IQ Business Connection
Administrator for Yellow, Checker and Rainbow Cab Companies
August 2, 2022
RE: Memorandum
Council Agenda: 08/09/22
File: 22-1127
Item: 2.12
Letter of Opposition
Honorable Mayor and Council Members:
We strictly oppose the recommendation made by SJPD and CSJ Finance Department contained in the above listed memo. This unilateral decision did not address the matters at hand nor did it address the financial burdens endured by our endangered industry.
Recent History of the San Jose Taxicab industry
Five years ago, the City of San Jose supported as many as 16 taxicab companies, 700 taxicabs and 900 licensed drivers. Today, only three companies remain and a mere 157 cabs to service to the entire County.
This is not a flourishing industry. And, yet this report seems content to shutter the remaining taxicab operators, effectively ending taxicab service in the City of San Jose.
Permit Fees
In their decision, the SJPD and CSJ Finance Department recommend a Taxicab Driver New Permit fee of $623. This is nearly three times higher than Oakland, which is the second most expensive at $251.00. (Add in the annual Business tax @ $210 for a total cost of $833 for a new driver).
A Driver Permit Renewals costs $352, rivaled only by Sacramento which costs $195. These permit fees deter most new drivers when they can drive an Uber at $0.00 initial cost.
The memo didn’t address these costs and the unlevel playing field between taxis and multi- billion-dollar companies such as Uber and Lyft.
Raising Insurance Limits
The memo recommends an increase in liability insurance limits from the current $350,000.00 to $750,000.00, more than double the current coverage limits.
Some taxicab companies are paying as much as $6000.00 a year per unit for the current required level of insurance. Doubling this coverage may increase the per unit costs to as much as $12,000.00 per cab.
Unlike Uber and Lyft, taxicabs are required to have commercial insurance 24/7 where TNCs , (Uber/Lyft), are allowed to operate with “period based insurance” with coverages as low as $50,000.00.
The memo mentions “since 2008 show that 13 taxicab companies (SF) evidenced minimum liability coverage of $1,000,000.00”. While the memo does not give a reason for the higher limits, we assume these companies are participating in the City/County Paratransit program that provides the revenue required to pay for the additional insurance costs.
We did not see that the memo address the costs of such an increase of coverage..?
Most SJ taxicab operators can no longer afford collision coverage leaving them out in the cold when they are hit by uninsured or underinsured motorists. (Low income liability limits are $3000.00)
The standard costs for physical damage coverage is 8-10% of the vehicle value plus a $1000.00 deductible.
Color Scheme
As stated in the memo, sections 6.64.160, 6.64.180 and 6.64.370 all reference a color scheme.
These sections also reference a TRADE NAME and DISTINGUISHING VEHICLE MARKINGS.
We ask council to remove the words “color scheme” and or “color or colors” from these sections. By eliminating these words, the trade name and distinguishing vehicle markings will remain.
The color requirements are antiquated, and they place additional and unwarranted costs on today’s taxicab operators. By removing these words from the ordinance, taxicabs will still have the following markings on each vehicle:
- Affixed Decals with four-inch lettering-Trade Name (each side of the taxicab) - Affixed Decals with four-inch lettering – telephone number - Affixed Decals with four-inch lettering – vehicle number (four sides of the taxicab) - Commercial License Plates
These marking greatly exceed anything Uber and Lyft are required to display, yet Uber and Lyft vehicle are considered distinguishable by the CPUC.
Uber and Lyft have taken over most all taxicab services. Yet their simple 3x5 inch card is adequate to avoid confusing the public.
Taximeter
We appreciate the memo’s recommendation and SJDP will no longer require a taximeter to perform a vehicle inspection and place a taxicab in service as on-line enabled software continues to replace the need for them.
We appreciate your time and attention with these matters.
Best regards,
Larry Silva
President and GM
IQ Business Connection
FKA, Yellow Checker Cab
GREEN CAB
Reliable & Fast Service
Silicon
Valley Taxi Drivers, Inc.
We hope that the effects that an increase will have on our Industry could be genuinely considered; this Insurance limit increase and the existing regulations need to be reevaluated and omitted.
The directives that this committee creates should protect our area of business, and the hundreds of consumers who use our services as a lifeline. We transport people to medical dialysis and cancer treatment; this decision will endanger these people
too, not just our Industry.
