MTA Staff Wants Peak Time Permits to Be Leased to Cab Companies

Peak-time permits — long discussed as a more driver-friendly alternative to full-time medallions — may soon be approved, if MTA staff has its way. But in another assault on what remains of the Prop K system, under the staff proposal the permits would go to taxi companies, not cab drivers.

Christiane Hayashi, head of the Taxi Section, put forward the idea in a recent memo to the MTA Board of Directors. According to the memo, the permits would be issued for a term of three to five years.

Board member Malcolm Heinicke, formerly on the Taxi Commission, has been a vocal proponent of peak-time cabs. Heinicke has made no secret of the fact that he views them as a potential revenue source for the MTA.

The memo suggests that cab companies should have to bid for the right to operate peak time permits. An auction system would presumably provide greater revenues for the agency than the fixed-price system adopted for the sale of full-time medallions to cab drivers.

The proposal contemplates the use of spare cabs as peak time vehicles. Companies would lease the vehicles to drivers by the shift. The permits would have weekly or monthly limits on their hours of operation rather than designated hours or days of the week when they could operate.

Somewhat ominously, the memo suggests that it is not necessary to hold a public hearing to assess the need for these permits, despite the fact that Transportation Code Section 1115 requires such a hearing. According to the memo, a supply and demand study, which has been requested of the Controller’s Office, could provide a sufficient basis for permit issuance.

If the idea is approved, permits would be issued to cab companies for the first time in over 30 years. Proposition K of 1978 restricted new permits to individuals who had committed to meeting the driving requirement. But the MTA is no longer bound by Proposition K.

Some in the industry, including John Han, a driver-member of the MTA’s Taxi Advisory Council, have proposed a system of driver-held peak time medallions. Since the medallion sales program has severely reduced drivers’ chances of getting a medallion unless they can afford to buy one, that would only seem fair. But if the choice comes down to fairness for drivers or revenues for the agency, there is little question about where to place your bet.