“Mikaiil Hussein, a former cabdriver who now is president of an advocacy group, United Taxi Workers of San Diego, said the association has been pushing for a change in the medallion cap for the last couple of years.”

A proposal to overhaul San Diego’s taxi industry by removing a decades-long cap on the number of permits that can be issued will be unveiled Thursday morning by San Diego City Councilwoman Marti Emerald and City Attorney Jan Goldsmith.

Motivated by what they say is the soaring “gray-market” value of cab permits that have led to high operating costs for taxi drivers, Emerald and Goldsmith acknowledge they’re in for a pitched battle with the local cab industry.

Not only will the removal of a cap ease the financial burden for drivers, they say, but it will also mean safer rides for passengers because cars will be better maintained and drivers won’t feel the need to work longer hours to make ends meet.

Meanwhile, cab owners believe that any effort to lift the cap could flood an already struggling local market with more operators, diminishing the value of their investments. The proposal also comes at a time when cab companies are facing growing competition from ride-sharing services like Uber and Lyft, which tend to undercut the rates of taxis.

“What I’ve witnessed is a disturbing dispute between permit holders and lease drivers, and over the last several years it’s become apparent that we really do need to make some serious reforms because there’s a flourishing gray market in taxi permits in the city of San Diego that have been bought and sold, we’re told, for figures upwards of $100,000,” Emerald said Wednesday in an interview with the U-T San Diego editorial board. “And the cab owners who purchased these say I’ve got to get my money back so they charge, according to the drivers, outrageous lease prices for the privilege of driving these cabs.”

She cited a 2013 study by San Diego State University and the Center on Policy Initiatives, which found that 90 percent of licensed taxi drivers rent their cars from individual or business owners, with some lease rates averaging $400 a week for 12 hours a day. Citywide, there are currently 993 taxi permits.

Said Goldsmith: “I’m a partner with Marti Emerald on this. I realize this is a policy issue but when I see a council member stick her neck out and take on some pretty strong opposition, I’m going to stand with her, and legally, it’s defensible.”

Emerald, who chairs the council’s Public Safety and Livable Neighbhorhoods Committee, said she will bring her proposal forward Sept. 18 to the panel and hopes it will be recommended for approval and forwarded to the full council. It would also need the approval of the Metropolitan Transit System, which regulates the taxi industry and is under contract with the city to administer the issuance of permits on the city’s behalf.

Michel Anderson, who represents many of the cab owners, said Wednesday he was blindsided by news of Emerald’s proposal.

“We had no idea this was coming,” said Anderson, “and we’ve been working collaboratively and cooperatively.”

Although the cost of a taxi permit, or medallion, as it is known, is $3,000, the value to obtain one on the open market has escalated over the years because of a city formula that seeks to balance the issuance of new permits with demand.

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