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February 22, 2012: PFHT Board Meeting Minutes

 

City of Portland Revenue Bureau Regulatory Division

PRIVATE FOR-HIRE TRANSPORTATION

BOARD OF REVIEW

Minutes for February 22, 2012

Time: 1:35pm

 

1. Call to Order

 

Roll Call

Present: Ryan Hashagan, John Case, Kirk Foster, Steve Entler, Michael Huggins, Red Diamond, Muzafar Rasheed, Ramon Corona, Gail Bauhs, Tony Tabrizi, Al Ochosa, Kathleen Butler, Frank Dufay, Lauren Wolfe, Ken McGair, and Patrick Kramer.

Absent: Jon Putman, Veronica Rinard

Others/Audience: The list of other attendees is available from the Revenue Bureau.

 

2.     Agenda

 

Motion to add Approval of Minutes to the Agenda: Red Diamond

Seconded by: Kirk Foster

Passed Unanimously

3.     Approval of Minutes from January 25, 2012 Board Meeting

 

Diamond asked for clarification of the sentence on page 2 middle of 1st paragraph: “It is more difficult for smaller companies to provide better conditions for drivers since there is less opportunity to raise revenue to cover the cost of increased benefits for drivers.”.  Diamond wanted to know what is meant by “benefits for drivers”.  Butler said that sentence primarily refers to reducing the kitty.  Butler suggested rewording “cost of increased benefits for drivers.” to “cost of creating better conditions for drivers, such as reduced kitty”.

Foster suggested adding Mr. Wako’s comment that some drivers expressed concern about reprisals from the company if they speak up about the issue.

Motion to approve minutes with suggested revisions: Diamond

Seconded by: Corona

Passed Unanimously

 

Roll Call taken-Unanimous Approval of Minutes with suggested revisions

 

4.     Public Comment on Taxi Driver Labor Market Review

 

Butler asked that everyone who comments speaks their name clearly for the minutes.  Public comments will be taken first so the Board may hear the comments from the public before addressing the issues.

The focus of these comments should be the accuracy of the report.  Solutions will be discussed in future Work Sessions.  This is an opportunity to receive input on the report regarding either items that were missed or things we got right.

 

Public Comments on the Report

Frank Choto: Thank you for this opportunity.  There is hesitation from some because public speaking is so difficult.  This report is very significant in the scope of research into this issue.  There is however, some information that gets missed.  Mr. Choto gave several names of career taxi drivers that have passed away.  He suggested that they died prematurely due to poor working conditions-long hours, poor diet, carbon monoxide intake, stress, lack of healthcare, poverty.  Mr. Choto also stated they died poor even after decades of service to the City.  He urged that we find solutions for these issues so current and future drivers don’t have this same experience.

Brenda Hyatt, current taxi driver:  Ms. Hyatt commended those involved in report.  The language in the report tends to go from independent contractor to employee and from wages to income.  The City should take into consideration the State’s pending decision on the independent contractor/employee issue when developing a plan.  This type of employment is comparable to slave labor with sweat shop type conditions.  Ms. Hyatt stated that she has been on the road driving when she probably should not have been due to pressure of making the kitty and supporting her family.  The Board should look at the relationship between the PFHT Program and the companies.  Companies issue fines for violations of City Code.  Ms. Hyatt said that the individual circumstance should be considered before any fines are levied.  She said companies are acting as agents for the City by issuing fines for City Code violations.  Fines are also issued for violation of Tri-Met’s rules.  One of the arguments you’ll hear is that we have the same status as an electrician or a contractor- just because the driver is in the car does not mean that they are working.  The $6.22/hour figure is accurate for a 12 to 14 hour day.  However, the driver is generally only working for 8 or 9 hours of that day.  The compensation is different for an employee than it is for an independent contractor.

Kedir Wako, Chairman of Union Cab (taxi company applicant): Mr. Wako brought up the issue of taxi driver insurance coverage.  A Driver is here today that had an accident, stayed at OHSU for a few days.  He came back to work and found out his cab contract was terminated.  His main concern is for the health and life of the drivers.  Some cab companies are trying to find out who is part of Union Cab.  We don’t want to attack any single cab company.  Mr. Wako requested Red Diamond to testify to the Board. 

Kevin Hewitt, Broadway Cab driver: Hourly income described in report.  He keeps very accurate income records and reported that he has made $8.40/hour over the last 6 months.  In 1989 he delivered pizza and made $8.30/hour.  This is a $0.10 raise over 23 years.  His income figure is based on hours in the cab ready for a fare. 

Badada Malka: Drivers are having a difficult time making enough money and dealing with customers.  Drivers need rights.  Listening is not enough, action must be taken. Drivers need help from the City to solve this problem. 

