The sale of taxi medallions — the oft-debated, much-hyped plan that was originally projected to generate $15 million for The City — will finally begin today, although it’s unclear how much the program will generate this fiscal year, which ends in less than four weeks.
The proposal to sell taxi medallions — the operating permits that allow owners to drive and lease their cabs to other drivers — was touted by Mayor Gavin Newsom as a funding godsend for the cash-strapped San Francisco Municipal Transportation Agency, the department that took over cab operations last year and that oversees Muni.
Under the original permitting setup, drivers who wanted to become medallion holders were placed on a waitlist for the turnover of one of 1,500 medallions in circulation. In most cases, it took decades for a coveted permit to become available and drivers only had to pay $1,600.
The total number of medallion holders has not increased since 2007, and the SFMTA currently possesses 60 medallions.
Now, the SFMTA hopes to sell medallions for roughly $250,000 each. The agency said it’s identified about 207 drivers who are interested in parting with a permit for cash. Direct sales by the SFMTA generate $237,500 apiece, with some money going to a fund for cab drivers. The agency receives a 15 percent cut from driver-to-driver sales, equaling $37,500 apiece. The sale of three medallions at City Hall today is the first time the plan will be tested to see if it’s capable of generating revenue.
However, the process has been bogged down by logistical issues, including how SFMTA sales will be financed, how driver-to-driver sales will be financed and finding cabbies who meet the driving criteria and can afford as much as a $50,000 down payment, along with maintaining current distributions of medallions among cab companies. The issues have created uncertainties about how much the SFMTA stands to profit from the first three sales, according to spokeswoman Kristen Holland.
As a result of the delays, the SFMTA has changed its financial projections, first from $15 million to $11 million and now down to $2.5 million.
“Due to the complexity of these transactions and the fact that the staff has to create the process from scratch, it’s difficult to project exactly what will transpire with each sale,” Holland said.
Many cab drivers have expressed contempt at the new medallion-sales program, saying it unfairly favors richer, more-established taxi companies. Drivers also have complained that the process is not transparent enough. On Thursday, five cab drivers filed a lawsuit against The City seeking to prohibit the medallion sales.
Permission to drive
Breakdown of SFMTA’s taxi medallion sales:
1,500 Current medallion-holders
$15 million Original projection for taxi medallion sales this fiscal year
$2.5 million Current projection
$250,000 Cost to purchase medallion
$237,500 Revenue generated for SFMTA from direct sale
$37,500 Revenue generated for SFMTA from driver-to-driver sale
$750 million SFMTA operating budget