City Council votes to remove limit on taxi drivers

Chris Pocock

Taxi cab drivers and taxi permit holders packed Golden Hall on Oct. 10 to address the City Council about proposed changes to lift the cap of permits distributed by the city. The cap, which limits the number of permits the city sells to 993, has long been targeted by taxi drivers as an insurmountable barrier for drivers to become owner-operators.

MTS contracts with the city of San Diego, selling permits for $3,000 apiece. Because of high demand, permit holders can resell these permits on an underground market for as much as $130,000.

Hundreds of taxi drivers and sympathizers wore blue shirts to signify their support in lifting the cap, while hundreds of taxi permit holders and their supporters wore red to signify their opposition. For four hours, representatives of both sides shared facts and statistics, anecdotes, opinions and simple messages of goodwill with the council and the opposing group.

Taxi drivers and members of the United Taxi Workers of San Diego (UTWSD) frequently referenced statistics from “Driven to Despair: A Survey of San Diego Taxi Drivers,” a study produced by San Diego State and the Center on Policy Initiatives (CPI).

According to the study, more than 90 percent of licensed taxi drivers do not own the cars they drive, but rather lease their vehicles from individuals or business owners, usually on a weekly basis. Oftentimes, drivers work for more than 12 hours a day and receive an adjusted median income of less than $5 an hour, giving 40 percent of their income to permit owners.

Sarah Saez, policy and program director of UTWSD, alleged that lifting the cap of permits would save each driver an estimated $9,484 and create more opportunity for taxi drivers to become owner-operators. Saez claimed the current system disproportionately affects immigrants, who make up 94 percent of lease drivers.

The near $10,000 each driver would save comes at a crucial time for taxi drivers, Saez argued, who are facing increased competition from ride-sharing companies such as Lyft and Uber. Additional changes considered by the City Council, such as banning the use of taxis older than 10 years and taxis operating with a salvage title, would create a safer and more reliable environment for taxi drivers and their customers.

Opposed to lifting the cap were lease owners and members of the San Diego Transportation Association (SDTA), who argued that many of the facts and statistics used by taxi drivers and UTWSD were biased. Owner-operators, they alleged, make up nearly 60 percent of taxi drivers in San Diego, not the 10 percent quoted by those looking to lift the cap. Lease owners and members of the SDTA also questioned the reliability of “Driven to Despair,” which they contended was performed not by experts, but by students rushed to meet a semester-end deadline.

Many lease owners and members of SDTA also defended the practice of reselling permits on the open market, arguing that all dealings were legal and legitimate and dismissed attacks that the system was a “black market.”

Those opposed to lifting the cap also called for additional economic studies be conducted before the City Council takes action against the cap, citing concerns it could potentially oversaturate San Diego with taxi drivers. Additional concerns were raised about the proposed bans on taxis operating on salvage titles and taxis older than 10 years, suggesting it would create more rules for an industry already beleaguered by overregulation.

After hours of public comment, members of City Council posed questions to City Attorney Jan Goldsmith and deliberated amongst themselves. Before casting their votes, councilmembers addressed the legitimate issues brought by both coalitions. Councilmember Lorie Zapf voiced concerns about taking action before an appropriate number of studies are performed. Others, such as Councilmember Myrtle Cole, pointed to other cities that had lifted the cap of taxi permits and the positive effect it had had on competition. She cited Washington, D.C., which does not have a permit or “medallion” system limiting the number of taxi drivers.

“Several of [my fellow councilmembers and I] were just in D.C., and the fares and qualities of Lyft, Uber, and taxi cabs were comparable,” Cole said. “I would like to see that happen here.”

The vote passed 8 – 1, with all but Zapf voting to lift the cap of lease permits and enact the new taxi regulations. Immediately following the vote, an uproar of applause and cheers of “USA, USA!” erupted from taxi drivers and members of the UTWSD.

Implementation of both the lifted cap and new taxi regulations will take place in 2015.

—Contact Chris Pocock at [email protected].