City Hall promised to make it an equal playing field for Taxi Companies and TNCs; this is not possible if the proposed regulations are implemented. Increasing Insurance limits will make it
impossible for Taxi Companies to survive.
If you have any questions or require additional information please feel free to contact the Industry Representatives. Green Cab and the remaining Taxi Companies in the City have joined together to communicate our opposition of the recommendation made in the above listed memo.
Thank you,
Maria Magana
Manager
Silicon Valley Taxi Drivers, Inc.
Dba Green Cab
GREEN CAB
Reliable & Fast Service
Silicon Valley Taxi Drivers, Inc.
California, and Saint Louis Missouri have gotten rid of Color Scheme requirements for Taxi Companies and they have not had issues because of it.
Insurance Requirement for Taxi Drivers:
We need the Insurance limit requirement for Taxi Companies to remain $300,000. The Taxi Industry has a very limited market for insurance. This allows these companies to increase their premium even if no losses were accrued. Nonetheless, premiums also increase when policy limits and coverages increase.
As of now, Green Cab is paying about $4,000 per cab each year. A $750,000 policy limit will significantly increase our premium. Our premium per cab will probably double and we will not be able to sustain this extra expense. This increase will force Green Cab into closure. Green Cab will not have any funds to ensure continued operations if we have additional insurance expenses.
The City’s Risk Management said the interest in increasing the limit exists to make sure there are funds available to cover significant losses. However, usually attorneys only request the full policy limit, in the event of a significant loss. Our insurance has not requested an increase on our coverage limit because of a past loss; therefore we believe it is not necessary. As stated above, it will also be incredibly damaging to our Company.
Closing Statement:
TNCs and the Taxi Industry cannot be on an equal playing field unless actual change is implemented to level the playing field. We respectfully ask the City to reexamine and decrease permit fees, revise Ordinance 6.64.370, so that color schemes will not be required, and ensure that the required insurance limit remains the same. The Taxi Industry is not growing, it is endangered. Regulations should help the people or entities they were created for; they should not damage or further endanger our Industry.
If you have any questions or concerns, please feel free to contact me at (408)771-6986 or email me at [email protected].
Thank you,
Maria Magana
Operations Manager
Green Cab
[External Email]
[External Email]
08/23 Council Agenda Item 22-1253
Lawrence Silva <
Fri 8/19/2022 12:01 PM
To:City Clerk <
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August 19, 2022
Honorable Mayor and Council Members
We reviewed the staff revised memo and we appreciate the PD supporting our elimination of the paint color requirements. (Maybe we will see some Teslas at some point) Also, we appreciate the PD’s willingness to expedite the review the actual man-hours for driver permitting services. Since the driving test, written test and map tests by a sworn law enforcement officer are no longer part of the current procedures we believe the permitting costs will be reduced.
As for the Risk Manager’s recommendation to increase the liability insurance beyond that of other agencies, except Oakland Port Authority, (We are not sure if OAK actually has any taxicabs working there), is completely baffling. Their own data doesn't support this increase.
Government Agency Amount of Coverage
City of Oakland and Port of Oakland8 $1,000,000
City and County of San Francisco9 $1,000,000 Temporarily Reduced to $ 300,000 City of Los Angeles10 $ 300,000
City of San Diego11 $ 300,000
City of Sacramento12 $ 500,000
During our meeting the taxi industry clearly stated the cost of the additional coverage is a direct out of pocket expense for each driver. An additional $90 per week (estimated) on top of the current cost of fuel and inflation is really hurting all SJ licensed drivers.
Inflation hurts drivers in several ways. The costs to maintain their vehicles including tires, brakes, oil changes and carwashes, not to forget about major repairs as dealerships now charge up to $300 per hour.
Inflation is making it more difficult for drivers to put food on the family table and pay rent.
The City denied any risk in this matter nor does it appear that they have any complaints regarding this issue.
Taxicab drivers live in a world where low-income residents are allowed to carry only $3,000.00 in liability insurance. Now this level of insurance "too little" as it will not even replace a rear bumper of most vehicles in a minor accident.
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We will be asking council to deny the increase in liability insurance in order to preserve the remaining taxicab services provided to the citizens of San Jose.
If you have any additional questions, pleas feel free to call the undersigned at Best regards,
Larry Silva
Larry Silva
President & GM
IQ Business Connection
FKA Yellow Checker Cab Company