San Francisco's "Sweatshops on Wheels"

Taxi companies to begin long term leases

Photo(s) by Luke Thomas

By John Han

June 28, 2007

On July 1st, the two largest taxi companies in San Francisco are expected to begin a trend of long-term lease agreements for their drivers. Yellow Cab and Luxor will require drivers to lease a cab for a minimum of a year as mandatory policy. During this period, drivers are expected to prepay for their shifts. They would be required to pay a first month's lease and a security deposit in advance which could total as much as $7,000, more than what most drivers can afford.

"Sweatshops on wheels" is what Tom Williams, chair of the United Taxi Workers (UTW) called it."

"With every driver that they find who pays them three or seven thousand dollars, or whatever it is, they take that, and for that shift they kick somebody out. So it's the very slow process over maybe a year even before they have the whole fleet converted," Williams added.

Currently, most drivers lease taxis by the day. A lease, known as a "gate fee" costs $91.50 per shift. Drivers pay the fee at the end of every shift.

Mark Gruberg, president of the UTW says the new leases aren't going according to the companies' expectations.

"The politicians are aware of it and there's possible more regulations coming down the road... they have some worries," Gruberg said.

Supervisor Tom Ammiano's resolution, backed by Chris Daly, was brought to the board on June 12 urging taxi companies not to increase long-term leases.

The changes are said to be a result of a proposed healthcare plan that taxi companies would be required to provide for all of their drivers. It's estimated the plan would cost companies about four million dollars per year. But according to the UTW, cab companies have also been overcharging their drivers as well.

In 2002 the Board of Supervisors passed a law requiring the City Controller to study a cab driver health care plan. The plan was to go into effect by January 2004 providing the Controller said it was feasible. The Controller said it was feasible, but due to likely increases in costs the city granted companies the right to increase gates from $85.00 to $91.50. However, this was only if the health care plan was enacted by January 2004. If not, then the gates were to return to $85.00.

Gates remained at $91.50, but no health care plan was ever enacted. On November 2, the UTW and three cab drivers filed a class action lawsuit against Yellow, Luxor, and Arrow Cab Co.

Jim Gillespie, a senior manager at Yellow Cab was asked at a Taxi Commission's meeting Tuesday if the lawsuit had anything to do with the decision to move towards long term leases. He replied, "It's one of the factors."

The city currently regulates daily gate fees that allow them to place a cap on how much companies can charge for drivers' gates. The new long-term lease agreements however, are currently not regulated. The unregulated agreement allows cab companies to, "modify rental fees at any time on 30 days' notice." The driver would then be required to pay whatever the new amount is due to the yearlong agreement.

Mark Gruberg points out that this is a reason why they want to differentiate the new leases from the current ones. "They are looking for a way around the gate cap and they think they may have found it," Gruberg stated.

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