Tesfaye Aleme, Green Cab and Green Shuttle: We must understand and balance the needs of the drivers and of the companies.  They must work together harmoniously.  This will allow us to provide the best service to the customers.  The City does need to step in.  The smaller companies need the opportunity and the permit numbers to fix these issues. 

Dahir, Radio Cab driver: Driver stress causes various health issues.  The City must act quickly for the drivers.  Permits must be issued to the drivers.  City can make more income. 

Raye Miles, Broadway Cab: Ms. Miles feels there are significant issues that affect drivers’ earnings that are not listed in the report such as meter rates and illegal taxi operators.  The kickbacks at the hotels are also a factor.  If companies decreased their rates by 10% that is the equivalent of one or two trips a week and would have a huge effect on driver earnings.  Drivers are feeling the effects of a decade of atrophy.  Rate comparisons are not consistent with the rates posted on the CAPO website.  Lease rates should not be compared to owner drivers.  Liability, dispatch and vehicle maintenance are the significant costs to companies.  The report didn’t go into the method of reporting.  She expressed concern that if it wasn’t done in a statistically valid and random sampling, some section of drivers could be left out of the report.  Specifically, you would be less likely to encounter a driver who works the dispatched calls as opposed to primarily utilizing taxi stands and the airport backfield.  Butler replied that we talked to drivers at renewal to get a broad sampling. 

Mr. Hassan: The issue he has with the companies is the abuse of power.  High kitty, drivers not covered in an accident, threat of contract termination.  Drivers want their own company. 

Robert, Broadway Driver:  Better to lower the lease and the drivers need to run their own cabs so the rates will go down.  If the driver owns the cab the dispatcher won’t abuse them.  He had a bad experience with dispatch.  He gets only one or two calls from dispatch, the rest he deals with the doorman.  Drivers need to own the permit to end the abuse. 

Sultan: Worked for over 12 years for 3 different companies.  One discriminated against him due to language and the other because of his color.  He has experienced every complaint we have heard here today.  Diamond is elected to represent the drivers.  Sultan feels Diamond should bring drivers’ frustrations to the Board and feels that Diamond is not representing them properly.  He would rather drive the owner’s car in case of contract termination.  He feels that raising the meter rate will not matter because the company will find a way to raise the kitty.  Having co-op drivers would improve service to the City.

Abdi Duale, cab driver for 3 years: If most drivers did not have the fear of company retaliation many more would be here.  Mr. Duale gave an experience of when he had an accident Broadway would not cover the medical care.  The cab system is not right currently and the City needs to step in.  Either they change the kitty rates or how the permits are issued.  Taxi drivers provide a valuable service to the community with little income to show for it.

Unidentified audience member: The report shows that the conditions for drivers are better at driver owned companies.  Unfortunately, there is only one driver owned company in the City.  He feels all companies should be driver owned.

Brenda Hyatt: The City needs to look at business practices at the companies regarding how contracts are issued.  The contracts are full of complex legal language which she was given three days notice to review.  She suggested requiring 2 weeks notice.  This could be a real issue for non native English speakers who likely end up signing contracts without understanding what they were signing.  Separately, there was a situation that she had a family emergency and she had to pay $160 fee to keep her position while she cared for critically injured family members.  On another occasion, there was a dispatch error resulting in a meter rate of $53 but was reimbursed only $30.  If she takes her car in for mandatory service or other required time off the road she is paid just $7/hour.

Slav Karkhu, Portland Taxi: Driving a more economical, fuel efficient vehicle makes a big difference in driver earnings

Dahir: 900 drivers only about 10% here due to having to support their families or fear of losing their job.  He suggested that when the Board takes a taxi get input from their driver. 

Kedir Wako: Urged the Board to pay attention to how the companies feel about the drivers.  He stated that there was a lack of Russian drivers because their taxi company made them sign an agreement saying they would not come.

Mohamed Sofe, cab driver for 10 years: He went to Africa 7 months ago, taking 2 months off.  When he returned to Broadway to drive again they would not hire him.  He says the reason they provided is that he had one speeding ticket and the insurance would not cover him.  After two months he went to Green Cab and they hired him.  He then mentioned that while driving on the Morrison Bridge he was rear ended.  He was taken in an ambulance to the hospital.  Broadway did not cover his medical bills and yet made him speak to the lawyers and say what they wanted or he would lose his job.

Robel: Broadway had self insurance so he does not know how the previous speaker would not get hired back.  He expressed appreciation to the City for considering issuing the drivers their own taxi plates.  He feels that driver safety would be improved by eliminating the frustration currently had by drivers working for a company.

Unidentified audience member: The reason Russian drivers are not at the meeting is due to apathy.  They have been driving for many years without change.

