Charter Reform Working Group
April 15, 2008 at 10:30 a.m.
City Hall,1 Dr. Carlton B. Goodlett Place
Present: Com Heinicke, Com Oka, Autumn O’Keefe, Laurie Graham, Rich Hybels, Hansu Kim,
Tone Lee, Charles Rathbone, Thomas G. Williams, Rich Schlackman, Michelle Allersma, Rick Wilson, Tom Owens, Greg Wagner, Jordanna Thigpen, Adam Millard-Ball, Pres Gillespie
Absent: John Lazar
1. Call to Order/Roll Call : 10:39am/Quorum.
2. Adoption of Minutes from the March 20, 2008 Meeting: Adopted without objection.
3. Review and Report on Financial Viability of Peak Time Medallions [DISCUSSION AND POSSIBLE ACTION ITEM]
- Com Heinicke: The consensus that was reached by this committee, there were still service needs unmet and I thought of peak time medallions. Peak-Time medallions; whether it would work financially. Would the proposal or some modified version work financially; bid on it/use it to operate. Single driver permit opposed to peak-time medallions; also the proposal of using spare cabs for peak-time use.
- Dir Thigpen: Meeting with working group members and the public at Luxor Cab we talked about the financials that go into running the cab business. Overview of "finances and issues".
- Adam Millard-Ball: Clarification, is that an average of a whole week?
- Com Heinicke: 56 hours a week would be the proposal of hours I put forward.
- DirThigpen: Overview of two possible models; 1. peak-time permits awarded to drivers 2. Peak-time permits issued to companies. Some of the issues are outlined here.
- Thomas G. Williams: I remember that we said $25-30 is including tips.
- Dir Thigpen: I talked to Charles Rathbone and he clarified that.
- Com Heinicke: You think these numbers are 20% high?
- Thomas G. Williams: Yes.
- Com Heinicke: The weekly, monthly and yearly income of the driver; he says that the tips are included in the $25 hour.
- Charles Rathbone: I agree with the end of Thomas’s statement saying that these numbers are rich. Twenty dollars per hour is a little more realistic.
- Rich Hybels: As a co-owner, the revenue will only come to $2200 a month.
- Com Heinicke: If it’s a situation where someone has leased the permit to a company, the real revenue that counts is the gate charge. What is the current gate for Friday or Saturday night?
- Pres Gillespie: It went to $137.50.
- Charles Rathbone: $135.00 at Luxor.
- Pres Gillespie: Yellow raised Friday and Saturday night.
- Com Heinicke: What type of shift?
- Pres Gillespie: 10 hour shift.
- Com Heinicke: The model in the industry is that the permit is held by a capitalized company in the industry.
- Thomas G. Williams: 56 hours a week is impossible in 5 days, on a10 hour max.
- Dir Thigpen: This is the hours we had to work with in this framework
- Com Heinicke: A gate within our parameters could be constructed to make this profitable. The gross revenue is going to exceed the cost, so it looks financially viable.
- Rich Hybels: Not if I’m buying the cab, no.
- Carl Macmurdo: The numbers are not realistic and it’s difficult to make money.
- MarkGruberg: I don’t think the numbers are that far off? The additional 20% that was added was not justified. It would be appropriate to test out these models. Ten cabs as single drivers and ten cabs on set hours just to see what the issues are. The problem’s with the spare cabs is not having them for the reason we should have them.
- Tariq Mehmood: 56 hours; 2pm-11pm Tuesday, There is not a single peak time going on. At 4:30pm it starts picking up. No peak-time on Tuesday, some on Wednesday, Thursday and Friday it picks up.
- Com Heinicke: Are all of the Medallions used on Tuesday?
- Rich Hybels: All medallions are driven on Tuesday. We try to give guys good days along with the bad ones.
- Charles Rathbone: I would phrase that to say it’s important for the cab driver to get full utilization. I think you might want to say on a busy day to have it out on two shifts and on a slow day, no shifts.
- Pres Gillespie: I would look at the nights that big companies have a large volume of drivers. It’s always Friday and Saturday. You have to have some spares to cover vehicles that are not in service. You have to determine what number of spares is available.
- Rich Schlackman: The reason for this is because the consumer doesn’t get served. I agree with Tariq somewhat. I think we should consider moving those hours and giving a special gate to make the numbers more attractive. I would want to see a pilot, one with spares one without. The alternative to this is putting more cabs out.
- Tone Lee: I been driving a cab 18 years and Tariq has only been driving for 6 years. He doesn’t know how busy conventions are on Tuesday and Wed. The problem is this is designed for drivers and how much money they can make. Its about job security, it’s a job opportunity for drivers. A lot of drivers are waiting for a shift and I say no to the numbers on the report.
- Com Heinicke: Do you think peak-time permits are financially viable?
- Tone Lee: Spares are for spares only that’s why it’s called spare cab. If the cab owner doesn’t want to take it cab drivers will.
- Com Heinicke: For the record my original proposal was for both models.
- Charles Rathbone: There is nothing in here for permit and fee or auction premiums.
