anything discussing something else a sort of like talking about unicorns, it is not a fact. they are independent contractors. supervisor campos: thank you. any other member of the public that would like to speak, please come forward. >> good afternoon, supervisors. [inaudible] i have been living in this city for 27 years, and i have been driving a cab 19 years. i want to thinank supervisor dad campos for making the proposal, and david chiu for his boat several months ago. i believe it is the right thing to do. for the past nine years the cab companies have to rate increases and recently won meter increase. as you know, we have already been paying high your gate fees and higher gas prices.

not to mention, tips to the cashier, dispatcher. therefore, i urge of this committee and the full board of supervisors not only to stop them from charging 5% to the drivers, but to also ask them to reimburse the 5% we have already been paying. i wanted to thank all of the supervisors who voted several months ago to stop charging the 5% to become drivers. supervisor marc farrell, in the past cab companies were over tried to drink -- overcharging for several years in terms of davies. things to me, they are dropping this. therefore, please vote in favor of this proposal. the bottom line is this, the

bottom line is the cabdrivers should not pay the 5% fee. supervisors, i cannot buy the argument that cap companies cannot afford to pay. how come? they're making over $1,500 per month from medallion. they are paying their employers salary to the cashier, a dispatcher, and so on. if the cab companies cannot afford to pay this? how come they are taking a cab drivers? thank you very much, supervisors.

supervisor campos and: any other member of the public that has not spoken that would like to speak? >> who is paying for the customers? no one else. the customer is suffering in this decision. it is like a crime. they have been in business for 15, 20 years. you agree with me? if the business is going down, you cannot pay inclosure doors. amazing. thank you. supervisor campos: public comment is closed. colleagues, i know it has been a somewhat long meeting are ready, but i want to make a couple of points as to why i introduced this resolution, and let me begin by saying that i do bunot

believe this issue should be about choosing one side or the other. i do not believe this is about trying to scapegoat or label anyone. my feeling is that our job as members of the board of supervisors when it comes to decisions made by an agency like mta is to simply make sure from a public policy perspective that it is the right decision. what this resolution does is it simply calls upon in the resolve provisions upon the mta to reconsider this policy. the reason why i think it needs to be reconsidered is because i do believe there are specific issues that have been raised that have yet to be, in my estimation, addressed. my hope is that in

reconsidering this issue that the mta can bring all the parties together so that they can be to the extent possible, a resolution that addresses the much -- as much possible the concerns of everyone involved. these are some of the things that drove me to make -- to present this. first of all, i do worry about the experience of the consumer. i do worry about the fact that someone said it is human nature that even if you try to enforce this and make something like this -- a mixture that something like this does not happen that you will have a situation where a customer gets in the cab and there is the argument or discussion about whether or not a person will be allowed to use a credit card. and i do believe we have the responsibility to make sure the customer experience is as good as possible. when you have a system that places the financial burden on the driver for the driver is

charged the additional feet, whether it is intended or not, you will have situations where drivers will be forced, or at least will have the pressure to not accept credit cards, and i do worry about that. i do worry about the issue of fairness in terms of what it means to pass this charge on to a driver. we have heard from many people, including management of these companies, how extensive this is an difficult it is to operate a business, and i am mindful of that, but the question remains, if this is expensive, who should bear the burden? and is it correct or right from apollo's -- public policy standpoint to pass this onto the driver? i think that discussion needs further analysis, and i personally believe, also have

been taken cabs, that being a cab driver is a very dangerous job. i do not believe people are making a lot of money being cabdrivers, and i think to pass on an additional fee of 5 percent signed is very significant. maybe we can debate about whether or not the additional charge has been offset by some of the rate increases. i think there are different perspectives on that. some of the rate increases that have been allowed some would argue group renamo or not in the first place. -- some would argue were minimal or not in the first place. i also worry about the amount of the charge. i think the 5 percent signed feet seems pretty high, given what we have heard, and i have heard not only in this meeting the outside the meeting about what it actually costs to make these transactions happen.

