Saturday, January 22, 2011

A Message From The San Francisco Cab Drivers' Association (SFCDA)... Impact of the Medallion Sales Pilot Program on Drivers.

By Barry Korengold, President of the SFCDA

At this Monday's Taxi Advisory Council meeting (January 24th), we'll be continuing discussion on the effects the Pilot Program has had on drivers on and off the list.  It will be a continuation of last weeks discussion, where I presented a report enumerating some of the negative effects the pilot program has had on those at the top of the list.  I'm aware that for many, the pilot program has given them the opportunity to buy a medallion, which they otherwise would have had to wait several years for, but it's also meant that many who have already waited 10 or 15 years, will either not get one at all, or have to wait several additional years.

Most qualified drivers at the top of the list have already put in at least 15 to 20 years behind the wheel of a cab, and have at some time or another been robbed, assaulted, crashed into by negligent drivers, driven to their wits end, worn their backs out and more, yet many proponents of total transferability still like to say these drivers are receiving a "free" medallion if they don't purchase it and give close to half the money to the city and the banks.

This new system is devaluating the medallions.  Even if the new owners will be able to eventually sell them and have equity, they will have less than if they were to have put that same money into a savings account!

If you're high on the list, and feel you're now having to wait longer for your medallion, or being unduly pressured to purchase one, it's important for you to show up at this Monday's TAC meeting and share your feelings.  The TAC will be making recommendations soon for a more permanent solution and we need to hear from those who would be affected negatively by a total transferability system.

There will likely be drivers who'll say how happy they are to have been able to jump the line by paying the fee.  I'm sure if they allowed drivers in the third lot at the airport to pay $10 to go to the head of the line, they'd be happy too.  The drivers in the first lot might not be so happy however.

The following is a report presented by SFCDA at the last Taxi Advisory Council meeting held January 10, 2011.

Presented by Barry Korengold 

Pilot Program Effects on Drivers 
Nearly a year after its launching, many effects of the Pilot Program can still only be estimated. However, it has so far shown to affect drivers on and off the list in various ways. I have broken these down into categories. 
  1. Those affected before the Pilot Program. 
  2. Those affected currently. 
  3. Those who will be affected in the future at this rate. 

Pre-Pilot Program Effects: 
Even before the Pilot Program was put into place, drivers on the waiting list were affected by having to wait longer for their medallions. Many medallions were not issued due to lack of sufficient staffing at SFMTA and in anticipation of a Pilot Program. Staffing seemed to be held back until the Pilot Program started producing revenue, thus slowing the process even more. 

From the figures supplied by the SFMTA, I have calculated the average loss of income to the 18 drivers who were issued their medallions before February 26, 2010 due to the delay in their issuance. 

I made my calculations starting July 1st of 2009, allowing time for the transition into the SFMTA. I also figured a natural 3 month delay from when a medallion was returned to the SFMTA and when it should normally be re-issued. At $2,000 a month, each of these drivers averaged a loss of $12,555 due to the extra wait for their medallions. The average extra wait was about 6 months. 

Current Effects: 

Drivers on the list have been affected by the extreme atmosphere of uncertainty created by the Pilot Program. There is immense pressure for some to buy, or be left with nothing after waiting years and making their career driving a cab. Many older drivers could have chosen another profession and cannot afford to purchase a medallion or change careers at this late stage in their lives. 

Many non-transferable medallions have not been issued due to lack of staffing and preference to those buying medallions. The average number of medallions issued to those at the top of the list each year since 2001 is 52.8. 

In 2010, 20 non-transferable medallions were issued to those at the top of the list and 10 were sold outright by the SFMTA, these medallions would have otherwise gone to the next 10 qualified drivers on the list. It is hard to calculate how much income is lost by these drivers, but you can figure at least $2,000 a month, or $24,000 a year until they receive their medallions. 

The 19 medallion holders who received their medallions after the Pilot Program began, experienced average delays of 11 months, or an average loss of $21,895. For such low income workers, this has an enormous effect on their quality of life. 

The Pilot Program has affected drivers on and off the list also, because most new medallion holders who have purchased their medallions have chosen to operate them as owner operator or “affiliate” medallions, leaving far less shifts available for gate and gas drivers. Currently, these figures aren’t available.  

But according to company managers and drivers, this is a very significant change. Some drivers have had to switch companies and cannot work their same shifts or enough of them. 

Long Term Effects: 

As older medallion holders sell their medallions, there will be less medallions going to the list because less medallion holders will have their medallions when they die. Those near the top of the list, who’ve generally been driving the longest, will have to wait even longer for their medallion, and have less time to enjoy it, IF they ever get one.

If this system continues unaltered, it will not take long until no more medallions will go to those on the list without being purchased. Older, career cabdrivers will not have the time or money to pay off the loan, and almost certainly won’t have $250,000 in cash.

Most cabdrivers lead a fairly day to day life financially, particularly without a medallion. It is especially stressful for older drivers who have been working and waiting for what could be compared in other occupations to tenure, or a management position late in their career, to have this taken away. The disappointment will have a devastating effect on many drivers who have spent most of their lives and ruined their health driving a cab. 

On a positive note, the Drivers Fund will likely provide some real assistance in one way or another for drivers without medallions. 


*There needs to be a cap on the number of transferable medallions so that longtime career drivers can still earn their medallions through time on the road. As most current medallion holders have. 

*The new streamlined process for issuing medallions is very welcomed and should be used as eagerly with non-transferable medallions as transferable ones. 

