take you"

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Avatar for user 'philosopher3000'

philosopher3000 | May 23, 2013 at 5:50 p.m. ― 1 year, 2 months ago

Let's just clear up some misconceptions, the people driving the cabs are not "independent contractors", they are slaves. Mostly black, immigrants, probably refugees from desperate places like Somalia, that US Foreign Policy has put in jeopardy, these people are willing to work at $4.45/hr. for wealthy tourists and college drunks because they have little choice.

The solution is to limit cab drivers to OWNER OPERATED CABS ONLY. The San Diego Cab Licence is an independent small business licence valued at about $300,000, if the owner isn't willing to risk their OWN life to drive their cab, they should lose their licence and sell it to someone who is willing to take the risk to earn a reward.

I think these commenters above me are a bunch of prejudiced idiots, who, if put in the same position, would be just as rude and ruthless, but that's just my educated opinion.

Cab driving is one of the few small businesses available to otherwise uneducated individuals, where they can be directly rewarded for the quality of their honest work. The licences should not be allowed to be "leased". Next time you get in a cab, ask the driver if he owns the cab, if not ask them to call you one that does. Get their cab licence number and ask for a government issued I.D. before you get in the car. Don't take any cab that isn't owner operated. Then your $5/mile will be well spent.

(note: this goes for bicycle pedicabs too.)

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Avatar for user 'RegularChristian'

RegularChristian | May 24, 2013 at 7:23 a.m. ― 1 year, 2 months ago

Whenever I read about the wages taxi drivers in San Diego earn, I think of the term slave wages. If anyone ever wonders why there's a need for labor unions, this is a good case.

Until this all works itself out, I'll have to remember to tip the poor driver enough to at least buy a meal on their way home.

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Avatar for user 'DeLaRick'

DeLaRick | May 24, 2013 at 8:20 a.m. ― 1 year, 2 months ago

"I think these commenters above me are a bunch of prejudiced idiots, who, if put in the same position, would be just as rude and ruthless, but that's just my educated opinion."

Philosopher 3000,

You're not new. You've posted here before. But just in case you forgot, this comment board attracts bigoted plutocrats. They post their comments between courses at Mille Fleurs before hitting the back nine at The Farms.

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Avatar for user 'JeanMarc'

JeanMarc | May 24, 2013 at 8:21 a.m. ― 1 year, 2 months ago

No one is forcing them to drive the taxis, no one is beating them to death, how dare you compare being gainfully employed to slavery? There is no comparison between slavery that took place in this country and taxi drivers working.

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Avatar for user 'aztec69'

aztec69 | May 24, 2013 at 9:15 a.m. ― 1 year, 2 months ago

I wonder if any of the people who have posted the above comments have ever driven a cab? I have. I spent three years as a driver and eight years as a dispatcher back in the 1970s when C. Arnholt Smith and Don Swortwood owned Yellow Cab. The Company was a cash cow then for the owners and I assume it still is. In those days most drivers earned about $75 a week. If they didn't make tips they didn't eat. Some of them even lived in their cabs. I note the horror stories about how badly cabbies treated their passengers but where are the stories from the passengers who threw up in their taxis, used a cab as a hotel room for a quick trip with a prostitute, or expected a cab driver to run down to the local liquor store for a bottle of their favorite booze? But not all the stories were bad. I remember one quiet Christmas morning I got a call at a house up on Mt. Soledad. I figured it was a trip to the airport but a middle-aged lady answered the door. She told me she had just gotten back from Europe the night before and had forgotten to mail her Christmas cards She gave me a stack of about a hundred cards and had me drive around La Jolla delivering them. When I finished, some five hours later, I went back to the house. She paid me with a crisp new $100 bill, gave me a $20 tip, a bottle of Jack Daniels, and a two pound fruitcake; and sent me on my way! It was my most memorable Christmas ever!

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Avatar for user 'Missionaccomplished'

Missionaccomplished | May 24, 2013 at 9:58 a.m. ― 1 year, 2 months ago

@DLR, thumbs up!

