Anatomy Of A Crisis: Debate & Chaos At Sea-Tac Airport

Anyone at all familiar with taxi as a business model understands, without being told, that on an annual basis there are a only finite number of fares, something true in the past and remaining valid today.  While some might enjoy pointing out that taxi medallion values in a city like New York remain much higher than Seattle's, despite recent dramatic declines, that deviation having more to do with artificial licensing caps than actual business volume.  But that doesn't mean that our business climate here in Seattle is healthy, because the exact opposite being true.

The primary reason for this are the high fare rates associated with cabs, often making them the last and not first transportation choice.  Why pay $45-50.00 for a taxi from Sea-Tac to downtown Seattle when instead the light-rail link will cost you $3.50?  You will have reason take a cab if you have 3 passengers and 4-6 bags but if not, why would you?  And overall response has been to choose anything but a taxi.

Unfortunately, now due to Seattle's now legendary traffic congestion, if you are in a hurry, taking a cab might not even get you there any sooner, again eliminating another reason to take that expensive ride.  In huge metropolitan areas like Chicago, New York, London, Paris, Mexico City, becoming an ant and descending underground to the subway is usually a far better and more sensible option. So why take a cab?  Only when are no good alternatives which, in most situations, is not the case.

All this is another reason why the Uber/Lyft/ride-share model, those direct taxi competitors, is ill conceived, trying to make billions from a million dollar industry.  There are real reasons why the recent MIT determined that Uber drivers were only making on average $3.33 per hour,  Uber having invaded a very modest taxi industry in an attempt to make it gold-plated.  Not a very good or bright idea.  But do all those Saudi Arabian and Japanese investors know this?  No they don't.

This truncated, strained business scenario exploded upon the local evening news April 17th when a large number of cabbies (members of the Western Washington Taxi Operators Association) serving Sea-Tac participated in a strike action coordinated by Teamsters Local 117, complaining that Eastside (ESFH), the company managing the Sea-Tac contract, was attempting to illegally downsize their fleet by 85 vehicles.  The rationale behind ESFH's action, thinking they held legal authority to proceed, was the great decline in Sea-Tac taxi passenger usage due to Uber and Lyft's recent dominance, now carrying over fifty percent of potential Sea-Tac customers requiring a ride home or north to a DT hotel.

This development, embraced and encouraged by the Port of Seattle, has upset what heretofore was a very tenuous balance: 405 taxis and flat-rate vehicles (up from an original 235 taxis)  serving a now far smaller market.  Given the ride-share onslaught, what is happening was predictable, along with the ensuing anger because, when including Uber and Lyft,  you can quickly see there are just too many operators sharing the same customer pie.

Along with the thousands of returning Sea-Tac passengers taking light-rail trains, thousands of others are taking shuttles and town cars in addition to the ordinary custom of being picked up by friends and family.  What appears to be clear is the Port of Seattle's focus upon generating revenue has left those once traditional service providers, the cabbies, behind, taxi not only losing their customer base but their very livelihood threatened.  And what is now happening is also too predictable, with the victims turning upon themselves, a kind of fraternal cannibalism ugly in its bloody realism, brother eating brother.  No, not a pretty sight to behold.

In early April ESFH sent out a notice to all its independent operators entitled "ESFH Notice of Voluntary Reduction in Airport Fleet," stating that due to having too many operators, 85 operators out of the current 405 would have to go due to the obvious drop in Sea-Tac business.  What ESFH was offering was a $20,000 buyout to those choosing to go.  But item #2 was perhaps less friendly, stating to "Implement fleet-size reduction if voluntary buyout does not result in 85 vehicles."  This notice also informed everyone that an answer was required by 5:00 PM April 17, 2018, leaving little time to consider a most monumental business decision.

While at first glance, it seemed the announcement was fair until everyone understood that the remaining 320 operators were required to pay $9000.00 each to finance the buyout.   Predictably this pleased no one whatsoever since the majority of them had originally paid $3,985.00 to keep driving at Sea-Tac after ESFH won the contract, this after paying I believe $10,000 over six years ago to Yellow.  An additional "salt in the wound" was the $245.00 weekly dispatch fee for an essentially non-existent system.  That it has reduced to $160.00 ( including a $95.00 gate fee) perhaps assuaged the tiger but never fully taming the beast.  Adding to operator  dismay was a rotation system limiting them to 4 days on, 3 days off at the Port, forcing many to work downtown Seattle and the misery of languishing upon hotel stands staring at the dashboard hours upon end.

The upshot of all this was the portrayal of ESFH as a renegade company that completely disregards established operating norms, often threatening their independent operators with termination while protecting others, especially Somali immigrant operators.  While some of this appears be both reality and myth, it might be indisputable that ESFH entered the Sea-tac market not fully comprehending the financial side of what it had committed itself to, like so many other associations incorrectly viewing Sea-Tac as the proverbial "pot-of-gold," Sea-Tac the "Golden Goose" superior to the turkey that is the Seattle and King County taxi market.

From the beginning, ESFH saw itself as being bullied by the local taxi single owner community, Teamsters Local 117 and the Port of Seattle (specifically the Port Commission); and because of that, took on an aggressive response, not caring who they alienated, their "us against the world" stance a middle finger at all presiding authority, saying, perhaps rightly, that they never wanted all those extra operators forced upon them; and sole responsibility lie not with ESFH but with the Port of Seattle and its labor ally, Teamsters 117.

Initially becoming a shouting match, it quickly quieted down after Mike Merritt, Port of Seattle Chief of Staff wrote ESFH a letter telling them that legally they were not entitled to either reduce or dismiss their independent contractors. That admonishment led to to a May 5th, 2018 ESFH response backtracking from previous statements, even stating a new policy of allowing operators to potentially work seven days a week, even though that might be a terrible idea in Sea-Tac's greatly diminished customer environment.

Given these recent developments, there appears to a temporary lull in active combat but unlike the famous WWI Christmas 1914 truce between front line British and German troops, I have no reports of carols sung or gifts of plum puddings and cigarettes exchanged, meaning tensions clearly remain high and could instantly flare upon the smallest provocation.  I can only wish that commonsense reigns during ESFH's remaining 1 1/2 years contractual years, with everyone focusing upon regaining some small percentage of lost customer base.  My major hope is that the Port of Seattle will somehow, someway enhance the ability of both ESFH and the cabbies to increase profitability because this is truly a economic issue transformed into cultural argument, something many have lost sight of.

As said earlier, this kind of infighting does little good, only heightening animosity.  I believe a huge attitudinal adjustment on all sides is due, and the faster this happens, the better it will be.  Part of what I mean is when I told someone today that some E-Cab single owners held hope to eventually win the contract upon its expiration, the immediate reaction was that they must be delusional.  How can wanting to be in charge of one's own financial destiny be equated to a kind of psychosis?  I just can't agree with that kind of response.

Above all, I feel, coming from all sides of this discussion, that we must have openness and clarity.  Without that, we in the taxi industry are doomed, not only at Sea-Tac but everywhere in the USA where top-lights illuminate the night, beckoning everyone to hop in and move down the road.  Shall all of us then calm down, engaging in productive conversation?  If it can be done in the midst of a shooting war, it certainly can happen with this situation.

And why not?  There is no earthly reason not to converse and shake hands.  None of us are the enemy.  Instead, recognize the opposite, that we are friends.  Once that is understood, then resolution will be found.  It is that simple.