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SFMTA Taxi Services
Taxi Advisory Council

Monday, July 25, 2011
2nd Floor Atrium Conference Room
One South Van Ness Avenue


PRESENT:     Timothy Lapp, Tara Housman, Tone Lee, Ruach Graffis, John Han, Dan Hinds, Richard Hybels, David Khan, Barry Korengold, John Lazar, Carl Macmurdo, William Minikel, William Mounsey, Athan Rebelos, Chris Sweis,


STAFF IN ATTENDANCE:  Christiane Hayashi Deputy Director Taxi Services

1. Call to order:  Chris Sweis called the meeting to order at 1:07p.m.

2. Roll Call – The Roll Call showed a quorum was present.

3. Announcement of prohibition of sound producing devices during the meeting.

4. Approval of Minutes:  July 11, 2011

Mr. Khan said his name was misspelled on the July 11th minutes.

Public Comment:

Mr. Rathbone said inaudible

Public Comment Closed

Mr. Lazar said that in the vote at the last meeting Mr. Korengold was out of order.  He said that the vote should be rescinded and redone. 

Mr. Sweis said he will look into that and address it at the next meeting.

            Mr. Lazar said that the vote that was taken was a critical vote.  He said he thought it was out of line and out of text he wants to make a motion. 

Mr. Sweis said he did not agree but he asked for a rule of order.

Ms. Hayashi said you file a complaint with the sunshine task force.

Ms. Graffis said that point of order is that anyone who voted in favor of the winning side can ask to revisit the vote.

Ms. Hayashi said that they must put this on the agenda for the next meeting in order to vote for an item.

Mr. Sweis said he would like to revisit that vote and will put it on the agenda when they take agenda items.

Mr. Sweis approved minutes as amended

All approved with the exception of Mr. Lazar who voted not to approve minutes


Public Comment:

Mr.? (Unstated name) asked to be given more time for public comment.

Mr. Sweis said that the meetings go over the amount of time given and will only allow 2 minutes.

Mr. Brad? (Unstated name) said he enjoyed coming to these meetings. 

Mr. Mehmood said that everyone has seen the strike and that the message is that staff here is incompetent and should leave the job.  He said the investigators have been here 3 months and that the illegal limos have still not been removed.  He said the money spent on the investigators these last 3 months is a waste of money.

Mr. Mulik said that the medallion sales program should stop immediately and that any medallions sold should be given to the list of drivers waiting for medallion.  He said that the SFMTA has sold medallions and has not posted current information on the website.

Mr. Hatten said he bought his medallion on December 2010.  He said they just started a new company called Eco-Taxi and wanted to introduce himself. 

Mr. Fulkerson said that it is correct that in Roberts Rule that only the people on the side of the motion that passed can ask to revisit the vote.

Mr. Rathborne said that one of his drivers was involved in helping the police prosecute a man who assaulted a woman.  He said that with the help of the security camera the driver was able to help police.  He said they were very proud of that driver.  Meanwhile it has come to his attention through internet postings that Mr. Korengold routinely disables the security camera in his cab.  He said that this an outrage and that makes him unfit to be on this council.

Mr. Sweis said that he does not want personal comments made.

Mr. Rathbone said that he would like to see anyone disabling security equipment that is made to protect the public severely punished.  He said that right in the middle of the vote last week this person broke the rules of order and that the chair has a conflict of interest on removing that person.  He said staff needs to intervene.

Mr. Healy said that there is an endless round of personal attack made in the business for the last 4-6 months.  He said it’s done on the internet and now here.  He said he urges council to put a stop to this.

Mr. Kim said he wanted to express his opinions.  He said that he is not happy with the past leadership of the SFMTA.  He said that a lot of enormously positive things that have happen.  He said medallion holders have more chances than anywhere else.  He said despite the concerns regarding credit cards, it has been an enormous success for his company.  He said that instead on focusing on issues minor such as this the major issue regarding brokers is not being addressed when it causes such negative impact on the industry.

Public Comment Closed

6. Report of the Council Liaison (Discussion only)

a. Staff Update- C. Hayashi said nothing to report under the item.

b. Regulatory Reform Update

c. Taxi Medallion Sales Pilot Program Update



Credit Card Waiver memorandum (Discussion and possible action)

Mr. Han said that a memo was issued that on July 6, 2010 the board authorized this credit card fee waiver.  He had concerns regarding the fee break down and the misinformation that was given.  He read an email that deputy director Hayashi sent out to undisclosed people.  He said that the memo said that the back seat units would be paid by advertisement revenues.  He said he and the TAC were under the impression that Verifone would collect fees to cover installation from advertisement revenue. 

Mr. Sweis said the companies are receiving revenue from advertisement and processing fees.  He asked Mr. Han what the difference was.

Mr. Han said the CFO Sonali Bose memo dated May 6, 2011 she breaks down the 5% fee for the board.  He said he proposes to cap the fee at 3% and remove PIMs from the waiver requirement.  He said he is also concerned that this was approved in June 2010 before the TAC was formed.

