INDUSTRY IN REVIEW

By Don McCurdy

Oligarchy?

In a recent article in the Las Vegas Sun the writer, Liz Benston, referred to the taxicab industry as “a controlled oligarchy.” While I’ve always considered the industry a regulated oligopoly she did send me to the dictionary to determine the difference. But, that’s not what caught my eye in the article. What caught my eye was the report that James Ashcraft is seeking unpaid wages under the state’s minimum wage law. Wow, I’ll bet the company lawyers are working on that puppy.

Las Vegas has always been a bit of a strange bird, (Vegas strange, who would have thought) in that their drivers are employees. While the argument could be made that the problem was the manner of compensation for the individual driver (individual contractor or employee) it would seem to me that the company’s own records could prove the case one way or the other. If the average "employee" is below minimum wage I would think they had a serious problem. It would seem to me that the company should already know what, exactly, their exposure could end up being between unpaid wages and unemployment.

If the unemployment office decided that the company keeping the fleet at full capacity was tantamount to a pay cut the issue could extend into the unemployment benefits arena. I’m sure the industry will be watching this case, especially since there are numerous driver “alliances” and “associations” that are anxious to convert their independent contractor status for employee status and they have a union friendly administration in power. Time will tell.

Sorry, you didn’t win.

According to reports, Santa Monica California is planning on switching to a franchise system to straighten up the chaos little regulation has created. The city intends to “bid” out franchises. My question is why go through all of that? Why not just select the four, their number, largest companies and tell the rest to pool up?

You have established companies that have been serving the city, why all the drama? There are times, I believe, that government officials at every level exist in a vacuum. The door now is open for larger companies that have not been serving the area to bid for the franchises and essentially put the local companies out of business through no fault of their own.

Hey, I realize that it’s California and all but even for California that’s a bit cavalier. The idea of having meaningful regulation is sound, but just trashing the entire industry and starting over fails to recognize that current company owners have worked hard to establish what they have. I realize that hard work isn’t as important as it once was in our country, but it seems to me that it should be of some value.

So, you want a taxi or not?

Yes we do! The city council of Jacksonville, Texas upped the fares and lowered the insurance requirements to get Jacksonville’s only taxicab service on the street. Reports are that the owner of Jacksonville Taxi Service, Samantha Pitcock, came to the startling revelation that she wouldn’t make a profit at the rates the city currently had. No shock there, the rate structure was five years old. Kind of makes you wonder why the city sets the fares at all. In a no cab town it would seem counter productive to tell someone what they can charge. But hey, that’s just me.

What, no strike?

Baltimore taxicab drivers are suing the state Public Service Commission over a planned fare cut. Rates are apparently tied to the price of gasoline and, as we all know, gasoline prices have gone down. Gee, what about the other expenses that drivers and companies have? Are they not considered?

There are some taxicab regulatory efforts that I question, others I marvel at, but this one takes the cake. Is there any other industry that takes a pay cut when one of their costs goes down? Did the Public Service Commission staff take a pay cut since it now costs them less to drive to work? I would think not. Who, exactly, is in charge of the “Public Service Commission” anyway? Is this another one of those Federal Reserve deals where citizens have no recourse over their decisions? Clearly this is an episode of “better living through government.”

They’re not taxes, they’re user fees.

Well it’s reported that the city of Boise Idaho is considering a small increase in “user fees” related to the taxicab industry. Currently, drivers are charged $5.25 to $15.50 for re-inspections. The new fee would be $224.40. Now the initial inspection fee would only go up to $74.80 from $26.00. According to the article there’s the usual whining from the drivers about not making any money and such. Like any good “user fee”, as long as it doesn’t affect the majority of voters, it should pass without a problem. Kind of reminds me of the $1.00 a pack tax Texas levied on cigarettes, it upset me so bad I quit smoking. Now I don’t have to pay.

City officials are reported to believe that increasing the re-inspection fee will help motivate drivers to keep their cars safe. All things considered this could be a big improvement in the Boise taxicab market. Over the last few years it’s been reported that there are too many cabs on Boise’s streets. This just may help clear that up.

Good news for the Philadelphia Parking Authority!

Apparently someone besides a PPA member is having legal problems. In a story out of New York City it’s being reported that Jay L. Turoff has been sentenced to four months in a federal prison for income tax fraud. Turoff is reported to have risen to the lofty perch of head of the NYC Taxi and Limousine Commission after years of being a community activist in the Brooklyn Democratic Party. The judge apparently didn’t believe Turoff’s defense that he was only positioning himself for a position in the Obama administration. Okay, I made that part up. With the chump change amount of $3,900 he wouldn’t have qualified anyway. If you can’t cheat the government out of more than that how in the world are you ever going to gain the respect of your government staff?

So, how were they going to collect that?

It’s being reported that the governor of New York, David Paterson, is dropping a recommended tax on taxicab rides. The governor suggested several taxes as a solution to the budget shortfall. It appears now that the economic stimulus money will be used to bridge the gap instead of a host of new taxes proposed by the governor whose popularity is reported at an all time low. What a coincidence. I guess the governor has learned what the Boise City Council already knows. In a way, you would have to declare this a victory for the Republicans in Congress, they got some taxes cut after all. Who would have thought.

RideProvide won’t be providing rides.

The Morris County New Jersey program that provides taxi rides for seniors is reported to be closing down. RideProvide funding was provided by grants and the money just isn’t there explains TransOptions President John Ciaffone. While it’s hard to believe such a worthy program was overlooked, it appears that the economic stimulus package failed to address the needs of New Jersey seniors. Perhaps the $225,000 necessary to fund the service just wasn’t enough to attract their congressman’s attention.

—dmc

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