San Francisco's "Sweatshops on Wheels"
Taxi companies to begin long term leases
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,"
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,"
Supervisor Tom Ammiano's resolution, backed by Chris Daly, was
brought to the board on June 12 urging taxi companies not to increase
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.