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>> >>: IF YOU'RE LUCKY ENOUGH TO HAVE SAVED, BORROWED OR POOLED 10S OF THOUSANDS OF DOLLARS
AND YOU WANT TO BUY A TAXI PERMIT, HERE'S HOW YOU DO IT IN SAN DIEGO.
>> >>: SO THE FEW MIDDLE MAN IN THE TOWN, THEY COME AND YOU JUST GO TO THEM I WANT TO
BUY A PERMIT AND THEN YOU BRING ALL THE CASH, CLOSE THE DOOR SOMEWHERE YOU COUNT MONEY AND
GIVE HIM. >> >>AMITA SHARMA: FRED IS AN EAST AFRICAN
IMMIGRANT WHO SPOKE ON ANONYMITY. HE SAYS HE HAS BOUGHT AND SOLD SEVERAL TAXI
PERMITS ON THE PRIVATE MARKET OVER THE LAST 10 YEARS.
>> >>: THE SYSTEM IS WRONG, THE SYSTEM IS ALLOWED US TO DO IT.
>> >>AMITA SHARMA: THE SYSTEM IS OVER SEEN BY THE METROPOLITAN TRANSIT SYSTEM.
IT REGULATES SAN DIEGO TAXI INDUSTRY, OFFICIALLY PERMITS CHANGE HANDS FROM A SELLER TO A BUYER
FOR A 3,000DOLLAR FEE TO MTS THROUGH WHAT'S GOING AS A TRANSFER, BUT UNOFFICIALLY, CAB
DRIVER ATTORNEY BOB GLAZER SAYS THERE'S A HIDDEN PROCESS.
>> >>: ONCE MTS SAYS OKAY, WE'LL TRANSFER IT, THEN ALL THE MONEY DEAL IS DONE WITH A
HAPPED SHAKE AND BACK ROOM. WHERE DO THE PEOPLE GET THE MONEY TO BUY THE
LICENSE, BORROW IT FROM, HOW THEY EARN IT, THAT'S ALL OFF THE RECORD, NOBODY KNOWS.
>> >>AMITA SHARMA: A KPBS EYE NEWS SOURCE ANALYSIS OF MTS DATA SHOWS THAT BETWEEN MARCH�2009
AND APRIL OF THIS YEAR, THERE WERE 326 TRANSFERS, ABOUT 83% OF THE PERMITS TRANSFERRED CHANGED
HANDS ONCE. NEARLY 17% WERE TRANSFERRED TWICE.
THE CAB DRIVER SAYS PERMITS CAN GO AS HIGH AS 160,000DOLLARS ON THE PRIVATE MARKET.
>> >>: SOMETIMES YOU BUY 90,000, YOU EXTRA 40,000, SOMETIMES YOU BUY 30,000, YOU SELL
A HUNDRED THOUSAND. I MADE A LOT OF MONEY.
I DIDN'T PAY TAX. >> >>AMITA SHARMA: THE TAXFREE NATURE OF THE
TRANSACTIONS RAISES LEGAL QUESTIONS. CALIFORNIA FRANCHISE TAX BOARD SPOKES WOMAN
DENISE SAYS THE STATE USED THE GAIN ON THE SALE OF AN INTANGIBLE BUSINESS ASSET LIKE
A LICENSE AS TAXABLE INCOME. LAWYER GLAZER BELIEVES THE PRIVATE MARKET
CAB PERMIT SALES ARE ILLEGAL. >> >>: BECAUSE THE LICENSE ITSELF IS NOT OWNED
BY THE PERSON SELLING IT. THE LICENSE IS A PROPERTY OF THE CITIZENS
OF SAN DIEGO. >> >>AMITA SHARMA: SAN DIEGO MARE BOB FILNER
SAYS HE'S CONCERNED AND PERPLEXED. >> >>: WHY IS THERE A BLACK MARKET WHICH IS
THE REASON FOR THOSE EXPENSES, ALLOWED TO OPERATE WHERE WE CHARGE 3,000DOLLARS FOR A
TAX TAXI MEDALLION, BUT THEY'RE BEING SOLD FOR A HUNDRED 50,000.
>> >>AMITA SHARMA: THE ANSWER ACCORDING TO DRIVERS LIES IN THE LAW OF SUPPLY AND DEMAND.
THERE ARE 933 PERMITS HELD BY 18 INDIVIDUALS AND CAB DRIVER BUSINESSES IN SAN DIEGO.
THERE ARE ONE THOUSAND DRIVERS LOOKING FOR WORK.
BOB IS ONE OF THOSE WORKERS. BOB WOULD NOT ALLOW HIS NAME TO BE USED BECAUSE
HE SAYS THE LEASE OWNER WILL FIRE HIM IF HE SPEAKS PUBLICLY ABOUT THEIR FINANCIAL ARRANGEMENT.
BOB SAYS HE PAID 7,000DOLLARS UP FRONT TO ENTER THE AGREEMENT AND EACH MONTH HE PAYS
1,200DOLLARS TO LEASE THE MEDALLION AND SPENDS ANOTHER 650 ON GAS AND INSURANCE.
HE SAYS SOME MONTHS HE TAKES HOME AS LITTLE AS 1,000DOLLARS AFTER WORKING 12 HOUR AS DAY,
SEVEN DAYS A WEEK. THE MARRIED FATHER OF TWO CHILDREN HOLDS A
SECOND JOB AS A TECHNICIAN. HE SAYS IT'S A HARSH LIFE.
>> >>: BUT WE'VE GOT 93 OPTIONS. JOBS ARE LIMITED.
>> >>AMITA SHARMA: A RECENT STUDY BY SAN DIEGO STATE UNIVERSITY IN THE CENTER ON POLICY INITIATIVES
FOUND THAT NEARLY 90% OF TAXI DRIVERS IN THIS CITY LEASE PERMITS FROM INDIVIDUALS OR TAXI
COMPANIES. THE STUDIES SHOW DRIVERS EARN A MEDIAN WAGE
OF 4.45 AN HOUR INCLUDING TIPS. FRED, THE CAB DRIVER, SAYS THE SOARING LEASE
RATES IN A THRIVING PRIVATE MARKET MEAN HIGHER CAB FARES FOR THE TOURISTS, SENIORS AND MILITARY
PERSONNEL WHO ALL REGULARLY USE CABS AS THEIR MAIN TRANSPORTATION MODE.
>> >>: THE NUMBER ONE VICTIM IS THE CONSUMER, THE SECOND IS THE DRIVER.
>> >>AMITA SHARMA: DRIVERS SAY LACKS OVERSIGHT RR IS TO BLAME.
TOMORROW WE'LL TAKE A LOOK AT MTS'S STEWARDSHIP OF SAN DIEGO'S TAXI INDUSTRY AND THE POSSIBILITY
OF REFORM. AMITA SHARMA, KPBS NEWS.