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UTW Sues Cab Companies
for Gate Overcharges
United Taxicab Workers and three cab drivers have filed a lawsuit against three taxi companies for violations of the city's gate cap. The cap is the maximum amount taxi companies can charge cab drivers for leasing taxis by the shift.
The class-action lawsuit was filed Nov. 2 in Superior Court against Yellow Cab, Luxor Cab and Speck Cab Co. Speck operates Arrow Cab, and ran Veterans Cab until National Cab took over its management in January.
The suit was brought on behalf of all drivers who paid gates to those companies since Sept. 1, 2004.
According to the City Attorney, the gate cap during the time period in question was $85 for a shift of 10 hours or longer. But major cab companies have been charging $91.50 or more, with Yellow and Luxor charging $92.50. Two reports of the City Controller confirm that drivers have been overcharged.
Individual plaintiffs in the lawsuit are Marshall Childs, Yellow Cab; David Schneider, Luxor Cab; and David Barlow, Speck Cab Co. Representing plaintiffs in the lawsuit are Oakland attorney Jonathan Siegel of Siegel &LeWitter and San Francisco attorney Matthew Kumin.
The gate cap first went into effect in 1998. Its passage marked the successful conclusion of years of efforts by UTW to get runaway gates under control. The cap brought gates down from the $90-95 large companies were then charging to a maximum of $83.50.
At the same time, a permit lease fee cap set the amount cab companies could pay permit holders for leasing medallions at $1,800 a month. The lease fee cap allowed companies to remain financially sound while lowering gates. The lease fee cap sunsetted in 2001.
The gate cap remained at $83.50 until January 2003, when the Board of Supervisors raised it to $91.50, including $1.50 for Muni to help finance the paratransit program.
UTW agreed to the increases on account of a commitment in the ordinance to provide a health care plan for cab drivers within one year. Cab companies and permit holders, who were pushing for the gate increase, also supported to the legislation.
The ordinance provided that if a taxi driver health program was not enacted by Jan.1, 2004, the gate cap would drop to $85, unless the controller certified in writing that a health plan for cab drivers was not feasible. An October 2003 controller's report said providing health care for cab drivers was possible.
The ordinance set several other conditions for allowing the higher gate to be charged. One was passage of a cap on long-term leases, which has never taken place. Another was company compliance with requirements for filing financial statements. All cab companies have been out of compliance for at least part of the time since the ordinance was passed.
The board later extended the deadline for enacting a health program to Sept. 1, 2004. While there has been progress in developing a plan, its enactment is still some months away.
Because the plan was not in place in Sept. 2004, and because other conditions for charging the higher gate were not met, companies charging more than $85 should have reduced their gates. But they did not.
A board resolution passed Oct. 17 restored the gate cap to $91.50 as of Nov. 1. UTW has called upon the Taxi Commission to strictly enforce the new cap against companies charging more than the legal amount.
Although only three companies are named as defendants in the lawsuit, UTW intends to pursue gate cap violations by other companies as well. The overcharges amount to millions of dollars industrywide.
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