A review of the method and structure of taxicab regulations in representative communities in Florida and other states

A review of the method and structure of taxicab regulations in representative communities in Florida and other states

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A review of the method and structure of taxicab regulations in representative communities in Florida and other states
Jones, F. Ron
University of South Florida -- Center for Urban Transportation Research
Place of Publication:
[Tampa, Fla.]
University of South Florida, Center for Urban Transportation Research
Publication Date:
Physical Description:
1 online resource (38 leaves). : ;


Subjects / Keywords:
Taxicabs -- Licenses -- United States ( lcsh )
Taxicabs -- Law and legislation -- United States ( lcsh )
bibliography ( marcgt )
non-fiction ( marcgt )


Includes bibliographical references (leaves 29-38).
General Note:
Title from cover of e-book (viewed Aug. 4, 2011).
General Note:
At head of title: Draft report.
General Note:
"Prepared for the Florida Legislature."
General Note:
"February 1999."
Statement of Responsibility:
prepared by the Center for Urban Transportation Research, College of Engineering, University of South Florida ; F. Ron Jones, project director.

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University of South Florida Library
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University of South Florida
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All applicable rights reserved by the source institution and holding location.
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029394896 ( ALEPH )
745105525 ( OCLC )
C01-00208 ( USFLDC DOI )
c1.208 ( USFLDC Handle )

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A review of the method and structure of taxicab regulations in representative communities in Florida and other states
h [electronic resource] /
prepared by the Center for Urban Transportation Research, College of Engineering, University of South Florida ; F. Ron Jones, project director.
[Tampa, Fla.] :
b University of South Florida, Center for Urban Transportation Research,
1 online resource (38 leaves).
Title from cover of e-book (viewed Aug. 4, 2011).
At head of title: Draft report.
"Prepared for the Florida Legislature."
"February 1999."
Includes bibliographical references (leaves 29-38).
x Licenses
z United States.
Law and legislation
United States.
1 700
Jones, F. Ron.
University of South Florida.
Center for Urban Transportation Research.
i Print version:
t review of the method and structure of taxicab regulations in representative communities in Florida and other states.
d Tampa : University of South Florida, Center for Urban Transportation Research, [1999]
w (OCoLC)298452164
Center for Urban Transportation Research Publications [USF].
4 856
u http://digital.lib.usf.edu/?c1.208


Draft Report A Review of the Method and Structure of Taxicab Regulations in Representative Communities in Florida and Other States Prepared for the Florida Legislature Prepared by the Center for Urban Transportation Research College of Engineering University of South Florida February 1999


A Revjew of the Method end structure of Taxicab RegulatiOns jn Representative Communities in Florida and Other States Center for Urban Transportation Research USF College of En gineering 4202 E. Fowler Avenue, CUT I 00 Tampa, FL 33620 CUTR Project Team: F.. Ron Jo nes Ph.D. Project Director Xuehao Chu, Ph.D. Robert O'Donnell Gary L. Brosch, Director II


A Review of the Method 11nd Structuro of Taxi cab RcgulcWons in R9presenlaliWJ Communiti8s in Flotida and Other States Table o f Contents Introduc t ion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I Defmitions and Scope .... . ...... ....... ..... . . .... ... .. .. ...... . . . .... 1 Rationale for Regulation and Deregulation ........ ............ ...... . ... . . 3 Historical Experience with Deregulation . . ......... .. . ... ........ ...... . 4 The Current Situation ...... ............... .... . . . ....................... 6 Case Study 1: Hillsborough County, Fla . .............. . . . ... .... . . . 10 Case Study 2: Broward County, F la. ............... ....... ................. 10 Case Study 3: Miami-Dade County, Fla. ........ ..................... ........ II Case Study 4: St. Petersburg Fla. ............................................. 12 Case Study 5: Cincinnati, Ohio .................... ... ............... ...... 13 Case Study 6 : Davidson County (Nashville), Tenn ............. .... ....... . . . 13 Case StUdy 7: Indianapolis, ind ............ ........ .. ................... .... 1 4 Case Study 8: Los Angles, Cali f . .... . . ............................. ..... 15 Case Study 9: Portland, Ore. . . . . . . . . . . . . . . . . . . . . . . . 15 Case Study 10: Seattle Wash .... ...... ............... ... . ............ .... 16 Case Study II: Miscellaneous States ............. ........ . .... . . ...... 17 Case Study 12: Miscellaneous Independent Commissions ........ ........ . .... 19 Advantages and Disadvantages of Different Approaches ............. ....... ... ... 23 Regulatory Structure . ........... ..... . . ............. ........... . . . 23 Geographic Coverage of Regulatory Body ............... ....................... 24 Entry Regulation. ............. ........... ... . ....................... 24 Fare Regulation ...................... .... . ... .... ........ ... : ..... 26 Swrunary .............. .......... ............ ..... : .......... ...... .... 27 References ......... ........ .... : . .... ............................... .... 29 Codes and Ordinances ...................... .................... .......... 33 l1l


