Are San Diego Taxi Drivers Driven to Despair?

By Doug Porter / San Diego Free Press

A survey released yesterday leaves little room for doubt that conditions in the local taxi industry pose a very real threat to the safety of passengers, drivers and the general public in San Diego.

Conducted over a two month period by San Diego State University and the Center for Policy Initiatives (CPI), the study interviewed 331 local cab drivers, asking about earnings, expenses, hours, health care, vehicle safety and industry practices.

What emerges from the data is a picture of nearly serf-like conditions, where workers are obliged to perform in unsafe vehicles for long stretches of time with low pay under an ever-present threat of being blackballed should they dare to complain about conditions.

Key findings in the report include:

• Nearly 90% of licensed drivers work as “independent contractors”, leasing their vehicles at exorbitant rates that necessitate working a 70+ hour work week to earn what a minimum wage worker makes in 40 hours.
• Drivers are denied protections normally accorded independent contractors, are rarely covered by insurance for accident related injuries and lack job-related health coverage or workers’ compensation insurance.
• The current permitting/leasing system encourages taxi drivers to drive when tired or sick, and allows lax vehicle maintenance, putting public health and safety at risk.
• Current policies allow City permits to be re-sold on the open market without regulation, for tens of thousands of dollars more than their purchase price. As a result, drivers pay high lease prices and are blocked from becoming owner-operators. A permit purchased for $3000 has a median value of $140,000 in 2013, according to the report.

credit: CPI

Money quote:

Anecdotally, a number of drivers recounted that the owner had taken the keys after they complained about the vehicle or spoke up at public meetings or to authorities – and a few were blacklisted. Some drivers we spoke to have not been able to find work again, while others had difficulty finding a new position.

One driver reported having the keys taken away after he complained that the air conditioner did not work during a particularly busy conference week in the summer. Seeking a new job, he was rejected by another permit holder, who said: “Your boss told me that you’re trouble.

The Sidewalk Incident: Some Very Real Consequences

The long hours required under the present system for cab drivers to make enough money for very basic necessities represent a very real public danger.

A 2am blackout by a driver back in February, 2011 caused injuries to approximately two dozen people as his out of control vehicle drove onto a sidewalk and smashed into a crowd in the Gaslamp district.

The 48-year-old driver, who appeared to be of Arabic descent, was pulled from the cab by the crowd and beaten, suffering a broken nose.

Right-wing bloggers had a field day, claiming that the driver jumped from the cab and attacked people with a pair of scissors. Seizing on the supposition that he was Muslim, they called the incident ‘lone jihadi syndrome’.

The driver was not charged with any wrong-doing following a comprehensive reconstruction of the events surrounding the accident, according to San Diego Police.

The investigation included reviewing a videotape, a complete inspection of the taxicab, crash damage analysis, compiling and reviewing medical records, toxicology tests, numerous interviews of witnesses and an acceleration study and was reviewed by a deputy district attorney prior to the decision not to file charges.

Court records revealed that the driver had two prior crashes and eight citations since 2004. He was reported to have to acquaintances the he was tired on the night of the crash and was taking a new medication.

A Reflection of the Local Political Economy

Bribery investigation of John Alessio started it off.

The release of a report on the sad state of affairs in San Diego’s taxi cab industry yesterday should come as no surprise. The cab business in America’s Finest City has long been a key indicator of the true nature of local politics and its role in the economy.

In 1966, a Los Angeles- based federal organized-crime strike force began investigating police corruption in San Diego, an inquiry that revealed the then-dominant Yellow Cab Company was laundering political donations from bookmakers.

Despite gaining convictions against John and Angelo Alessio, a couple of second tier kingpins, most of the investigation was halted by political appointees after Richard Nixon was elected president.

The then-US Attorney Ed Miller moved over and became District Attorney for San Diego, and Yellow Cab was still on his radar. The fact that the Chief of San Diego’s Police Department got a new car annually courtesy of Yellow Cab made them an obvious target.

Nine former and then-serving politicos, including council members, supervisors, along with the mayor and deputy mayor were indicted for conspiracy and bribery connected to payoffs made to grease the wheels for a rate increase under consideration by Yellow Cab.

One official was eventually convicted of a misdemeanor, but the rest walked off scott-free on the charges, thanks to a decision made by officials in the Nixon administration that prevented investigator David Stutz from testifying in the case.

The days of a monopolistic system for cab companies were drawing to a close. San Diego’s Yellow Cab sold off all its vehicles and re-invented itself as a radio-dispatch service.

So just as the Yellow Cab Company reflected the C. Arnholt Smith/robber-baron era of San Diego’s political economy fifty years ago, today’s cabbies are reflective of an era where sometimes-shady entrepreneurs no longer get their hands dirty with the details of the business. Sub-contracting is the new monopoly when it comes making money with transportation.

The wealth gap between owner and driver has increased as a result. Back in the day, San Diego’s cabbies were unionized. Today, they’re little more than fiefs toiling away in a near-feudal system. Nearly all of today’s cabbies are immigrants, with a large majority coming over from east Africa to escape the brutal civil wars that swept the region back in the closing decades of the twentieth century.

Hope for Change, Maybe?

San Diego’s long-running reign of Republican mayors kept the sins of the taxi industry at arms length by contracting permitting and regulation to the Metropolitan Transit System (MTS). The latest incarnation of this deal expires next month, June 2013. Rather than renewing the five-year MTS contract, the City has decided to extend the contract one year while studying options for reforming the system.

The SDSU/CPI study makes a number of recommendations for short-term reforms. Mayor Filner has indicated that they current arrangement will be ending and changes will be forthcoming. At a minimum, this one simple proposal from the report needs to be implemented:

The City should reform the system so that lease drivers are either afforded the protections of employees or are given ample and realistic opportunities to become owner-operators. Various models exist in other cities to transform the out-of-control permit transfer market, which currently drives high leases and unsafe conditions, into a controlled system that benefits both the City and the majority of taxi drivers.

Ben Hueso

Back in February, then-Assemblyman (and former City Councilman) Ben Hueso introduced legislation (AB 1243) that would automatically classify cab drivers as independent contractors, thus protecting cab owners from claims relating to working conditions, among other things.

Today’s UT-San Diego quotes Tony Hueso in his role as president of the San Diego Taxi Association (a taxi owners group), saying that more rules will hamper service. “Our industry already has to (sic) many regulations, he said.”

Tony Hueso owns USA Cab, one of the largest cab companies in town. USA cab spent 6 years fighting a lawsuit charging that USA Cab treated its drivers as employees while calling them independent contractors, thus avoiding requirements to provide workers compensation insurance, withhold taxes, and pay a minimum wage. The company prevailed at the end of the day, but fears that another suit might be decided differently have cab owners on edge.

Tony Hueso is Ben Hueso’s brother. Assemblyman Hueso is now State Senator Hueso. I doubt that his replacement, Lorena Gonzalez, will continue to push this bill.

 The above is an excerpt from Doug Porter’s The Starting Line.