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Avatar for user 'SusanD'

SusanD | May 24, 2013 at 10:39 a.m. ― 1 year, 2 months ago

Why do taxi drivers prefer you pay in cash?
The dispatch companies usually take 5-10% of all fares and tips paid through the credit card machines, even if the passenger did not come from a dispatch call.

Why might a driver be grumpy if he or she drives a long way to take you a short way?
The drivers pay for the gas and high rates to lease the cars during the time it takes to get to you as well as during your ride and any down time.

Consider this: A lot of drunk people take taxis. When they vomit in the taxi, not only does the driver have to pay for cleaning, but also continues to pay the high lease cost during the many hours before the car is dry and fragrant enough for another passenger.
Same goes for other stinky things spilled in taxis.

Why might your driver be having a cell phone conversation?
They typically must drive 10-12 hours a day or even more to scrape together a living after paying the lease, and they must pay the leases seven days a week. They have families and friends, and almost no time when they're not behind the wheel. If you feel strongly that you want your taxi driver silent throughout your ride, please tip very generously for that extra service.

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Avatar for user 'SusanD'

SusanD | May 24, 2013 at 10:45 a.m. ― 1 year, 2 months ago

Those facts in the previous post are verified in the study, Driven to Despair: A Survey of San Diego Taxi Drivers (http://onlinecpi.org/reports/driven-to-despair).

Susan Duerksen
Center on Policy Initiatives

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Avatar for user 'Peking_Duck_SD'

Peking_Duck_SD | May 24, 2013 at 1:47 p.m. ― 1 year, 2 months ago

Jean, this scam to pay in cash is nt unique to SD. You mention NYC, it's not any better there from my experience, they prefer cash regardless of what city you are in.

I consider it just common sense to ask if they take cards before getting in. Maybe it's because SD is not a big "cab own" but I always ask if planning to pay by non-cash methods.

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Avatar for user 'bailarin'

bailarin | May 24, 2013 at 1:48 p.m. ― 1 year, 2 months ago

JeanMarc,

You wrote "No one is forcing them to drive the taxis, no one is beating them to death, how dare you compare being gainfully employed to slavery? There is no comparison between slavery that took place in this country and taxi drivers working."

You need to look at the context of the terms being used. One can be employed but receiving slave wages. Wage slavery has been used to criticize economic exploitation which is what this article is all about.

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Avatar for user 'Peking_Duck_SD'

Peking_Duck_SD | May 24, 2013 at 1:51 p.m. ― 1 year, 2 months ago

SusandD, great points.

I don't take cabs often in SD because I have a car, but the times I have the drivers have always been polite and friendly.

My biggest complaint is thy don't seem to know the streets well and I have to give them directions, but that's. different story.

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Avatar for user 'JeanMarc'

JeanMarc | May 28, 2013 at 1:29 p.m. ― 1 year, 2 months ago

bailarin - Slaves do not receive wages. "Slave wages" is a misnomer. Slaves are property, they are treated like animals and do not receive wages or any compensation for their labor.

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Avatar for user 'PeterB'

PeterB | May 30, 2013 at 4:22 p.m. ― 1 year, 2 months ago

I am the Research Director at the Center on Policy Initiatives, and a co-author of the report.

Regarding safety violations, our report quotes a document submitted to the MTS Taxi Advisory Committee by previous MTS Taxicab Administration Manager, John Scott, which states that during a period from July 1, 2011 to July 1, 2012, “98.05% of vehicles contacted were taken out of service. Of those vehicles, 94.05% were because of safety violations.” However, the report also gives the correct context that these were vehicles stopped for violations, rather than random inspections.

The report additionally notes that according to the same MTS document, in the only random inspections (which took place at the airport) 44% of taxis stopped in during 2012 were taken out of service for safety violations. Note that the airport authority requires an additional permit (and associated fees) and places limits on the age of taxis allowed to pick up at the airport, while there is no age or mileage limit for the rest of the city. Therefore, it is likely that the prevalence of safety violations of taxis in the airport lots (which are, on average, newer) somewhat underestimates the prevalence of safety violations among all taxis on San Diego’s streets.

