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Yellow Cab’s New Lease
Gets Off to Slow Start
Most Drivers Don’t Sign Up
Despite Threat of Job Loss
Yellow Cab has made good on a threat to start phasing in a new contract that obligates drivers to pay for their assigned shifts in advance each month. But despite company attempts to coerce drivers into signing the new lease, as of early August most had refused to do so.

In a n otice posted before the July 1 star-tup date for the new leasing scheme, Yellow told its drivers that all its current contracts would be phased out and replaced by the new leases. As a consequence, a small number of drivers rushed to sign up out of fear of losing their jobs or shifts.

But the great majority of drivers have not signed, either because they cannot afford to or because they are unwilling to submit to the onerous conditions contained in the new lease.

In addition to prepayment of shifts, Yellow is requiring drivers to post a one month’s security deposit with their first lease installment. The deposits appear to be illegal under a 1996 court decision permanently enjoining Yellow and Luxor from holding such deposits in violation of the state Labor Code. The initial monthly cost for leasing 16 shifts a month is $2,928, including the security deposit. For 20 shifts, the initial cost is $3,660. Afterwards, the monthly cost is $1,464 for 16 shifts and $1,830 for 20 shifts. The cost per shift is based upon the city’s gate cap of $91.50.

The new leases run for one year and give the driver the option to renew annually. But the driver is obligated for the full year, and cannot get out of the contract even if the company raises the lease payment during that time. Yellow has stated publicly that it will abide by the city’s $91.50 gate cap, but both Yellow and Luxor have been violating the cap since September 2004.

The new lease in its original form did not allow for sub-leasing of shifts or short shifts. There was no provision for illness, injury, emergency or other hardship, nor any opportunity for vacation time. We have heard that Yellow may have altered some provisions of the lease, but we have not been able to confirm the changes. At a Taxi Commiss ion hearing on the new arrangement, Yellow Cab manager Jim Gillespie was asked about the consequences for service if cabs were elft idle owing to a driver’s inability to work. He said Yellow would not let that happen, but offered no specifics.

The new leases also double the amount the company charges drivers for accidents, from $500-1,000 to $1,000- 2,000 per accident. Drivers have long complained of company abuse in deciding whether a driver is at fault in an accident.

Yellow claims it is instituting the new leases “to ensure the survival of the company.” It stated that it has not had a “real” gate increase since 1998. It also complained of a lawsuit brought by United Taxicab Workers to recover gate overcharges that have taken place since September 2004, and of a proposal for a health care plan for cab drivers that is pending before the Board of Supervisors.

But Yellow’s claims don’t stand up to scrutiny:
• The city’s gate cap was $83.50 when it came into effect in in 1999, and now stands at $91.50. (Yellow is currently charging a weekly average of $92.50.)
• The Taxi Commission has recommended a meter and gate increase that would more than compensate companies for their share of health plan costs.
• Yellow’s claims of financial difficulties ring hollow. It’s long been the financially strongest cab company in San Francisco. It recently settled a lawsuit over an accident for what was reported to be far more than UTW lawsuit would cost them, without any apparent change in company operations. Besides which, the UTW lawsuit is probably years away from resolution.

There is also a strong prospect that companies will obtain a gate increase for hybrid and alternative fuel vehicles. Yellow stands to profit the most from such a Summer 2007 6 United to Win provision, as it has far more of these vehicles than any other cab company.

In a subsequent notice to drivers posted after the July 1 starting date for the new lease, Yellow said it is offering the contracts “on a voluntary basis.” But the notice also warned that “there will be fewer available daily leases as drivers choose these alternative lease periods.”

Word at the garage is that some drivers have lost their regular cabs to the new lease, but have kept their shifts. Although accurate information is hard to come by, the number of drivers affected thus far seems relatively small.

In a notice almost identical to one posted at Yellow, Luxor Cab informed its drivers in June that it will be instituting annual shift leasing as of Sept. 1. As of early August it was not clear whether Luxor still intends to go ahead with the new lease.