Samir: Blame should be on the City.  The City has had a role in the current situation.  The focus should be on the City finding a solution and not what has happened in the past. 

Ahmed Abdi, Broadway Cab driver for 10 years: Drivers’ patience is running out and will turn against the City.  The City is responsible for what is happening to us and not the company.

Repeat speaker, unidentified: No one is forced to be a taxi driver.  He looked for work, but wasn’t able to find anything better. 

Lists of upcoming scheduled Work Sessions including subjects to be discussed were passed out at the meeting.  This will also be posted on our website.

BREAK-Approximately 10 minutes 2:50p-3:00p

 

Board Member Comments

 

Diamond:  Thanked Kathleen Butler and City staff for preparing the report.  He also thanked Mayor Adams for his initiative for commissioning this report.  Diamond is hopeful that this will lead to an improvement of driver conditions.  It does accurately express the tough conditions, no benefits with little pay.  In the past drivers have been largely excluded in having their needs addressed.  The permitting process is key in understanding the economic well being of drivers.  Issuing permits to companies give the power to the company to the disadvantage of the drivers. The drivers largely concur with the report that the kitty plays a major role in their low wages.  The question is why the kitty is so high.

Other important findings of the report include: permit renewal should be tied to company performance in driver working conditions and quantity and quality of services provided to drivers.  Also, additional regulations should be considered designed to promote sustainable working conditions and fair wages for drivers.  Taxi permitting system is central in finding solution to poor driver working conditions.  The kitty is basically leasing the permit, which is prohibited by City Code. 

Drivers are frustrated with lack of enforcement of the current City Code.  Enhanced enforcement would have a great impact on improving the economic conditions of the drivers.  This was not mentioned in the report.  Enforcement was a main topic for last driver standing committee meeting.  There are 14 hotels selling rides to shuttles and town cars.  He stated if 2 trips a day were being given at each of the hotels and the rides would have resulted in a total of $75 in fares to taxi drivers, the total revenue lost per day is $1050.  This would amount to over $365,000 a year.  His states that his estimate was very conservative.  He said he is referring to revenue taken from cab drivers by others violating City Code.  Diamond says that the City should enhance Code Enforcement.  The effect on family life due to long working hours and other working conditions, though not mentioned in the report, includes religious observance. 

On page 18 in the second paragraph of the report, it states that even non owner operator drivers enjoy a lower kitty at Radio Cab.  Diamond stated that statement is incorrect and suggests it should be corrected.  Non owner operator drivers also known as lease drivers actually pay the highest kitty in the City. 

On page 19 the report lists driver payments to the company.  Diamond suggests adding: credit card processing fees (as much as 10%), companies charging City permit renewal fee directly to drivers, and the rumored contract fee which is thought to amount in the $1,000’s. 

Page 10 of the report, contains Table 2 “Average ‘kitty’ income per company” which is based on $500/wk per taxi permit.  Although the report disclosed that the numbers used are for comparative purposes only, Diamond feels that real numbers would be more useful.  For example, Diamond stated his vehicle brings in close to $46,000 a year instead of the $26,000 a year shown in the report.  Butler added that this table was for the purpose of comparing the potential kitty income of small companies with that of large companies.  She explained that actual numbers are not given due to the confidential nature of the financial information.  Diamond stated that he has posted the actual kitty numbers on C.A.P.O.’s website. The average potential maximum kitty revenue per permit is upwards of $46,000 a year.  Radio Cab’s is in excess of $70,000.

The final paragraph on page 16 of the report says the kitty is the main source of revenue for the companies.  Diamond asked if there were other sources of revenue identified.  Butler replied that there are other sources of revenue.  She however agrees that kitty revenue is the most important source of revenue.

Butleradded that many times other sources of revenue would not be disclosed due confidentiality issues.  Diamond feels that in many cases the kitty is the only source of income for the companies.  The report states it is difficult for smaller companies to reduce it.  Diamond asks why a company would want to reduce its income.  Butler replied if you have 20 permits as opposed to 150 you have less operating expense wiggle room.  Butler added that unless you have a critical mass of permits and thereby kitty revenue the less opportunity to reduce revenue. Revenue Bureau auditors found at some set kitty amounts the larger companies would be able to sustain the reduction while smaller companies would be out of business within the next year by imposing the same kitty limit. 

Corona: The study is very well done.  The credit should go to the Chair and the group we’re working with.  He has been here since ’99 and this is the best group he has worked with.  He is confident that positive changes will get done.

Ochosa:  As a result of this process he would like to see balance between the cabbies, the companies, the City and the riding public.  Sustainability should be a main focus and will best serve the City and the riding public.  He is excited to see the results of the scheduled work sessions. 