I think most readers will agree that 44% of taxicabs operating in San Diego with safety violations is unacceptably high.

You can read the MTS Taxi Advisory Committee document reporting inspection results, by clicking on the following link (which is also included as a footnote in the CPI/SDSU report) and skipping to agenda item number 5 (which starts on the 19th page in the whole PDF document):
http://www.sdmts.com/mts/documents/12.14.12MTGPKG.pdf

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Avatar for user 'Tgris'

Tgris | May 31, 2013 at 3:26 p.m. ― 1 year, 2 months ago

I am sorry, but who is forcing these cab drivers to lease the cabs and work as independent contractors!? This low wage argument is completely absurd. If the drivers are not happy with their earnings, they are more than welcome to seek other ways of making a living. Obviously, the owners are charging the market rate, otherwise there would not be so many willing takers, keeping the lease rates “high.” It is simple example of supply and demand in action.

Thank you city of San Diego, KPBS, ect. for wasting resources and time on this complete non-issue.

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Avatar for user 'Len'

Len | May 31, 2013 at 5:07 p.m. ― 1 year, 2 months ago

I suspect most of those who say "They don't HAVE to work for those wages!" also would be angry if they didn't work and got food stamps and other poverty benefits. The complainers seem to live in a bubble, and don't see the homeless sleeping on the streets, the fathers and mothers begging at traffic corners, the 20% unemployed (true number, not government, and it may be higher), the dwindling middle class, the thousands who line up when Wal-Mart has 50 jobs available. Meanwhile, U.S. banks just had the most profitable quarter in history, corporations avoid hundred of millions in taxes, as do the "1%."
Another reason taxi drivers prefer not to accept credit cards is that they must pay the cab owners (the real culprits behind unsafe cabs) in cash, weekly, and credit card payments may not be credited to the drivers in time.

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Avatar for user 'bs'

bs | July 4, 2014 at 10:42 p.m. ― 1 month, 2 weeks ago

I have been an owner / operator of a taxi cab for 30 + years in san diego. I have been reading the complaints on this site.
in 30+ years my taxi has never had a complaint. my driver & I try to do the best job we can to please our riders .
but some of the statements in this site is just stupid ,
the price to buy a taxi in san diego is nowhere near what has been stated on here.
and if the drivers lease their taxi's for 24 hours, then use it as their personnel car when not driving, and we cannot say anything.
the average lease in san diego is $300 for seven days , that comes to app $43.00 a day, the owner pays for ins at $4000 a year, all lic's , all repairs , purchase the car , paint it , install the meter etc.
as for credit cards most businesses have the choice of taking or not taking them , we don't it is mandatory that we take them, even the people that regulate us will not take credit cards. but that is o,k I personally like the credit card even tho you seen to get more tips with cash don't know why. and the credit card company does take 6 to 10%.
some people who lease don't want to pay the lease in advance then work and move on to another company and do the same to them , when you rented your house car ,etc you had to pay in advance . only questionable people can be asked to pay in advance at the time they get into the taxi. and then every once in awhile the fares will rob you or take off and no pay the fare.
I have had people puke , pee,eat , dump food all kind s of things in the taxi.
usually when that happens you have to take the cab to a detailor to clean it.as for taking the long way , most people have a favorite way to go and even if you go the shorter way they get upset so most drivers go the way they are told.and most of the time its longer.
I went to clairmont from the airport the passenger said he new the way and he wanted me to go his way so I did . I went back and got him and went the waay I wanted to the 1st time it was $7.00 cheaper .
we are inspected at mts once or twice a year and on the streets from time to time , I have never failed a inspection or a street test.
I have g.p.s but I find with all the smart phones with g.p.s. the passengers want to tell you how to go . that way they can't say u took them out of the way.
most companys keep their cars in good shape , I know I do.
so when everybody says the companys are getting rich , some may be but I grossed less than $30.000 last year.
I also notice that tis site is a bit one sided , only the people who have a prob post on here, not many who have a good experience post here.
thanks guys
hope to see you in my taxi soon.
you won't have a prob.

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