-- i think the 5% fee seems pretty high. i think it is a matter of fairness, not only to the drivers, but also to the consumers, customers, and i hope that the mta reconsiders, and i think it is important for us as a board of supervisors to be clear about that. as you can see, the resolution does not specifically call for an answer or solution. the hope is that once the matter is reconsidered that we will get results that make sense for everyone. president chiu: first of all, i want to thank all of the members of the public that came to testify on this resolution on both sides. i do not want to repeat was supervisor campos just said, except to say i will support this resolution. i have a number of questions that are still outstanding. first of all, i really do wonder

about the 5 percent said feet. i'm pretty familiar with the credit card processing world. -- first of all, i really do wonder about the 5% fee. 5% seems like quite a bit, especially with new technologies that are coming along. it takes the question of whether we should do this in the first place, and i appreciate the comments that were raised about labor issues and what the standards are in other industries. for me what is best for customers and passengers in san francisco is most important. one of the frustrations i have about this topic is we really cannot get much more involved in taxicab policy, except to urge the mta to do something, and i think it is unfortunate we do not have staff here today to help us -- did you want to say anything? >> [inaudible]

>> if you would like to explain about your decision, we would be happy to hear more about that. >> good afternoon, supervisors. i am the deputy director at thesfmta. 0-- sfmta. we are in the process of reevaluating this decision. since the policy was adopted, there are a lot of new things. the federal golf re-examining interchange fees and read -- and minimum payments did not exist at the time it was adopted. it is timely to have another look at it with better information, and that is what we're in the process of doing. we have retained a consultant who has interviewed many of the stakeholders in the industry, and we expect to have a final report from them any time now. supervisor farrell: i am fine

actually, thank you. president chiu: just to finish up, i think that is helpful, and i think it is our purpose is to give you a little bit of perspective. from my perspective i think the mta needs to spend a lot more time thinking about the taxi cab situation overall. i do not want to get into i think the tremendous frustration that the public has around the difficulties of accessing tabcas in many parts of the city. in my mind this is just one piece of a bigger puzzle of what we need to do to fix the situation on the streets, and whenever we can do from the board and to encourage the reform, i would like to anchorage. supervisor campos: one question i have is given that there is additional information to be had and additional analysis that is

needed, is there an openness on parts of the mta to rescind the decision until the work is completed? >> i do not want to speak on behalf of the board, but the fact that we're taking another look at it is an important step in that direction. i also want to address your concern about credit card acceptance, and that this would have a negative affect on the customer's experience. and when credit card technology was mandated in other cities they had similar experiences with the drivers reacting to the fees, including everything you have seen here in san francisco. in all of those cities that has not died down, that there is not a problem anymore with the typical taxicab accepting credit cards. second, we have recently, within

the last eight weeks, got a better field presence in the city, so we go to tax the lines, taxi cab drivers will grow to taxi lines and make a lot of contacts, and we have made a lot of inroads in discussing the credit card situation, removing i did not accept credit cards in the back of taxicabs. no matter what the reaction to changes, we can expect the reaction will come into acceptance as some point. supervisor campos: i would have to see the numbers. i still do not buy that. i think the numbers would have to speak for themselves. i cannot imagine there would not be those situations. the question remains, what would be the usage rate if you have that have this be passed on to the drivers? -- have this fee passed on to

the drivers? >> in new york and boston there were at 30% credit card usage, and i expect that is where we are now. we are at the low end of credit card usage. new york is up to 50% after three years, and boston is climbing as well. supervisor campos: why about the fairness of passing this on? why is this different than a restaurant passing this on to a waiter or waitress? >> you have one set of circumstances in one situation and another set of circumstances with an independent contractor. from a public policy standpoint for the city -- from the city's perspective you are still talking about workers. what is the policy rationale or distinction between the cases? >> that is the only policy distinction i can make between

those cases. as to the fairness issue, i think it comes down to what is the real turning of the taxi driver, and the fact is we have no information on that. we can only rely on self reporting, and i suspect it is low. supervisor campos: that is part of the issue, that you took action without information. that is part of the problem. take of action we took was in part to develop the information. -- >> the action we took was in part to develop the information. there are only two other parties that it could be passed on to. one is the company and one is the passenger. california consumer laws prevent you from adding a fee to a credit card transaction because someone has chosen to use a non- cash form of pavement. but it does allow you to do is offer a cash discount. if we were to do that we would