Mr. Khan said that there has never been any discussion on the credit card fees in this meeting. He said he was under the impression that the ad revenue would cover any fees to install and run the back seat units.

Mr. Mounsey said that he is probably the only one in this room that was audited.  He said the IRS will require you to show way bills.  He said he feels all of this is an invasion of privacy.  

Mr. Rebelos said that the 5% fee is reasonable and that the driver and consumer benefit from the use of credit cards.

Mr. Lazar talked about various percentage fees on credit card and charges. He said at Luxor they have CMT machines and drivers are begging them to driver the cabs with the machines installed.  He said he has a list of people that want to driver the cabs with this system.  He said the customers like them better than the square system. 

Mr. Han said that there have been 4 protests on not wanting the back units and having strong opposition to the 5%.  He said this needs to be carefully looked at.

            Mr. Korengold said he suggested the fee be lowered also to 3.5%.  He said he has used the square for 2.75%.  He said everyone likes the square.  He said everyone that he has talked does not like the backseat units.  He said he doesn’t think the driver should be paying for the backseat units. 

Mr. Lazar said that the privacy is an issue when the passenger gives the driver the credit card.  He said the fee is covering the communications between the credit card companies, banks and units.  

Mr. Lapp said his tips have increased with the back units.  He said people are hitting the 20% button and increase his tips everyday by at least 20 dollars.  He said he has heard nothing but good things from drivers increase in tips and passengers enjoying the privacy with the backseat units.

Ms. Graffis said that the Square unit does not take the whole credit card number.  She said the front unit is much more preferred than the back seat.  She said the only thing the back seat unit is providing is advertisement money to the companies.

Mr. Rebelos said that when you figure the 2.5% on square you need to account for the airtime and rate plan you pay for that phone.  He said that when you are talking about the fees you need to account for all.  He said his company has to train drivers, maintain machines and pay for airtime.  He said this is an infrastructure that is constantly maintained. 

Mr. Hybels said that his guys are very happy not to be paying 10% anymore.  He said that at some point the square issue may cause problems in the long run.

Mr. Mounsey said the idea of more money you are making in tips is just being used to pay the 5% fee.  He said it shouldn’t be mandatory to accept credit cards.

Mr. Hinds said he disagree, extremely important that they should have the capability to accept credit cards. He said it’s important to remain competitive.  He said at National the 5% goes to the vender.  He said he would like to talk to the venders to help reduce that cost if possible. 

Mr. Khan said he has never had a problem about using “square”.

Mr. Korengold asked whether it cost the same to run the credit card in the front as opposed to the back seat unit.  He also doesn’t believe that the square units steal people’s credit card numbers.   

Mr. Rebellos said back seat terminal allows the customer to never let go of their credit card.  He said because the back seat units are not mandatory he doesn’t understand what the argument here today is.  He said everyone is paying a credit card fee.  He said the minimum credit card fee we are talking about is 2.75% so the argument here is a difference of 1.25%.  He said the typical cab driver this number represents 5 or 6 bucks a week at best.

Mr. McMurdo he said that all of the other cities have been passing the charge on to the driver.  He said that staff should consider drafting transportation code amendments to give the color schemes second option of no back seat unit at a lower percentage fee. 

Ms. Houseman said the Verifone backseat units have too many steps.  She said she winds up blocking traffic because of it.  She says she understands why it’s unpopular.  She said she gets better tips from airport rides and not so good on short runs.

Mr. Minikel said that the increase in tips is just a belief not a fact.  He said that credit cards are not convenient to drivers they are convenient for the passenger.  He said it doesn’t make sense that they cannot pass the cost on to the user.

Mr. Han said he rejects the idea that a cab driver can photograph your credit card like a waiter could.  He said his experience with passengers is that they don’t mind giving him their credit cards.  He said that he has surveyed other businesses that pay less a lot less than 5%. 

Mr. Hybels asked why the cost couldn't be passed on to the customer.

Mr. Rebelos said that if there was no PIM in the car it would not be cheaper it’s the same processing fee and airtime. 

Mr. Mounsey said that all the company people agree with the backseat units yet all drivers don’t want them. 

Mr. Khan asked why they need the backseat terminals. 

Ms. Graffis said she doesn’t care to hear the companies complain about fees when they received two gate fees in the last 8 years.

Public Comment:

Mr. Mehmood said he doesn’t know why the cab companies have the option to put the backseat units in or not it should be the driver.  He said drivers have been fired from taxi cab companies for refusing credit cards.

Ms. Marai said she has never turned down credit cards.  She said she has had to pay on average $170 worth of fees.  She also said that she is not happy being ripped off by the 5% fee when some cab drivers are not taking credit cards and passing these customers on to her.

Mr. Gruberg said that it’s inevitable that the cab drivers are not going to all accept to pay the 5 % fee.  He said it causes an inconvenience to the passenger when cab drivers refuse to take credit cards. 

Mr. Mulik said that the VeriFone technology is great but still feels the driver should not pay the 5%fee.

