INDUSTRY IN REVIEW

By Don McCurdy

Does that count as inflation?

The Tarrytown New York Board of Trustees is considering moving the regulation and enforcement of taxicabs to the Westchester County Taxi and Limousine Commission. The move would save the village money since they would no longer provide direct oversight to the industry.

The issue for the taxicab drivers is that a license will cost $135 a year instead of the $75 for three years that it costs now. Doesn't seem like much until you look at it as a percentage which is a 540% increase.

Tarrytown drivers have the usual complaints about lax enforcement, which may improve under the commission, but nobody seems to be suggesting a fare increase to cover the increase in costs. Okay, overall it's not that much, but combine that with a 100% increase in the cost of gas and increases in other costs and you have a struggling industry getting pressed even harder. If you're already not enforcing your own laws perhaps you should get out of the regulating business completely, at least you wouldn't be pretending.

Tale of two cities.

Miami has decided that it wants more taxicab drivers to accept credit cards. The program has been running since 2007 and appears to be gaining support from drivers and companies. Each credit card transaction had a $3.00 fee attached paid by the card user. What? The driver doesn't have to pay to cover the expense for the privilege of accepting a credit card? Well, it's been the law in Australia for years and nothing bad has happened. It has long been the tradition here in the US that the driver pays a percentage to accept credit cards which has always baffled me. Why wouldn't the person who is getting the benefit of not having to use cash pay for that option? Well, that's not the way we've always done it.

Boston looking to improve.

It is being reported that the Boston City Council has agreed to have public hearings on how to improve taxicab availability to "pedestrians" and increase driver income. How about that? The cost of a license to operate might be a consideration since it costs around a quarter of a million just to do business. When licensing fees are that high it makes entry into the business difficult, if not impossible. Limit the number of service providers and availability will suffer.

One of the things that attracts new participants into an industry is the idea that they can do it better and more economically. If you put a 25 million dollar price tag on the medallions to start a 100 taxicab company you've pretty much limited the entry to foreign governments or drug cartels. The little guy gets cut out of the picture completely. If you did manage to get a loan at 8% the driver would have to pay $1,800 a month for thirty years. Now, that's not to rent a facility, but to buy a vehicle, purchase a computerized dispatch system, set up radio channels, buy insurance or equip a vehicle. By the time you put all of those costs together the idea of entering the industry becomes overwhelming.

Competition spurs innovation, efficiency and good customer service. Restricted entry leads to stagnation and poor customer service. Unreliable service makes customers seek reliable alternatives, shrinking the customer base and degrading driver and industry income. It's not really that complicated. Their real problem is that they're stuck in the paradigm and don't see their fundamental problem as a problem. Drivers with medallions, other medallion owners, company owners and the city are all vested in the status quo. Good luck fixing that.

And your solution is?

Robbie Burgit, owner of one of Wilkes-Barre, Pa's taxicab companies has decided that certain areas of Wilkes-Barre were just too dangerous to go into at night and has decided not to service those areas at night. That was simple. Well, not so fast. Like any good regulatory body the Pennsylvania Public Utilities Commission stepped in and said that such a move was illegal and the company could be fined for refusing fares.

Like most government regulatory agencies the PUC has no answer to the problem, just the force of good government to see that the problem continues. So, basically if you decide you want to murder a taxicab driver in the city of Wilkes-Barre the company has to send you one.

This issue isn't isolated to the city of Wilkes-Barre or the government's position isolated to the Pennsylvania PUC. It's pretty much everywhere. Who didn't know that the owner of the company would get a public rebuke from the regulatory body? His real crime? Not keeping his mouth shut. Different solutions abound, depending on the size of the city and the size of the company. Yellow Cab in Houston installed cameras in their cabs, other companies dispatch these trips as "open" calls, with no assigned driver but anyone in the area being allowed to pick up the call. The company "dispatched" it, there just wasn't a driver available. Oh yeah, Robbie, if you take up boxing, don't lead with your chin.

Uh oh.

It appears that somebody at the "Making Sustainability Legal" research project has discovered that limiting the number of taxicabs creates poor service and higher prices. The what? Did they get a grant for that? Where's my cut? Now, I can tell that these are some bright folks because they use words like arcane and farcical to describe regulatory planning, plus, of course, they agree with me.

The project has some cool graphs and charts proving that the obvious really is just that, obvious. The problem is that the government regulates the industry. The government has never had a program that was unsuccessful, it appears. Therefore the government regulation of taxicabs must be a success. I hope this straightens things out.

Gee, who saw that coming?

How long has it been since we talked about Ocean City Maryland selling their taxicab medallions for $1,000? Maybe it's been a year, but who can remember these things? Anyway, two medallions recently sold for $6,500 and the city got a $1,625 piece of the action. Now, that's what I'm talking about, money for nothing. While the northwest seems to be coming to understand the fallacy of limiting competition, smaller towns seem to be jumping right in. One of the Ocean City councilmen is reported to be "glad to see that these medallions are finally starting to reach their true value." Well, as the price goes up so will the fares necessary to cover the additional expense to the driver for providing service. Give it a little time.

Wow, right here in America!

Who could have seen it coming, the DC Taxicab Commission has agreed to allow taping. Despite the potential for damaging national secrets being revealed the commission has relented and allows anyone to tape their sessions as long as they don't "impair" the meeting. The change in policy followed a protest by the National Press Photographers Association complaint regarding the arrest of two journalists at one of the commission's meetings. Gee, way back in the nineties Austin put their commission meetings on public access television. Well, of course that wasn't DC.

Oh, wow man, where's my backpack?

I often tell people that having been in the taxicab business I never have to make up any stories. Well, here's proof. A Wilmette, Illinois man was charged recently for possession of marijuana when he jumped from a taxicab and ran off without paying. Unfortunately, the nitwit left his backpack behind with his ID and his bong. Bummer dude.

Is it vague or is it me?

Lee County, Florida has passed an ordinance that excludes anyone who has committed a "major" crime from operating a taxicab in the county. "Major" crime? What exactly is that? One especially interesting comment was that the new ordinance "would hurt small business owners." Really? While I have heard of many places with similar ordinances I've never quite heard of one that vague. I wonder if the county would consider hiring me to watch every episode of Law and Order Major Crimes and report back with a definitive list of "major" crimes? Hey, it could happen, they passed this ordinance 5-0!

We have a winner!

Any regular reader of this column knows of my disdain for the San Francisco taxicab medallion system. I have maintained it would end up costing drivers and passengers. Well, I failed to see the potential winners in the scenario. According to Credit Union Times the San Francisco Federal Credit Union has funded loans for 100 of the new driver owned medallions. Who would have thought.

Better take a cab.

During hurricane Irene the City of New York, historically, shut down their mass transit system. The city also initiated "zone fares" and allowed livery cabs to do street hails. Isn't that nice? I guess they couldn't get the TLC inspectors out of their bunkers to enforce the rules anyway. Why not make it official? So, if you're stuck in NYC during a hurricane, forget the subway, better take a cab.

I wannabe electric!

Innovation meets regulation in Austin, Texas as Austin Electric Cab struggles to get a permit from the city to operate. The golf cart style electric carts aren't approved for service by the city for several reasons, mostly they simply don't fit into the city's taxicab ordinance.

There are several clauses that would exclude the service, the first is companies are required to have a minimum of 25 cars, be 40% owner operator, provide city wide service and a host of vehicle requirements they don't meet. They'd probably have a lot better luck if they called themselves Austin Electric Cruisers then you could argue that they weren't a method of transportation, but a tourist attraction. What's in a name?

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