INDUSTRY IN REVIEW

By Don McCurdy

So what is the magic number?

There is reported to be a crackdown, although police officials deny it, on livery vehicles in Worcester, Massachusetts. Liveries are supposed to only provide service with 12 hours advance notice and the taxicab companies believe the livery companies are not in compliance.

Currently there are 110 taxicab medallions operating in the city which medallion holders claim is enough. Really? What would medallion holders claim if you asked them if there should be more medallions added? What would McDonalds claim if you asked them if there needed to be more hamburger joints?

Samuel Rosario, acting on behalf of two of the livery companies, has requested 72 taxicab medallions be added. He also said that a group called "Citizens for Quality Transportation" will "fight" for improving the quantity, quality and condition of current vehicles. The city council didn't buy the story though. Sounds to me like a new competitor wants to come to town, the government regulations won't let it and the stagnant industry is protecting the status quo. Pretty much happens all over the country. I'm not really sure how this is even news.

The scam is in motion.

The staff at DFW (Dallas-Fort Worth) Airport is reported to have told the board members that "the only way" for them to have any quality control is to award a concession to one company. What the real story appears to be is that the staff couldn't get away with their natural gas priority scam so they're trying another end run around the smaller companies so their buddies can bid on an "exclusive" contract. All pretty obvious stuff. The board will probably rubber stamp the proposal, a request for proposals will go out and wow, the company they tried to give priority with the natural gas scam will win the bid with the best proposal. How obvious.

Airports all over the country have found other ways to maintain quality control without going to a concession, but who cares about that. Are the cabs in Dallas and Fort Worth so skanky that "quality control" measures are necessary at the airport? The staff also said that they could then require credit card readers and GPS so they could make sure drivers took the shortest route. Well, aren't they fortunate, the company with all of the natural gas cabs already has credit card readers and GPS. Now, how lucky is that? This is almost as obvious as the Chicago Carbon Exchange "climate change" scam.

Surprise, surprise, surprise.

It is being reported that Shreveport, Louisiana has decided that it needs to revamp the city's taxicab code. How about that? I guess receiving national attention for allowing sex offenders to drive taxicabs hasn't been good for tourism there. Who can say about these things? Realistically, the mandate for regulation of private industry is public safety.

Many times I've commented that I have no issue with thoughtful regulation, but regulation has gotten way out of hand. As a business traveler I applauded New York City for requiring taxicabs to take credit cards, but looking back I see that position as wrong. It doesn't involve public safety, it involves public convenience. There is a substantial difference. If there was a groundswell of demand for credit card acceptance a provider would have stepped up to provide that service.

The regulations controlling the number of taxicabs often stifles the competition necessary to bring about broad changes in behavior, but that is the price of regulation, more regulation. When it's all said and done the price of regulation ends up costing more than the taxi ride portion of the fare. "Free" enterprise is pretty much lost to the taxicab industry in most cities.

Speaking of "public safety."

It's being reported that Ocean City, Maryland is revising their medallion scam, er scheme, to up the transfer fee on medallions to $500 or 25% of the transfer amount, whichever is greater. This after one of the drivers wanted to transfer his $1500 medallion to another driver for $1. It seems that the city thinks the medallion holders might attempt to cheat the city out of their chance to wet their beak on medallion transfers. Makes you wonder if all of the businesses in Ocean City are going to be forced to let the city wet their beak if they transfer owners or if the city will make them an offer they can't refuse if they don't pay.

The entire affair took on a bit of a carnival side show air when it was discovered that the transferring medallion owner hadn't gotten his cab on line in the required 30 days. It certainly didn't help when one of the owners called the city council "greedy bastards" in the press. Of course, the city council had the last laugh compelling the owner to apologize and retract his earlier statements. Gee, Ray, how about a nice anger management class? Popping off in the press about the regulatory body is rarely going to end well. But, hey, at least the public is safe.

Speaking of wetting their beak.

It's been reported that the "capo di tutti capi" of government collection enforcers, the IRS, is now compelling Las Vegas strip clubs to issue 1099's to limousine and taxicab drivers that get kickbacks for delivering passengers to their club. In theory, drivers should now be giving doormen 1099's when the drivers give them cash for directing strip club clients their way. In a way, the entire affair is funny, but in another, it's not.

What does it say about a hotel when it looks the other way while their staff assists in the bilking of their customers? Is it that the city is simply so corrupt that it's accepted that employees are going to screw the guests every chance they get? It's reported that the MGM Grand doorman actually directs the passengers to "free" limousines that bypass the taxicab line altogether. No honor among thieves. According to the report, sorry no evidence provided, Steve Wynn disallows the strip club/doorman scam at his properties. Good onya, Steve, now how do you enforce it?

