POSTED 3:48 PM, AUGUST 28, 2014, BY FOX 5 DIGITAL TEAM
SAN DIEGO — Councilwoman Marti Emerald Thursday proposed removing a cap on the number of taxicab permits issued by the city, in order to ease working conditions for drivers and improve public safety.
The permits, administered for the city by the Metropolitan Transit System and issued for a $3,000 fee, are being resold at higher prices in “an underground market in taxi permits,” Emerald said.
“Because it’s a limited supply, there’s been this market of trading under the table, and the prices of permits have gone up in excess of more than $100,000,” Emerald said, backed by a group of drivers. “And then these permit- holders pass on the costs to who? Their leased drivers.”
The number of permits issued in San Diego, currently 993, is derived through a formula based on the number of vehicle trips it would take to meet demand.
A study by San Diego State University and the Center on Policy Initiatives found that 90 percent of the taxi drivers lease their cabs from permit-holders, and have to work 70 hours a week to earn what a minimum wage worker makes in 40 hours.
The study also determined that the system encourages drivers to work when tired or sick, creating a public safety hazard.
Sisay Bonsa, part of a group of permit-holders who oppose Emerald’s plans, said there will be more taxis on the streets, meaning less income for taxi companies already buffeted by competition from unregulated social media- based companies like Lyft and Uber.
“It will hurt the business more than it will help the business,” Bonsa said.
City Attorney Jan Goldsmith said lifting the cap was the best option from a legal standpoint. San Francisco tried to prohibit the trading of permits, but was subsequently sued, he said.
“The city has the legal ability to place a cap, and the city has the legal ability to remove a cap,” Goldsmith said.
He said the permits mean that city standards for operating a taxi cab have been met, such as a driver who has been screened and a vehicle that has passed inspection.
“It’s not a stock or bond to be invested in, but because of the cap placed by the city of San Diego since the 1980s, it has become a street value for in excess of what the true cost of a (permit) is,” Goldsmith said.
According to Emerald, the proposal will come before the City Council’s Public Safety and Livable Neighborhoods Committee, which she chairs, next month. From there, it would need to be approved by the full City Council and ratified by the MTS board, she said.