*Revenue from medallions that are delayed in being issued because of the SFMTA should go to the new medallion holder, minus operating costs. 

*Ways should be developed to prevent gate and gas drivers from losing their shifts to affiliate/owner operator and long term lease drivers. The down payment assistance rule is good, and I suggest a 2 year gate and gas requirement before allowing a driver to work for an affiliate or long term lease driver. 

*A more permanent solution needs to be decided so that drivers can make informed career decisions, rather than blindly guessing their future opportunities. 

*There needs to be greater communication between drivers and the SFMTA. A lot of the angst could be alleviated with better understanding by both parties. I suggest more Town Hall meetings that are well announced. 

Pilot Program Effects on Drivers Taxi Advisory Report, Updated 1/24/11.  Barry Korengold 

Medallions Issued
Top of the Waiting List
Sold by MTA

Calculations  (Lost income to drivers at top of list) 

Number of Pre-Pilot Program medallions: 18 
(July ’09 – Feb. ’09) 

Total months delayed: 113 

Current minimum monthly medallion income: $2,000 

Total minimum lost income to drivers: 113 x $2,000 = $226,000 

Average minimum lost income per driver: $226,000 ÷ 18 = $12,555 

Number of Pilot Program medallions: 19 

(Issued 10/19/10) 

Total Months delayed: 208 

Total minimum lost income to drivers: 208 x $2,000 = $461,000 

Average lost income per driver: $461,000 ÷ 19 = $21,895 

Number of currently un-issued medallions 22 

Total delayed months 169 

Average delayed months per medallion 7.7 

Total minimum lost income: 169 x $2,000 = $338,000 

Average loss per driver: $338,000 ÷ 22 = $15,364
Medallion #
Date Returned
Date Granted
Returned 9/30/08
Returned 9/30/08
Returned 10/6/08
Returned 10/10/08
Returned 12/15/08
Returned 12/15/08
Returned 12/29/08
Returned 1/27/09
Returned 2/4/09
Returned 2/3/09
Returned 2/3/09
Returned 2/4/09
Returned 2/10/09
Returned 2/12/09
Returned 3/13/09
Returned 8/21/08
Returned 8/21/08
Returned 9/11/08
Returned 3/24/09
Returned 4/15/09
Returned 4/15/09
Returned 4/15/09
Returned 4/15/09
Returned 4/15/09
Returned 5/4/09
Returned 4/29/09
Returned 5/6/09
Returned 4/29/09
Returned 5/7/09
Returned 5/15/09
Returned 5/18/09
Returning 6/17/09
Returned 6/18/09
Returned 8/18/09
Returned 3/13/09
Returned 9/8/09
Returned 6/14/10

Barry Korengold


  1. Hi Barry,

    While I'm generally in favor of your recommendations, I find your article extremely biased and your use of statistics meaningless.

    But first, you make it sound as if the Pilot Plan is responsible for people on the list not getting medallions. It's actually the other way around. The list would longer exist without the Pilot Plan. Without it you'd have a Heinicke or a Spain plan where medallions would be auctioned off and no one got one for free.

    And, while your long term concerns are valid, your use of statistic is off the wall.

    Your use of the cabs put out every years since 2001 is misleading. You forget that in 2000, there were only 1,100 medallions on the street - meaning that most of the medallions (400) put on the street during the last decade were new issues.

    From 2001 to 2009, in other words, there were only something on the order of 77 medallions re-circulated. This would average out to 8.5 medallions per year, making the MTA figure of 20 look very good.

    In other words, to this point it doesn't appear that the Pilot Plan has slowed down the list at all.

    Ed Healy

  2. As you have already noted the new med. holders only want color scheme affiliation. Of course they need drivers but they almost always select friends and relatives.
    Medallions operated under "color scheme" arrangements are very rarely following rules related to shift change, parking on co. property and 10 hours limits on driving.
    Not high crimes but those rules are not being enforced.
    All of this makes is making cab companies less and less viable.
    Richard Hybels

  3. Ed,

    You're right, the report is biased in that it looks at how drivers at the top of the list have been affected. All other reports have been biased toward the drivers further down the list who are now all supposedly given the opportunity to buy a medallion (not so) and build equity, or toward the medallion holders who are now able to sell their medallions.

    You're figuring doesn't quite make sense either because if you don't want to count newly issued medallions, you can only NOT count them in the year they're issued. After that, they're re-issued medallions. Do your calculations again with this in mind and your conclusions won't be much different.

    I'm also comparing the Pilot Program to what we had before, not what we MIGHT have had if a "Heinicke or Spain" plan had been implemented, as they weren't. It is not the role of an SFMTA Board member to design or interfere with administrative procedures, nor is it within the purview of a single driver or multiple medallion holder. That would have been a very biased report also.

    Barry Korengold

  4. I don't think this is biased. It simply zeros in on a particular area of the issue... and an important one.

    But if it were to be biased, it would be no more biased than trying to highlight the benefits of a transferable medallions system, without equally documenting the negative impacts it would have on others. That is what this article does. It's trying to give recognition to people who so far have not benefitted from the program, but have arguably been financially injured by it.

    Additionally, I don't think the Medallion Sales Pilot Program has saved the waiting list. I think industry backlash did that... remember drivers driving taxis around City Hall honking horns with TV news cameras watching?

    Rather, I think the Medallion Sales Pilot Program was purposefully designed and structured around the need to retain the waiting list because SFMTA got the clear and strong message that there would be resistant upheaval if it simply eliminated the list.


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