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

Taxis lined up in downtown San Diego.

Credit: albyantoniazzi, Flickr

Above: Taxis lined up in downtown San Diego.

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.

Photo credit: 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.

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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 San Diego State University report on San Diego's taxicab industry.

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“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.

Photo credit: 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.”

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