I don't know doodley about the hotel business, but I know a lot of taxicab companies that don't allow a lot of things that happen every day. According to the story, brothels, another source of driver kickbacks, have been giving drivers 1099's for a long time. But, the really amazing part of the story is that club owners appear relieved that the IRS is investigating.

Seeya, Matt.

New York Post writer Steve Cuozzo toasted the departure of outgoing TLC commissioner Matthew Daus with a scathing commentary pointing up a topic that I find dear to my heart, regulation without enforcement. No, I'm not talking about stings with cops dressed up like gangbangers to see if taxicab drivers are brain dead enough to pick them up, I'm talking about real enforcement. Without enforcement regulation is for the willing.

Cuozzo points up another situation, he doesn't take cabs unless he has to, electing for other forms of transportation if available. It has long been a contention of mine that nobody really knows the size the pie can be if not properly handled. Allowing drivers to alienate customers makes it harder for the other drivers to make a living. New York long ago took away the ability of
competitors to enter the marketplace with new and better ideas.

The homogenous New York City yellow cab gets no benefit from competition since customers can't call their favorite company, they can only move to another type of vehicle. Personally, I don't like to be compelled to do business with a company I don't get to select from legitimate competitors, but I doubt that the new commissioner will be able to fix that. Suffice to say that he will have his hands full since the drivers hate the TLC, the customers hate the drivers and he wants to sell more of these valuable medallions to help out in these difficult financial times. Good Luck, Dave, you're gonna need it.

Well, it's working in Seattle, sort of.

Reports out of Seattle are that the new contract between Yellow Cab and the Port of Seattle to provide on demand taxicab service to Sea-Tac Airport is on hold pending the outcome of lawsuits over the RFP process. Since exclusive rights at any airport is a license to print money it's no wonder there are lawsuits following so many contract awards. Seattle is a bit of a different deal in that they already had a single provider. The lawsuits, some of which sound very interesting, are from the old provider who is a bit tweaked at the way the process went down. With Seattle and New Orleans as examples of how wonderful life can be with a single provider it's no wonder DFW is wanting in on the game.

How about that.

Reports from the Muskogee Phoenix newspaper are that the city council is rescinding their taxicab ordinance. Mayor John Hammons believes the law of supply and demand should set the number of taxicabs, not the city. He went further to say that to do otherwise "is bad for growth, is bad for business and is bad economic policy." Companies will still have to meet licensing and insurance requirements and one of the councilors is reported to have said that council's main concern is "public's health and safety." I guess they don't realize they can extort money from the industry for medallions or that more regulation is better. I wonder if this guy will ever run for president?

But it feels good.

New York City Assemblyman Micah Kellner is reported to have issued a not so glowing report of the city's livery policy regarding disabled riders. "It's designed to fail on all levels, it's a rule to make people feel good. It's not a rule to get anybody anywhere" he is reported as saying. Interestingly, the TLC wasn't enforcing the rules at all until December of last year. Hmm, regulation without enforcement, where have I heard that before?

Instead of simply requiring a minimum number wheelchair vehicles for each company the city allowed contracting with a third party. Well, the third party doesn't appear to be regulated. What? How can that be? Something in New York City that's not regulated? They need to start selling medallions for that service. There might be millions to be made! The companies providing the "third party" service are charging more than the livery companies they contract with which is not allowed by the rule. Kellner wants the commission to rewrite the rule to better serve the public and the industry. What? That sounds way too logical. I suppose next he'll be wanting them to enforce the rules.

Oops.

According to published reports the Philadelphia Parking Authority (PPA) improperly established their rules so they are unable to enforce them. Is that all? The PPA has, in my opinion, been operating more as a terrorist organization than a regulatory authority anyway. Their heavy handed treatment of the elected driver representative is only missing the official repression indictment to be exposed for what it is and has been.

Ron Blount, head of the local chapter of the Taxi Workers Alliance, has stated that his group will still abide by the rules until the matter is settled. Gee, that's considerably more gracious than the PPA who pursued charges against Blount even after his acquittal in court. I don't know who the PPA reports to, but somebody needs to help the group understand that regulation doesn't equal control. A little respect for those in the industry would go a long way in getting cooperation and a workable set of rules. The PPA's Gestapo like tactics aren't serving the riding public, just their own egos.

If you have any comments regarding this or any of my articles please feel free to contact me at dmc@cmcauto.net. —dmc