have to replace the 2,000 meters. the other option would be to pass it on to the customer in the form of a convenience tfee through a third party. in las vegas it costs you $3 to take a taxi if your friend to use the credit card on top of the bear. i did not feel about was a way to get people into taxis, because it is less convenient to use a taxi, because you may have to go get cash or pay a $3 convenience fee. supervisor campos: i am quite shocking would allow up 5% fee, given there has been a lot of information about how the cost of the transaction is much lower. take a much of the information is quite new. -- >> much of the information is quite new.

so some of that has come out of a lot of the national credit card debate that has been going on over the past year, so that is why it is a good time to look at this policy because there is a lot of new information. before the federal law was passed there was a no minimum requirement. now there is. that could take care a part of the problem. supervisor campos: any other questions? president chiu, anything else? supervisor farrell: think ank yu to everyone who came out today. before working at city hall, i used to take cabs all the time to work. a few thing struck me as funny. before gas prices skyrocketed, cabdrivers could not increase their fears. i thought that was incredible. -- could not increase their

fares. i have no problem with the kind of passing on to the passenger scenario. that does not bother me at all in terms of a convenience fee or otherwise. some of the comments that were made about cab companies opening up accounts in people's names without their authority, to me, that is as egregious behavior and should never be allowed, but my more fundamental issue is the notion of we at the board to the resolution of the mta to have these past to have a high bar. we do not have control over the mta here, and this is interesting, but that is about it. because the mta is already going through a process of reevaluating this. resolutions like this are something that i have trouble supporting unless there is

something outlandish that everyone is supporting on. i am not convinced we have a clear picture of what goes on here in terms of all of the fees. i certainly did not get that today. to me, it is a much broader picture that i would want to fully understand before doing something like this. as it is, it is not something that i support. it is not that i do not support it or doing something wrong. the chronicle just came out with an article of mine about square. support our local jobs and use that company. in the case, given the mta, that is fine, but whether you want to continue, mta is already doing what the resolution as for. supervisor campos: thank you. i do believe that we know enough to know that the current

situation is not from my perspective the right policy approach, that there are still enough questions that need to be addressed, which is why -- i do not know what that answer is, which is why we are asking the mta to reconsider. quite frankly, i do believe it is important for us to move forward, because even though the hope is that this will change with the new leadership at mta, we have had many examples where the board of supervisors has heard from the mta in the past they're going to move in a certain direction and make progress in a certain area, and unfortunately that has not happened with some issues, so i think it is important for us to do that. i appreciate your perspective in respect to that perspective, but i would ask that we move that item forward with a positive recommendation. could we have a motion by president chiu? we can have a roll call on that.

>> supervisor chiu? >supervisor chiu: aye. >> two ayes, one no. supervisor campos: the matter passes. we will pass a forward to the board with a positive recommendation. thank you, everyone, for being here. madam clerk, could you call the next item. >> item #6 some ordnance amending the san francisco health care security ordinance, section 14.1, 14.3, 14.4, and adding 14.1 0.5. supervisor campos: thank you. i will turn it over to president chiu. president chiu: i want to thank the members of audience that have been waiting here for public comments.

we know it has been a long morning. i will make very brief comments. i want to think by supervisor -- thinking supervisor campos and his office and a coalition of folks that have come together to highlight the current problem that addresses the health reimbursement accounts. i think all of us in the room share the intent of the original legislation, the importance of the help the san francisco program, and i think we are proud to live in a city that has stood for universal health care. that being said, it is no surprise from my perspective, that we need to make sure that whenever legislation we move forward with insurers that employees get access to health care, but do this in a way in a difficult economy that we're not leading to a necessary job losses and layoffs. our cities economists has estimated it would be to up to