Introduction A or 1/Jo MethOd and Sftuetute of Taxicab Regulations In Representative Commuftlllcs ID FkJrids snd Other States The Center for Urban Transportation Research at the Uni versity of South Florida in Tampa was asked by the Florida Legislature to review the various methods and structures of taxicab regulation in representative communities and to outline the advantages and disadvantages of the different approaches but to make no recommendat ion as to which app roach is best Tor any particular community. How best to regulate the taxicab industry is an acknowledged difficult problem as evidenced by a cautionary note provided by Charles Mahtesian in Governing magazine: Anyone who thinks the problem is solved doesn t know much about the taxicab business in America Over the past half-century, cities have experimented with just about every form of taxi oversight, from rigid supervision to virtuallaissez-faire. All of the strategies have had one element in common: They haven t worked very well. Hard l y any city seems to be able to figure out how to provide its residents with uniformly clean, safe, reliable and courteous cab service. A t the moment, the tax icab industry is going through a period of confusion in cities all over the country. Some, like Seatt le are turning back to regulation after failed experiments at lifting it. Others are deregulating in varying degree, hoping to improve service by breaking up long-standing monopoly power (Mahtesian, December 1998, pp. 2 6) This white pape r is intended as a resource for Florida policymakers who are faced with issues relating to taxicab regulation. The first section of the report discilsses the general approac hes to ta.xicab regulation. The second section presents the basic arguments for and against taxicab regulation. The results of the widespread d eregulat ion experiments that took place in the U .S. during the late 1970s and the early 1980s and the implications for future changes in taxicab regulation are discussed next That is followed by a description of some of the current attempts to modifY regulations and by several current case studies The report concludes with an out line of the advantages and disadvantages of the different approaches and a brief summary. Definitions and Scope The primary areas of taxicab regulation are market entry, fares safety and insurance, and service practices and quality. Deregulation of the taxicab industry typically refers to "economic" deregulation. That is, safety and insurance requirements, and service practices and quality, generally are not relaxed when other aspects of the industry are deregulated although the level of enforcement does vary I


A R9view of th9 Method and structure of Taxfcab Regulations in Reprosentativs Communities in Florida and Other States significantly among jurisdictions regardless of regulatory approach. Consequently; the areas of regulation that are addressed in this report are entry and fares. Service regulation is addressed to the extent it affects ease of entry. Entry regu l ation typ i cally includes a requirement that a new applicant prove t h at there is a need for the taxicab service that he or she proposes to provide. Some jurisdictions instead place a limit on the total number of taxicab permits issued and revise the total very infrequently. Other jurisdictions tie the number of permits to local population and adjust the number annually. T hese new permits sometimes are distributed among qualified app li cants by lottery. Service regulations that can affect the ease of entry i n to the industry include such things as fleet siz e hours and geographic area of operation and age of vehicles. F are regulation usually means that the regulatory body se t s the rates i.e., the fares are fixed. In a semi-deregulated environment, the regulatory body may set fare maximums and allow the individual operators to charge whatever they wish up to the maximum. Bet\veen the extremes of full regulat i on (also referred to as r estricted entry) and full deregulation (also referred to as open entry) of the taxicab industry tl1ere is a continuum o f differen t approaches. A common approach between the extremes is the m inimum standards approach: For comparison purposes this report focuses primarily on three regulatory approaches: full regulation, full deregula t ion, and minimum standards. The minimum standards approach, as defined in a North Carolina State University report: .. involves developing, implementing, and enforcing compliance with a set of performance standards for t axicab co m panies, taxicab drivers, and taxicab vehicles. Industry members are held accountable for meeting well-defined criteria. If a company meets the required criteria, there is no limit o n the n umber of vehicles which can be placed in service. The number of vehicles in service is allowed to fluctuate according to market demand. Those com p anies which provide superior service will likely increase fleet to meet increased demand. A company which provides substandard service will likely see reductio ns in its.fleet as customers increasingly use vehicles from companies which provide better service. (Institute for Transportation Research and Education, 1996, p. 16) The regulatory body typically is either an independent commission, a department of local government, or a department of state gove rnment An independent commission can be limited to taxicab regulation or can regulate other services as well, s uch as ambulances and wreckers. Regulation by local or state government can be housed \vithin a single department or distributed among departments, such as the police department for safety enforcement and another department for permitting. A related issue is the geographic coverage of the regulatory body, e.g., city versus county versus regional. 2


