INDUSTRY IN REVIEW

By Don McCurdy

 

Dallas Does Drivers

In a move that would surely warm NYC Mayor Bloomberg's heart the Dallas City Council voted to place taxicabs powered by natural gas at the front of the line at Love Field in Dallas, legislation the taxicab companies are willing to meet. While the need for clean air and water is apparent, the benefit from the legislation relative to the amount of grief the legislation caused many of those involved with the city initiative, however, is difficult to understand.

The independent drivers of Dallas have organized several protests against this new legislation including New Year's Eve and Super Bowl Sunday. As a recovering taxicab driver I can promise you that no driver would strike during either of those two events unless the issue was critical to their survival.

I certainly cannot believe that Mayor Leppert, holder of an MBA from Havvvad, doesn't realize the tremendous disadvantage he has handed the independent taxicab drivers of Dallas. Apparently, he simply doesn't care what effect his policies have on small businesses. No doubt, independent drivers simply don't have the same financial resources the big taxicab companies do when it comes to political donations. Truly, Dallas is blessed having a New York City born, east and west coast educated "leader" to help them break loose from their backward ways of hard working, independent, small business and into the deep pocket perks of the company cronies.

His comments that "it won't cost the city a dime" and he "hopes it starts a trend" demonstrate just the type of big government "solutions" that have the Dallas economy in the terrible financial condition it's in. It isn't going to make any difference to clean air, but it sure makes hizzon-or-less look trendy. No doubt, a real "let them eat cake" moment when the Dallas City Hall declared it wasn't worried about the driver's threat to boycott the Super Bowl. I hear there's an opening for president of Egypt.

Unrest and home to roost.

Chicago recently reinstated their $1.00 surcharge on taxicab fares when gas prices passed $3.20 for seven straight days. Concerns are that gas prices are headed higher due to the unrest in the middle east and an incoherent drilling policy here in the US. In the words of Chicago's own Reverend Wright, it looks like "America's chickens have come home to roost."

Now, I'm not a finance major or a politician, but it seems to me that if you leased some of the land the federal government owns - yes, that would be you and me - for drilling the royalties could help balance the budget if properly structured. I know, pristine wilderness and ecofriendly spaces are way more important than the financial collapse of the country. The time is fast approaching when practical reality and junk science are going to collide for a spectacular show. Hopefully soon.

For the good of the industry.

It's reported that the largest taxicab companies in Columbia, South Carolina are proposing a limit to the minimum number of cabs allowed at a company. While only four of the 21 current taxicab companies are reported to have more than 15 cabs the largest companies want to make the minimum 25 cabs.

The mayor, Steve Benjamin, is reported to have been the motivation behind the "Economic and Community Development Committee" looking into changing the city's taxicab regulations. The draft ordinance is reportedly written by the attorney of Checker Yellow, one of the four companies with over 15 cabs. Conveniently, the attorney, Checker Yellow and Original Blue Ribbon Taxi are all reported to have donated to the mayor's election campaign. What an amazing coincidence! I wonder if I would get to write any laws if I donated to the mayor's campaign?

The best part of the story, at least for me, was the attorney's comment to the council, "you're going to have to raise the bar on the taxi business." Really? It sounds to me like they need to raise the bar on the mayoral candidates.

Taxicab companies desiring increased regulation are usually up to one thing, somehow restricting their competition. It never fails that hidden inside "raising the bar" is lowering the competition. Looks pretty simple to me, another political donor cashing in on their political favors. Happens all the time.

Drivers looking for a raise, but is it?

San Francisco taxicab drivers are requesting a fare increase. Nothing too strange there, taxicab drivers request fare increases all the time, ask the Chicago drivers. The odd thing here is that the Metropolitan Transit Authority (MTA), hey, aren't they kind of competitors, is also looking for a way to generate some additional revenue. The MTA's suggestion - sell more taxicab medallions.

Now, the MTA sold the last batch starting at $250k, and they need about $10 mil, so it would follow that they should sell around 40 new permits. In effect, the MTA has the ability to raise the meter rates and get the bulk of the fare increase for themselves. Not only that, since there will be an additional 40 cabs on the street the drivers have the potential to lose money on the fare increase because they'll have 40 more cabs wanting a slice of the pie. Now, that's clearly an example of smart regulation. Hats off to ya, MTA!

Good corporate citizens.

How about those good corporate citizens at Metro Cab of Denver, donating $10,000 to Mayor Hickenlooper's inauguration as governor? You often hear people complain that taxicab companies are evil or crooked, like trying to raise the bar and stuff, but you rarely hear about taxicab companies donating to political figures, even if the politician was reported to have helped "stymy" a potential competitor from getting a license. The reason you don't much hear about it is because it's rarely done so blatantly. Did I mention it happens all the time?

Bloomy proposes denting tin.

Yellow cab drivers in NYC are reported to be up in arms over a proposal from the mayor to allow livery vehicles to pick up fares in the outer boroughs. It's an interesting study in regulation. If my recollection of history is correct the reason Yellow Cabs were denied the ability to be dispatched was so they would cover only flags, hails. Which leads us to one of my favorite adages, never make a deal with the government.

The problem with making a deal with the government is that they can change the rules any time they please, as in this case. Medallion owners have paid hundreds of thousands of dollars for exclusive rights to flag trips. Yes, it is difficult if not impossible to flag a cab off Manhattan, but that exclusive right is what they've been paying for all of these years. Now comes the next politician and the rules change. If livery cars can pick up flags in every borough other than Manhattan is there going to be a refund to the existing medallion holders for the loss of exclusive territory? Of course not. Will yellow cabs be allowed to dispatch again? Of course not.

The city had to find a way to deal with the unintended consequences of their attempts to "raise the bar" on the industry way back when they decided that yellow cabs should only do flags. You have to wonder how many cabs there would be if the city had just left the industry alone and allowed it to grow without the flag only stipulation. Yellow taxis would have been dispatched throughout the five boroughs and could have been increased to meet demand. The Black Car /Limousine industry with its voucher system would not have been affected.

I'm sure that the TLC and the various mayors have all thought they were great stewards of the industry, just like congress dreams it's the "great steward" of the people's money. Oops, I forgot, they think it's the government's money.

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