460 jobs per year being lost, and this would impact 800 companies. frankly, i want to frankly, i want to see if there is a different way for store accomplish our goals. the ordinance i have introduced eliminates the use it or lose it nature of h.r. 8's and the so- called january problem, which is what happens when an employee tries to get reimbursed for a health care need at the beginning of the year after a one-year time of money has expired. we achieved the goal in the legislation by requiring that at least a year's worth of health care dollars must always be available to the employee on a rolling basis. the ordinance also strengthens notification requirements of employers, which has been an issue, by requiring that they occur on a quarterly basis in appropriately which is an information about have access

accounts is permanently posted. the situation the "wall street journal" has written about a round false advertising makes it clear that employers that charge and state that they are charging a healthy san francisco surcharge but not actually spending it on health care -- that that could lead to very negative consequences. the ordinance makes a number of other changes, but i want to mention one last provision, which is meant to address the situation in case this amendment is challenged in court and the court upholds the changes. i want to make it clear that the ordinance would then revert to a supervisor campos -- revert to what supervisor campos has proposed. if we could move relatively quickly to public comment, i know a lot of folks have taken time out of their busy schedules to be here, and i would like to get feedback from the public on this. supervisor campos: thank you. we will be happy to proceed to that, but before we do that, i want to make a couple of points.

first, i want to thank the members of the audience who have been waiting for this matter, and i know that this issue has been an ongoing issue for many months. we introduced my original legislation in may of this year, so that was five months ago. but i want to make a couple of points. i appreciate the work that president chiu has done in his legislation. i certainly agree with the spirit of what he is trying to do, but let me make a couple of points about the differences between his legislation and what my legislation, the original legislation, tries to do. first of all, with respect to the protection to consumers, my legislation is actually the only legislation that requires that where a charge is made on a customer, where the charge is made -- when you go to a restaurant, as an example, and you are told you are paying an additional percentage so you can provide health care to your employee, but -- that in fact

that percentage is paid to health care. president chiu's legislation requires that the expenditure is not made by that employer -- the restaurant, for example -- they have to provide notice that that is what happened. but there is, again, no requirement that the restaurant actually meet the commitment that it made to that consumer that the money will be spent on health care. the second point -- and this is a fundamental point that goes to the heart of where there is a difference of opinion -- is the question of whether or not as these accounts are in existence, an employee, who was the beneficiary of these accounts, is going to have the opportunity to accrue money in that account through the time of

employment. president chiu's proposal limits the amount that is a crude to four quarters or one year, and that is where there is a fundamental difference of opinion -- limits the amount that is accrued. those of us that proposed the original legislation believe it would not provide meaningful access to health care to limit what an employee can accumulate. the four months that president chiu allows for would not provide much coverage. we have heard what it would cost to spend a night in a san francisco hospital -- close to $20,000. if you are a woman delivering a baby, you are talking about spending at least $16,000, and that is if there are no complications. i do not believe that it is fair to say to a female worker in some of these businesses that even if they work for four

years, that they will not have enough money to pay for that delivery. what is interesting about the discussion that is happening -- and this is the last point that i am going to make because i do want to hear from the public -- is putting this in the context of what is happening at the national level. what this legislation and the people supporting the legislation that tries to limit the services that are provided to a worker -- what these proposals are essentially doing is something that is to the right of what the united states congress and the president of the united states have done. the federal law, the health care legislation that was passed by president obama and that was approved by the u.s. congress, is actually moving away from reliance on these accounts. under that federal law, if you, as an employer, beginning january 2014, do what these businesses are doing in san francisco and rely solely on these accounts to provide health care to your workers, you will

be charged a penalty under federal law because there is a recognition by the federal government that these accounts do not provide adequate health care. the u.s. congress and the president of the united states have made that very clear. so it is an ironic situation that we find ourselves in this predicament where you have members of this board, where you have the business community that are actually pushing for something that is to the right of what the u.s. congress has proposed. i think it is unfortunate. i think it is inconsistent with the principles that drove us to pass universal health care. i think that it is really the wrong policy to try to protect a dinosaur, which is what these accounts are -- a dinosaur that will go extinct in the very near future. that is not what san francisco should be about. it should be about protecting wer