Ahmad Sidaoui had been on the waiting list for a taxi medallion, a permit to operate a taxi, for 14 years when the San Francisco Municipal Transit Agency approved a pilot program in February that would allow qualified taxi drivers to avoid the line and buy a medallion, either from the agency or from a medallion-holder looking to sell.
Before today, Sidaoui could operate his taxi by leasing a medallion from one of the city’s permitted taxi drivers. By purchasing his own medallion, Sidaoui now has an opportunity to lease it to other drivers and also sell the medallion when he is ready to retire.
When Sidaoui became the city’s first taxi driver to purchase a medallion in 33 years today, he was No. 168 on a waiting list of more 3,000 people. Sidaoui could have waited until his number was up to get a free medallion, but he didn’t want to wait to find out how long that would take.
“It could be one year; it could be five,” he said.
Mildred Megarity was ready to sell her husband’s medallion, which he bought for $20,000 in 1968, she said. Today, Megarity was able to sell that medallion for $250,000 to Sidaoui, who bought it from her with lending help from the San Francisco Federal Credit Union.
Both buyer and seller commemorated the first medallion sale in the pilot program today alongside SFMTA officials.
SFMTA Executive Director Nathaniel Ford called it a “momentous day” and said the city is moving its taxi industry into the next century.
Under current rules governed by Proposition K, about 1,500 medallions have been authorized in the city, and those medallions are nontransferable. A medallion holder is allowed to lease the medallion to other drivers for a fee as long as the owner fulfills a minimum annual driving requirement.
The problem with this plan, according to SFMTA officials, is that older and disabled drivers are often forced to drive despite potential impairments or risk revocation of their medallions.
The pilot program allows these drivers to sell their medallions.
Christiane Hayashi, taxi director for the SFMTA, said that there are currently 300 permits held by individuals who bought them before voters passed Proposition K in 1978.
“Those medallions need to be re-circulated,” she said.
Under the pilot program, holders who are 70 years or older or permanently disabled will be able to sell their medallions. SFMTA also has about 60 medallions for sale that they have obtained through revocation proceedings or medallion-holder deaths.
About 1,400 cab drivers applied to buy medallions, 200 of which were found to be qualified buyers.
To date, two prospective buyers have been assigned SFMTA-held medallions, and 15 sellers and buyers have been approved and matched for sales.
SFMTA will collect $37,500 for every seller-to-buyer transaction and $237,000 for each SFMTA-held medallion sale. Ford said today that the agency expects to raise at least $10 million with the pilot program.
For every sale, $12,500 also goes into a Driver Fund, which is a pool of money meant to fund general taxi driver needs such as healthcare.
The Taxi Advisory Council, a 15-member taxi-industry representative council established by the SFMTA to monitor the medallion sales pilot program and advise the SFMTA Board, will help decide how to use the money in the fund, Hayashi said.
Mark Gruberg, a spokesman for the United Taxicab Workers union, said the medallion sales program is unfair to taxi drivers who have been on the waiting list for years and are unable to pay for a medallion. He said the city and SFMTA decided to make the taxi industry their cash cow to fill the budget deficit.
“This new policy overturns a system that has been in place for over 30 years,” Gruberg said.
He said the SFMTA, which assumed regulatory control of the city’s taxi industry in March 2009, has been hoarding the 60 medallions they plan to sell instead of giving them to drivers waiting on the list.
“Every medallion that is sold is one more medallion that is not going to be available either sooner or later to someone on the list,” Gruberg said.
Five local taxi drivers have filed a lawsuit against the SFMTA that claims the agency’s sale of taxi medallions is a tax and that the pilot program is therefore illegal without voter approval.
When asked about legal action against SFMTA in regards to the pilot program, Ford said today that he wasn’t aware of any.