Mr. Faulkerson said that if taxi cab drivers are independent contractors they should be treated that way and not have the companies pick and choose when they are contractors.  He said it is completely absurd that the cab drivers are paying a fee for a service that they do not control and do not make advertisement profit from.

Mr. Rathbone said his company does not support the 5% being passed on to the driver.  He said now that equipment has been installed and contracts signed it’s too late to argue the agreement.  He said that a public service message should be in place to advise customers if driver does not take credit card you do not have to pay.

Ms. Murai said she is taking passengers that other drivers don’t take because they don’t want to pay the credit card fee.  She does not want the backseat units and hopes companies do not install them and then lower credit card fee to 3%.

Mr. Healy said there should be some negotiation that he does think is going on.  He said there would be all kinds of money he would miss if he did not accept credit cards. 

Mr. Kim said that some folks here talking negative about back seat units have never even used a back seat unit.  He said he wanted to clarify that he makes zero money on the 5% fee.  He said he does save money on those fees and his drivers love the tip proctor on the backseat units.  He said before everyone is wary on this technology when it makes drivers more money.

(Mr. Hahn questioned and discuss detail with Mr. Kim to explained what 5% fee consisted of)

Mr. Sung Felt 5% is not a problem and feels it’s too much time spent on this issue over a difference in 3.5% to 5%.  He says he doesn’t understand what the argument is.  He said if drivers accept credit cards it limits the amount of cash in hand which then is safer for the driver not to get robbed.

Public Comment closed

Mr. Macmurdo asked how much advertisement revenue.  He asked if SFMTA is receiving money from these revenues.

Mr. Han said that even though Mr. Kim said there is no difference between the backseat unit and front he said there is.  He said the backseat unit has a bright light glare and gives the driver less control. 

Mr. Lazar said that when this whole percent fee came up they asked for a gate increase.  He also said there has not been a meter increase in 8 years.  He said that the SFMTA had to scramble for money and forgot about the cab drivers in the process.  He said while cost of living has gone up he has not seen cab drivers get a pay increase. 

Mr. Rebelos said that the cost from the processor may be higher if you get rid of the back seat unit.  He said he feels this argument is a waste of time because 3.5-5% is really not worth the time.

Mr. Khan wants to motion cab companies not to charged cab drivers 5% fee instead charge nothing.

NO Second

Mr. Han wants to motion to recommend to remove rear seat passenger information monitors from credit card fee waiver and reduce the percentage that can be passed on to driver.

Mr. Korengold seconded.

(Inaudible, Audio technical difficulties) below is the summary of the motions that took place after audio was lost.

Motion to recommend the removal of PIM devices from the credit card waiver and reduce the fee passed on to drivers to 3.5%.

Ayes:  T. Lee, J. Han, B. Korengold, W. Minikel, W. Mounsey

Nayes: T. Housman, T. Lapp, D. Hinds, D. Khan, J. Lazar, C. Macmurdo, A. Rebelos, C. Sweis, R. Graffis,

Abstain: R. Hybels

Motion Failed

Motion to recommend that all cab companies pass credit card fees on to drivers must have signage prominently displayed informing the passenger that credit cards are accepted and that the driver is paying processing fees.

Ayes: T. Housman, T. Lee, J. Han, B. Korengold

Nayes: R. Hybels, T. Lapp, D. Hinds, D. Khan, J. Lazar, C. Macmurdo, W. Minikel, W. Mounsey, A. Rebelos, C. Sweis, R. Graffis

Motion Failed

On the motion to recommend that drivers should not be charged for any non-cash payment processing and the pilot program for non-cash payment be discontinued.

Ayes: T. Housman, T. Lee, J. Han, K. Khan, B. Korengold, W. Minikel, W. Mounsey, R. Graffis

Nayes: R. Hybels, T. Lapp, D. Hinds, J. Lazar, C. Macmurdo, A. Rebelos, C. Sweis

Motion Passed


Mr. Taranto said Board of Supervisors introduced a resolution that drivers shouldn’t pay the fee. Prove that drivers make more money with credit cards. Drivers want give good service when they’re making money.

Mr. Gruberg said Green Cab is absorbing to charges between 3.5% -3.75%. Some additional administration like chargebacks, and said the cost to companies is not that great.

Mr. Rebelos asked Mr. Gruber a question “you use to volunteer staff to administrative work”? He said the company should be the primary to pay.


Council Members requests for information [Discussion only]

• Enforcement information from Erik and Charles

• Permit fee increases before and after SFMTA

• Mr. Lazar asked what the rule is regarding tampering with security cameras.

9. Schedule upcoming calendar items [Discussion and Action]

Mr. Han suggested Security Cameras

Mr. Hybels said whether all cabs should have video cameras

Mr. Lapp said broker’s enforcement

Mr. Sweis said Recommendation on how to eliminate medallion brokers and how to enforce them will be on the next agenda as item 7.

ADJOURNMENT:  The meeting was adjourned by standing vote at 4:45 p.m.


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