Remembrance of Peak Times Past. By Jane Bolig.

Photo by John Han.

Jane Bolig is President of DeSoto Cab.

Does San Francisco need peak time taxi medallions? If so, how would they operate: who would hold them; when would they be on the street; when off?

At the November 22 Taxi Advisory Council meeting I suggested that we survey cities around the country to see how they structure peak time medallions. Our problem might already have a solution.

Rather than wait for the taxi section to take up my suggestion, I decided to do my own research, so I started by asking the Taxi Limousine Paratransit Association (TLPA), headquartered near Washington D.C., for a list of cities with peak time medallions.

The answer surprised me. Apparently, Las Vegas is the only place in the entire U.S. to issue peak time medallions. In fact, they issue all kinds of medallions, some of which can only pick up in certain areas, some of which may operate only at certain times of the day, or on certain days. It’s easy to imagine why a city built on tourism, with predictable peaks and valleys of demand, would issue a variety of special medallions, but hard to imagine how its experience could apply here.

So, what about other American cities with demand cycles more like ours? Do they ignore peak time service needs? Are they waiting for San Francisco to take the lead? Or, is there another reason? If we look into our own history we may find the answer.

For five decades, from the early 20's to his death in the 1960s, W. Lansing Rothschild operated the most successful taxicab business ever in San Francisco: Yellow Cab, or what we now refer to as “Old Yellow,” the company that preceded the Yellow Cab Co-op. (Old Yellow failed after Mr. Rothschild’s death, when the business was sold to a character named C. Arnhold Smith, who drained it for cash to fund a series of shady deals.)

Yellow was so dominant that it “owned” all the big hotel taxi stands. In 1968, the “Independent Taxicab Operators Association” brought a lawsuit to break up its monopoly. Here’s an interesting passage from one of the association’s complaints:

“The plaintiffs charge that although Yellow has 503 permits, it keeps an average of only 310 vehicles on the street at any one time, holding the rest in reserve and utilizing them for peak business…” (Italics added)

Nobody wants to return to an era in which one company so completely dominated the cab scene, but isn’t it interesting that any company could hold 40% of its fleet in reserve? Is it because they were so big?  New Yellow is just as big, why don’t we ask them to hold 40% of their cabs “in reserve?”

Photo by John Han.

A significant reason is because Old Yellow could afford to hold back unneeded cabs, while New Yellow cannot. Old Yellow owned all of its medallions outright. New Yellow—owning no medallions—before any other bill is paid, has to pay $2,000.00 or so a month to each and every medallion holder. And Yellow isn’t alone.

All San Francisco cab companies shoulder the same obligation. To keep medallion holders on board they must pay them a monthly lease fee. To pay them they have to put out all their cabs every shift, every day of the week, every week of the year. That is why drivers fight for rides most Sunday mornings and passengers can’t find cabs any Friday night.

It’s why we discuss peak time medallions in 2010, and why we didn’t in 1968.

Jane Bolig