- Com Heinicke: Auction premium could be zero.
- Charles Rathbone: Net income of $25.00 per hour and using that as starting point ends up with a $51,000.00 net. You will definitely find takers for driver who can make that income. Is it good public policy to ask a blue collar to invest $30k to make $17 bucks an hour? I see $20-$22 hour plus tips and it comes up to $11.72 an hour less tips.
- Com Heinicke: Your model is assuming the driver purchased the permit.
- Charles Rathbone: It would work and you would find takers but it does not mean it will be financially viable. Again without going through the detailed math, I come up with a number of about $2300 a month to keep one peak-time vehicle on the streets. A 20% return on the profit. I think it could be made to work as a company operated permit, if the company has 29-30 shifts a month to operate.
- Com Heinicke: You get 30 shifts and that creates an enforcement issue.
- Charles Rathbone: Using a transponder log to see when vehicles leave and come into the lot. Shift variability by year?
- Charles Rathbone: 30 shifts a month.
- Adam Millard-Ball: We need to do this as a pilot first. I think we should test it out both ways, with spares. I also think that we should try out both models to see what happens. We wouldn’t know if it’s feasible if we don’t try.
- Com Heinicke: The key to pilot program for peak-time would have to be valid for a length a time.
- Dir Thigpen: (Gives an overview of what spares are and how a spares work.) Spares essentially are to be used in the event of a regular medallion breaking down.
- Tom Owen: A permit is issued to a specific vehicle.
- Dir Thigpen: The medallion comes out of the regular cab and goes into the spare. There are some companies that put spares out regularly without a medallion and the company makes money off of it. If a spare being driven regularly we can see it during inspection at GTU. (Reads rule.)
- Com Heinicke: Are there standards that GTU enforces?
- Dir Thigpen: They do enforce the standards, but people switch decals.
- Com Heinicke: Essentially, the spare fleets assuming all medallions are in operation; around 300 cabs, assuming that the fleets are healthy.
- Com Heinicke: How many spares are used on Friday/Saturday night?
- Charles Rathbone: Most days we use most of the spares; 3 quarters of them.
- Rich Hybels: I don’t use them quite that much. Allowing us to have more spares would be better.
- Com Henicke: Spares are not alternative vehicles.
- Thomas G. Williams: We need spares as spares. If we want peak time we should by vehicles for them.
- Com Heinicke: What is the concern if we allow spares out as peak-time opposed to new peak-time permits? Drivers will be using these old vehicles opposed to new.
- Thomas G. Williams: Drivers concern, Friday night car breaks down and spare is not available because it’s out for a peak-time permit.
- Rich Hybels: Insurance is not giving you a part time deal but you can buy a policy and compensation.
- Adam Millard-Ball: The biggest line item is purchase and financing. What proportion of cabs become spares after 3 years. Flexibility is important. If we can have a transponder that’s feasible.
- Com Heinicke: What if we went to a 30 shift a month? Would you be able to list the shifts in advance?
- Charles Rathbone: You can come up with a typical week.
- Com Heinicke: The reason why I like a set schedule is because it made enforcement very easy. If you want a little more flexibility you can advance notice what your shifts are.
- Charles Rathbone: I would say more scheduling on a weekly basis.
- Rich Schlackman: My problem with 30 hours is that it’s not consumer driven its driver driven.
- Com Heinicke: These cars can be driven by non-medallion holders. I don’t think there will be a shortage of drivers for Friday/Saturday.
- Rich Schackman: I am concerned about Wednesday and Thursday issues.
- Com Heinicke: Hypothetical fleet week, peak-time cabs going out on Tuesday at 2 and on Sunday.
- Rich Schlackman: I’m for deregulating this.
- RichHybels: We already have transponders, you just have to buy the readers. When you go to the airport they can tell what cab it is.
- Dir Thigpen: In this regard the enforcement is to protect the rest of the drivers that are out there from losing income.
- Autumn O’Keefe: Do all taxis have transponders in them?
- DirThigpen: Yes, and when they come in and out it will show certain times a particular cab has been out.
- Thomas G. Williams: Consumers will become MTA’s responsibility which means a third model should go into affect. MTA color scheme should hire the drivers.
- Tone Lee: There is always one cab out of service and using one spare. Anytime they are going to break down you have to repair it right away. Spares are not good.
- Autumn O’Keefe: Talk a little bit more about customer service.
- Com Heinicke: What I'm hearing first and foremost a real sense of the group there are some plausible solutions out there for the peak-time need and that these can work financially. The best thing is to have pilot programs to see if they work. Start with my initial peak-time proposal with a little more flexibility. The use of current and properly licenses and safe spares. At our next meeting I will draw up a pilot program with a far less fearsome number of cabs, with flexibility to bring back to this group a small scale pilot program 25-30 peak-time cabs. Run those out over time. Peak-time permits would be good for a 5-6 year run to make it viable for someone to run it. I will write a shorter proposal.
- Rich Schlackman: I urge you to add in the issue of lower gates and non auctions.
- Com Heinicke: I think there would have to be some kind of gate control.
