April 22 2015 11:23 AM

Lawsuit threatens to put worker-run taxi service on hold

United Taxi Workers San Diego organizer Abebe Antallo (left), Program Director Sarah Saez and volunteer Abdi Abdul.
Photo by Joshua Emerson Smith

After years of paying weekly fees to taxicab dispatching services, such as Yellow Cab, city taxi drivers—who are hoping to start their own worker-run cab company— see a light at the end of the tunnel.

However, the length of that tunnel will largely depend on a judge’s decision. Lawyers representing cab companies have asked for a freeze on the issuing of new taxicab permits while a court battle over the issue plays out. 

“Everyone will have to go back to being lease drivers, and they might not have that option because if permit holders find out that they’re applying to be owner operators, they’ll take their key,” said Sarah Saez, program director for the United Taxi Workers of San Diego (UTWSD).

After successfully lobbying the City Council last year to start issuing new taxicab permits beyond the 993 in circulation, the 700-member UTWSD celebrated. The victory was the result of a grassroots movement led by East African immigrants and refugees, and was years in the making.

Immediately, UTWSD started to organize a worker-run dispatching company and hired a consultant to design an Uber-style app. In May, the new company would be ready to operate out of the San Diego and Imperial Counties Labor Council building in City Heights.

“The goal is sustainability for the industry, and drivers to sustain themselves,” said UTWSD Executive Director Mikaiil Hussein, who also applied for a permit. “Other people want to make money.”

However, while lifting the cap could provide economic opportunity for hundreds of taxi drivers, it also means that once-coveted permits, which traded for as much as $100,000, would become significantly devalued.

In March, the San Diego Transportation Association, a coalition of taxi-permit holders and cab-company owners, filed a lawsuit against the Metropolitan Transit System (MTS), the issuing agency, that calls for an environmental analysis of handing out new permits.

The lawsuit argued that adding permits would significantly increase the number of cabs on the road, negatively affecting the environment. Lawyers for the association have asked a judge to stop the permitting process while the lawsuit plays out.

On Tuesday, April 28, Superior Court Judge Ronald Prager is scheduled to rule on that request for a preliminary injunction.

“We have always suggested that the number of [taxis] could quadruple,” said Michel Anderson, a spokesperson and lobbyist for the cab-company owners’ association. “That’s exactly what’s happened by the number of applications received.”

About 1,200 drivers have sent letters of intent to MTS requesting to interview for a permit. The applications came in so fast that agency staff had to close the process while it sorted out the backlog.

However, it’s far from clear what the impact will be to city streets.

Many individuals who have applied for permits already operate cabs in the city as lease drivers. Rather than see a flood of new cabs on the road, the city could be helping to transition many of the roughly 1,850 drivers in the city, 90 percent of whom lease a cab, to owner-operators.

“San Diego deregulated the taxi industry because it was in the best interest of the drivers, their customers and the city as a whole,” said City Attorney Jan Goldsmith, who’s defending against the lawsuit. “The small monopoly that now controls the industry does not want to compete in a free market, but that is the future. They may delay it, but they cannot stop it.”

Deferring to the lawsuit, Anderson repeatedly declined to outline the Transportation Association’s specific environmental concerns.

“My response to that is that we will allow the judge to make a determination, not them with their rhetoric, or me with mine,” he said.

Issuing new permits will have a “significant impact on the environment,” according to the lawsuit. The new policy will “add an unlimited, unknown and large number of slow-driving, parking, standing, queuing, and stopping taxicabs to the city… without study analysis, information, investigation, evidence or mitigation regarding the impact.”

The lawsuit is a farce, Saez said. “They’re saying you’re going to put all these cars on the road, and that’s going to aid global warming. It’s really hilarious. If you look at half their fleets, they’re Crown Victorias. If you really cared about the environment, why are those not Priuses?” 

Under the new permitting program, taxi drivers would have to drive low-to-no emission vehicles. On top of having such a taxicab, applicants would also need to pay almost $4,000 for a permit.

That’s no small sum for the taxi-driver community. UTWSD has partnered with ACCION International, a provider of micro loans. According to the company’s website, such loans average around $3,000, servicing about 350 small-business owners in the county.

The MTS regulations also require drivers to be part of a dispatching service. And that’s where a new work-run taxicab service would come in. Dispatching services in the city currently charge around $200 a week and routinely face allegations of discrimination against politically active drivers.

UTWSD has about 600 drivers applying for their own permits, roughly 200 of which are interested in helping launch a new taxicab company, Saez said. The dispatching service would cost drivers about $100 a week.

“We want drivers to have control over almost every aspect of that dispatch,” she said. “So they’ll be democratically making sure that there’s no discrimination, making sure it’s equal and fair.”

In the meantime, cab companies and current permit holders are hoping the judge finds enough threat of environmental impact, and puts everything on hold. That way, they won’t have to deal with losing drivers or competing with a nonprofit cab company—at least not in the immediate future. 

Write to joshuas@sdcitybeat.com or follow him on twitter at @jemersmith.