In a move seen by drivers and taxi owners as the latest insult to their industry, San Francisco Municipal Transportation Agency officials have considered taking a slice of the revenue generated by backseat advertising.
In an interagency memo from March, SFMTA Chief Financial Officer Sonali Bose and former Executive Director Nathaniel Ford asked an agency official whether they should seek a cut of the revenues from the advertising that will appear on new backseat credit card terminals.
SFMTA Taxi Director Christiane Hayashi was overseeing efforts to add backseat advertising as part of a move to equip every San Francisco cab with a credit card terminal.
Hayashi said it wasn’t appropriate for the SFMTA to seek a share of the ad gains. Under the current arrangement, 90 percent of such ad profits go to cab companies and the remaining 10 percent is shared by the industry’s 5,000 or so drivers.
But she said the SFMTA could ask for a slice if it were to take a bigger role in future ad negotiations.
Spokesman Mark Gruberg of the United Taxicab Workers, which filed the information request that revealed this discussion, said the move was another agency ploy to exploit cab industry revenues.
“Since the MTA has taken over regulation of cabs, they’ve treated the industry like a cash cow,” said Gruberg. “Any move they make must be tainted by the suspicion that they’re doing it for the money.”
Gruberg cited the decision earlier this month to issue nearly 90 new taxi operating permits as further evidence of that claim. The SFMTA said the decision was based on demand for more cabs, but under a new formula, the agency can directly sell the permits to drivers for $250,000 each. On Aug. 2, the SFMTA approved 10 such sales, totaling $2.4 million. A portion of these revenues benefit drivers.
SFMTA spokesman Paul Rose said the agency has no current plans to seek any cab company profits. He said Hayashi was weighing all the agency’s options when she responded in March.
Still, the industry is wary of the MTA’s intentions.
“They have no right to this revenue, so I really hope they don’t pursue this possibility,” said Athan Rebelos, general manager at DeSoto Cab company. “The industry doesn’t have these great profit margins where we can just hand out cash to the MTA. At the end of the day, if we get hurt by these plans, the passengers will get hurt.”
Taxis at a glance
1,587 Taxi medallions in San Francisco
5,000 Taxi drivers in San Francisco
$250,000 Price to purchase a taxi medallion
$2.375 million Revenue generated by SFMTA’s 10 direct medallion sales on Aug. 2
$775 million Total agency budget