- Rich Schlackman: Making it more viable for the consumer is my only concern.
- Rich Hybels: I’m not going to get GPS anytime soon so that eliminates everyone except Luxor and Yellow, I’m on citywide dispatch.
- Thomas G. Williams: It’s not a pilot program for the consumer. It’s a pilot to see if it works for the industry.
- Tone Lee: We have a lot of drivers waiting for the night shift.
- Pres Gillespie: State law maximum is 10 hours.
- Laurie Graham: 10 or less if you pencil in breaks etc.
- Rich Hybels: My drivers have the vehicle available for 12 hours but you’re never driving that total amount.
- Tone Lee: California State law is 10 hours. They don’t say anything about breaks. A lot of drivers do double shifts.
- Com Heinicke: Single driver permits, Adam are you okay with that?
- Adam Millard-Ball: I would still love to see this apart of the pilot. I think the key advantage is enforcement.
- Rich Schlackman: Supervisor Peskin said contradictory things so we shouldn’t take his notion.
- Com Heinicke: I will consider a three pilot program.
4. Service Related Improvements to the Industry Including Peak Time Medallions [DISCUSSION AND POSSIBLE ACTION ITEM]
- Com Heinicke: Gillespie give your overview of dispatch.
- Pres Gillespie: Minimum size for dispatch for Ramp and Regular dispatch companies? Through our surveys we found quality of response times. In a short a centralized dispatched, is ten too many or is one too few? The proposal on the table is whether to have a minimum size for dispatch companies. No restriction on where a company can go as long as it’s a licensed dispatch. Resolution right now we would like to get; 5 for ramp and 50-75-100 for reg. If we had 100 we would eliminate 2 or 3 of the dispatch companies.
- Com Henicike: That is the first of three components of dispatch reform. GPS requirement was on proposed for peak-time permits. Three things I proposed; 1) fleet size requirement should be 100 for regular, 49 square mile to cover dispatch fewer than 10 cabs would not be able to serve the public 2) Once the fleet size requirement is in, we would be down to 6-7 dispatch services and they are linked to 311 which is consumer friendly 3) I proposed a rule that would allow the cab companies to charge a premium for dispatch pick up during peak times.
- Barry Taranto: Not every driver is trained to use radios. I think it’s important to start getting drivers to take dispatch orders than flags on the streets. Large companies have a number of no goes. You get discouraged and it’s not economical to go 2 miles to a dispatch order to find they are going a less distance than you traveled to go get them.
- Tariq Mehmood: A lot of people are unaware how dispatch is used at yellow cab.
- Mark Gruberg: I just think there is a lot of misunderstanding about central dispatching. We like to use the term integrated dispatch. That same 311 system as for randomized distribution of calls.
- Com Heninicke: That concept I’m not opposed to. I think it’s a solution that may be a few years off and would be advanced but we are not at that square yet. I think the proponents of centralized dispatch are not 311. 311 is fantastic.
- Rich Schlackman: If technology works with 311 then go with it.
- Dir Thigpen: We did discuss this in the group. Whose clock is going to be right for dispatch premiums?
- Com Heinicke: It’s the company’s problem and they can build there own premium program. The idea is that the MTA or TXC can question it when the program comes in. The only sort of leg system as part of this proposal is geographic scope or temporally.
- Rich Schlackman: To me, paying an extra $5 for a for sure cab is fine. I am for geography.
- Com Heinicke: The taxi industry is apart of the transportation industry.
- Adam Millard-Ball: 311 is a great idea. But can get some data on time quality from 311? Dispatch premiums, I can see problems in general.
- Laurie Graham: Hopefully that will draw drivers out to the districts.
- Autumn O’Keefe: As a member of public I would support seeing some sort of premium service. I've been outside of the area and was unable to get a taxi. I think this is a very key area for the taxi industry to focus on. As the public there are a couple of barriers, lack of taxi and cost of taxi is relatively expensive so take very seriously service and dispatch.
- Pres Gillespie: Surcharge for all radio calls; takes more to take a dispatch call. $2 dollar surcharge.
- Hansu Kim: Proven to have better service towards neighborhoods. Make sure you give someone an option to flag a cab in outer areas. We want this incentive to improve service, plus we need to have better taxi stands.
- Laurie Graham: I think it should be a flat amount and there should be no restrictions.
- Thomas G. Williams: I agree on flat fee, $5 dollars is not a lot.
- Tone Lee: I would like to get more radio calls. If we charge by time and location there is a lot of disputes. Taxi Commission should promote the voucher system.
5. Public Comment (Please limit public comment to items NOT on the agenda)
- Carl Macurdo: This is a Charter Reform Group; policy reform is what we are doing.
- Tariq Mehmood: You are no longer a commissioner, your apart of MTA. You are destroying their plan of brining the taxi industry into it.
- Barry Taranto: I think it’s important that public members in this committee are looking for improved service. The public hears what’s going on and they need to know how the cab driver does their job.
- Rich Hybels: No insurance or workers compensation would insure a peak-time cab.
6. Adjournment, 12:37pm.
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