Entler: Asked Diamond, how he got the high kitty numbers for Radio Cab.  Diamond explained: A Crown Vic lease for a 12 hour day shift is $90, and a Scion is $100.  He took $100 x 7=$700.  The lease rate is $85 for a 12 hour night shift for a Scion.  $85 x 5=$425 and $115 (Sat/Sun) x 2=$230 for a total of $665.  $665+700=1365 week.  A Scion has maximum kitty of over $70,000 a year. 

Entler asked if Diamond has asked him about any of the financials.  Diamond stated he has not.  Entler said that 90% of the lease driver revenue goes to owner and only 10% goes to Radio Cab.  He added that the average lease driver shift is around 5 hours and for owners is about 8 hours.  Entler went on to add that Radio Cab focuses on the most efficient use of each permit or vehicle.  This is so the driver can make a living wage and still have time for family life.  Entler offered audited financials.  He said the owner drivers actually are paying less than the report stated.  Butler stated that the nature of the number comparisons will be detailed in the final report.  It will be clear what is compared with what and specific financial information authorized for disclosure will be provided. 

Butlerwent on that the numbers in the report really are for drivers that auditors were able to verify have worked for 3 years in a row as a taxi driver.  We wanted to focus the report on full time career taxi drivers.  Information in the report is more limited for drivers who did not fit that description.  Entler said that really the focus should be more on the income the drivers get during their shift compared to what they pay for the kitty/lease, and what services and value they get for the kitty amount they pay.

Foster:  In reference to benefits, there could be issues due to how the Oregon Legislature defines employees and independent contractors.  Is the City pursuing a change to the law?  The State’s definitions should be included in the Study. Butlersaid that the length of the appeal process is unpredictable.  We are not necessarily looking at drivers as employees or saying they must have benefits from the companies.  Foster stated he wanted to mention this to manage expectations on what we are able to do and suggested this issue be added to the report.  What we found from the report is the average taxi driver’s income does not allow them to purchase healthcare coverage for themselves.  They also don’t have benefits available as employees nor do they have protections afforded to employees.

Huggins:  Thanks for putting together such a comprehensive report.  He is looking forward to productive dialogue not only among the owners of the companies and the Board to come up with an equitable solution to these issues. 

Butler encouraged everyone to get on the website and post comments before the closing of the open online comment period onJanuary 27, 2012.  Once the comment period closes we will endeavor to draft an addendum to the report detailing the issues that folks have brought up or more fully explained.

Ochosa:  When are you planning to put out the Addendum?  Butler stated she hopes to have it ready for the next Board meeting.  Upon the close of the open comment period all feedback from that will be included in the problem solving part of the process.  The meeting topics are tentative.  We would like to hear from the company owners, drivers, and general public.  It would be great if the riding public could be involved in this process because some of these topics relate to customer service and safety.

Frank Choto:  Mr. Choto expressed concern that this is a metro issue.  He would like the number of taxis that have been added to cover the metro area outside Portland to get a clearer picture of the issues.  He also would like the effect these metro cabs have on the Portland taxi drivers included in the report. Butlermentioned that we are working with some of the other municipalities on a more coordinated approach to this issue.

Unidentified audience member: What is being done about illegal cabs operating in Portland?  Dufay stated that enforcement efforts have been effective in eliminating illegal activity by Americab.  Several fines have been issued to Orange Cab and Always Cab.  We are working closely with Police on the weekend which is the most common time for illegal cabs to operate.  It was stated earlier that there is an epidemic of illegal cabs in the area.  We don’t find evidence of that.  We do know illegal cabs are coming in on weekend nights.  The police are working with us on this.  The Port has also been helpful.  The Police are citing illegal cabs for traffic violations and providing reports of illegal operators to us so we can in turn issue civil penalties.  The next step is getting authority to tow these illegal cabs and get them off the street.  The police have been very effective in helping us with enforcement. The police don’t allow the illegal fare to continue.  The passenger gets out of the car and the police assist them in getting a safe ride home. 

Slav Karkhu:  Portland Taxi’s drivers have their own merchant accounts.  They do not charge any credit card fees to the drivers.  The fees come from the bank to the driver directly.  The drivers can choose any bank they want.

Unidentified audience member:  Question to Radio Cab: Do your lease drivers have to pay the kitty/lease fee even if they don’t work? Entler replied, no, they just call and cancel. The kitty is not charged when the driver does not work.

 

Adjournment

 

Motion to adjourn by: Huggins

Seconded by: Ochosa

 

Passed Unanimously

Next regularly scheduled Board meeting is scheduled forMarch 28, 2012.

Minutes submitted by:

Patrick Kramer, Regulatory Program Specialist

 

                                         

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