SFMTA Seeks To Hire Consultants For Two-Year Taxi Study. By John Han.

Photo by John Han.

The San Francisco Municipal Transportation Agency, (SFMTA), put out a ‘Requests For Proposals’ (RFP) calling for consulting firms to bid on a two-year taxi study, that the agency hopes will answer some of the industry’s most daunting issues.

The study, titled as, “Best Practices Study of Taxi Regulation”, hopes to address about seven key areas – 

1. Surveying the public rider-ship (listed as top priority) and then interviewing industry stakeholders.
2.   Researching the taxi industry’s national and international best practices.
3.  Developing a method to determine the public demand for taxi service and if there’s enough cabs to meet that demand, or if there needs to be more taxis.  Developing a method to help the SFMTA analyze taximeter rates, and determine if meter rates need to be adjusted.
4.  Developing a method to help the SFMTA to analyze gate fees, and determine whether gate fees need to be adjusted.
5. Helping the SFMTA develop performance standards in the field of taxi regulation.
6. Recommending taxi regulation reforms in a number of key subject areas.

You can view the RFP by CLICKING HERE. 

The study includes looking into the distribution of cabs, which can mean that it includes looking into the dispatching systems, and what technologies would be available to improve it.

According to the RFP, contract negotiations are scheduled this month.  The SFMTA may, according to the RFP, choose to reject all bids and not hire any consultants, or can start the bidding process over again.  Otherwise, if the SFMTA selects a consultant this go round, the contract would be scheduled to begin October 1, 2011.

A list of representative who recently attended a bidders’ conference includes Hara Associates, Transport Research Institute, University of Missouri, and Nelson/Nygaard Consulting Associates.  

Nelson/Nygaard is currently completing another study for the SFMTA regarding 5% credit card fees, rear seat payment terminals, and electronic waybills. 

An Interesting Point About The Study

In a ‘Questions and Answers’ to interested consultants, the SFMTA says that, “… illegal tips from drivers to dispatchers is the norm”, and that, “This is part of our permitting system [dispatch or taxi system] that should be restructured.” (Questions and Answers, RFP No. SFMTA-2011/12-01) 

The ‘Q and A’ publication is dated August 26, 2011 and can be viewed by CLICKING HERE.

Taxi Industry Still The MTA’s Cash Cow?

While the SFMTA has been racking up major points for the long anticipated business of BUSTING LIMOS (Ed Healy's coverage), it may not be a response to the outcries of taxi drivers only.  The agency appears to be looking for revenue as a result of doing it. 

In the same Q and A to the bidding consultants, the SFMTA says, “If we could substantially reduce the number of illegal operators, there would be more business for taxis and a substantial revenue opportunity for the SFMTA to issue new medallions.”  (Questions and Answers, RFP No. SFMTA-2011/12-01)

The SFMTA appears to be saying it wants to bust illegal taxis for two key reasons.  

• To demonstrate that the outcries of SF taxi drivers are finally being listened to, and then respond with actions that could increase their business.
• To allow the above to justify issuing more new medallions, presumably to be sold as SFMTA direct sales to buyer at the price of $250,000 each.   

If these two items together were to become the City's approach, then the latter goal could nullify the former.  In other words, the part where it says that, “… there would be more business for taxis…” may not necessarily come true. 

Busting illegal taxis means fewer numbers of vehicles for hire would be working the streets.  Fewer vehicles on the streets means less competition for everyone.  And less competition means better business.   

So if you remove illegal taxis from the streets and don't add new legal ones to make up the difference in numbers, then that would, in theory, boost the overall business for everyone.  

But if you remove illegal taxis and then say, “Now we can make up for the decline in numbers by issuing more REAL medallions”, then in theory, the number of vehicles for hire would stay at least the same or greater as before the illegal taxis were removed, and there’s no real reduction in competition.  In that case, the taxi drivers businesses are not necessarily being boosted. 

If that were to be the case, then the winners from illegal taxi enforcement would seem more likely to be,

• The cab companies, since they would manage a greater number of medallions.
• The SFMTA because it mentions, "substantial revenue opportunity", implying that the method of issuing new medallions would most likely be direct SFMTA sales to buyer. 
• The drivers who are at the top of the waiting list or those ready to purchase a medallion.  But since the SFMTA implies sale of new medallions as the method of issuance, drivers most likely to benefit would be those ready to purchase medallions (directly from SFMTA), rather than those at the top of the waiting list through the traditional Prop K method.  

However, it may not necessarily all seem so insidious.  The SFMTA expresses its intentions on ways it could use the revenue.  It says, 

“This in turn affects the question of appropriate staffing levels.  Until recently we did not have adequate staff to perform field enforcement.  We now have four Taxi Investigators, a civil service class that we created specifically for this new SFMTA function.  These Taxi Investigators can give certain parking tickets and can issue administrative citations to permit holders for regulatory violations and to illegal operators who do not hold a permit.”  (Questions and Answers, RFP No. SFMTA-2011/12-01)

The implication here is that the SFMTA would hope to crack down on illegal cabs, replace the reduced numbers of vehicles on the street with new REAL medallions (through a medallion sales program), and then invest the revenue to expand taxi operations, that could include busting more illegal taxis and limos (and then sell more medallions?).    

Should The SFMTA Allow Some Illegal Taxis To Become Legal?

While the SFMTA is certainly starting to crack down on illegal taxis thus drawing praise from the industry, at the same time, it has at least discussed the possibility of allowing some other out-of-town taxis to be legal. 

Here is another excerpt from the SFMTA’s ‘Q and A’.

“Q:  Have you discussed these issues with surrounding cities?

  A:  We do not have any close relationships with taxi regulators in nearby cities.  The characteristics of those cities are such that they have very different taxi issues than San Francisco has.  However, we have discussed the possibility of allowing some out-of-town taxis to service our southernmost border area because it is difficult to encourage San Francisco taxicabs to service that area.”  (Questions and Answers, RFP No. SFMTA-2011/12-01) 

The SFMTA should, and most likely will hold more public meetings such as town hall meetings, to discuss specific issues such as this.  It is a very important issue, but there is possibly a better solution.