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Why is it So Hard To Get a Cab in San Francisco?

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Ever waited for a very long time to grab a cab in San Francisco on Friday or Saturday night? Of course you have.

Katrina Schwartz reported a story on KQED News Thursday about the rise of ride-sharing services in San Francisco that have emerged to fill the supply-demand gap. She reported:

Several ride-sharing startups are trying to take advantage of discontent with the seeming scarcity of taxis on city streets," she reported." But the new services are facing opposition from both the taxi industry and regulators.

San Francisco's taxi industry considers them unfair competition. And the California Public Utilities Commission, which regulates limo services, says they’re breaking the law. Over the past few months, the agency has sent cease-and-desist letters to Lyft and at least two similar services, SideCar and Uber."

The companies are still operating as they fight the orders, which threaten fines and jail time.

One thing in Katrina's story puzzled me:

San Francisco’s Municipal Transportation Agency keeps a lid on the number of medallions, or operating permits, it issues to cab owners. The city has licensed about 1,500 cabs. In response to complaints about service, and with high-profile events like next year's America's Cup looming, it’s doling out 200 temporary permits.

But if there’s enough of a chronic shortage of cabs in San Francisco for ride-sharing companies to enter the market, why doesn’t the regulator of licensed taxis, the SFMTA, issue additional permanent medallions instead of a measly 200 temporaries?


The MTA’s web page on how to get a taxi medallion says, “SFMTA Taxi Services will not be accepting applications to get onto the medallion waiting list until further notice.”

So, what gives?

Paul Rose, spokesperson for the SFMTA, says that according to the Authority’s strategic goals, “The plan is to add additional taxi medallions. We have to do that in conjunction with taxi companies and taxi drivers." The MTA is waiting on a study that will analyze the taxi industry as a whole in San Francisco, Rose said, and it’s expected to be released early next year. "[Issuing] the temporary medallions is one step in providing additional service. We’re looking to the study to help inform long-term decisions."

SFMTA Chief Ed Reiskin has acknowledged the problem in service. “The two single biggest things I think we could do [to improve taxi service] is increase the number of taxis and improve the public’s ability to access them,” he told Katrina Schwartz. The 'access' issue Reiskin is referring to: there are eight different dispatch companies connecting customers with cabs for around 33 taxi companies, creating a lack of coordinated, streamlined response to customer requests.

The MTA's Rose says the agency is working on an app with the City Attorney’s office for “the development of a realtime data stream from the taxi fleet in order to allow private taxi-hailing applications to access fleetwide data." It’s still too early to say when consumers will be able to download the app, he says.

We called the Fog City Cab company, which owns 35 medallions, to ask what they thought about more operating permits as a solution to the taxi shortage. Owner-operator Sonny Tam is not so crazy about the idea of added competition.

"Only Thursday, Friday and Saturday has a shortage, but after 8:30 or 9:00 p.m., Sunday through Wednesday, there are very few fares,” Tam said. He thinks more taxi medallions would create more competition during slow times and perhaps even accidents between aggressive cabs fighting for fares.

So what would help on those high-demand nights? In his opinion, “If the city allowed cab companies to operate spare cabs on the weekends, that would be good. All the fleets in San Francisco have [a combined total of] about 150 spare cabs."

Steven Webb, a medallion owner for Big Dog City Cab, also disagrees that more medallions would ease the taxi shortage. He thinks that could flood the market with less-qualified drivers. What San Francisco needs, he says, are professional cab drivers who work hard to create a regular client base.

But Charles Rathbone, one of the assistant managers at Luxor Cab, disagrees. He's both a medallion holder and a driver.

"The situation with cabs in San Francisco is that there are obviously not enough cabs," he says. "Everyone knows that. Our company, along with others like Yellow Cab, has been down at the MTA for years screaming for more cabs... It would help the shortage, but you don’t want to have too many [medallions].”

So what is the right number?

“That’s the $64,000 question," he says. "Nobody knows!"

Rathbone says that the City is doing something about the taxi shortage with the 200 temporary operator permits it recently issued. Rathbone says Luxor Cab received 41 of the permits, which he hopes will be reissued. He says they amount to a substantial increase in the fleet, and that the company has put 13 new cabs on the road so far; they hope to get the rest of them up and running by the end of the year.

One more thing, Rathbone says. They need drivers!

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