February 17, 1999 The H ono rable James T Hargrett Jr. The Florida Sena t e Room 330, Senate Office Building Tallahassee Florida 32399-1100 Dear Senator 1-Iargrett: Center for Urban Transportation Researt:h University ol South Florid: 4202 East Fowle r Avenue, CUT IOC Tampa Florida 33620-537! (813) 9743)2( S unCom Fax (813) 974-516! Web: httt>11www.rutt.eng.us{.ed1 As you requested, we h ave reviewed the methods of taxicab regulation in representative communities in Florida and other states and have analyzed the advantages and disadvantages of the different approaches. We a l so have reviewed and summarized the literature o n taxicab regulation. Our draft report is enclosed for your reference and review. As specified in your request, we have drawn no conclusions nor made any recommendations. However, we sh all be glad to discus s the report and our informat io n with you in more depth if you wish. As you suggested, we also are sending a copy of the draft report to the staff of the Office of Program Policy An al ysis and Government Accountability for their reference and we will be glad to wor k with them on any further analysi s that needs to be don e. We have appreciated the opportunity to be of service, and we hope th a t our report mee ts your needs. I f we may be of further service, please let me know. Sincerely, Gary L Brosch Director Enclosure cc: Alex Regalado, OPPAGA


A Rovi6w of the Method and Struclure of RegulatiOns In Ropresentatl've Commul)itjos in F1Mda and Other states Rationale for Regulation The historic rationa le for regulation of the tax i cab industry i s founded in economic principles r:egardill,g p u blic goods and monopolistic market conditions, as in the case of utiliti e s and most transportat i on companies. Whether or not the taxicab industry meets the criteria that justify regulation is the subject of a long-runn ing debate. However the issue of interest here is the empirical question o f how regulations and regulatory bodies can be modified t o optimize the taxicab service received by the public. The argwnent for deregulation of transp orta tion industries is well known and i s based on the belief that comp eti tion will lead to lower fares, improved s e rvice, and innovation. These results have been seen in some transportation ind u stries that have been deregulated, but there is concern t h at the taxicab industrY may be sufficiently d iffere nt th at the results wi ll not be the same, as noted in a report by Roger T eal: The impacts of taxi dereg ulation are in stark contrast to the largely positive results of deregulation of other American transportation industries. ... I n the o the r deregulated tran sport ation indus tri es entry costs were substantial (and in so m e cases, very high), th ere was abundant scope for reductions in labor costs and improvements in labor productiv i ty due to high wage s and rig id wor k ru les which h ad developed under regulation, and the market was growing, in some cases rapidly (the one excep tion was in terc ity bus serv i ce) Thus there was room in 1.\le marke t for new competitors there were cost-based opportunities for price reductions, and the rel ative l y l arge capital req u iremen t t o enter the industrY p laced a defini t e limi t on the number of new entrants The taxi industrY, in contrast, is distinguished by very low e ntrY costs, the virtual absence of for lab or productivity or cost im prov ements, and a stagnant level of demand. Combine these characteristics with the existence of "guaranteed" markets for an individu a l taxi operator, nota bly airports and tax i stands-where the customary first-in, first-out op eratio n essentially guarantees customers providing the operator is willing to endure potentia lly l engthy wa i ts--and one has a re cipe for uns uccessful dereg ulat ion. Low e ntrY costs, an inhe rent characteristic of a totally d ereg ula ted taxi industry, represent the factor which is probably of greatest significance in pre v e n t ing a more successful o u tcome to taxi deregulation. Beca use capital requirements to enter th e deregulated industry are minimal, virtually any self-motivated individual can bec ome a tax i operator. Indiv id ual operators cannot effectively compete in the telephone orde r market, however, so they q uickl y over su bscribe the airport and cabstand markets, causing full-service companies to abandon these markets excep t for passenger drop-offs. This results in a reduction in economies of . 3


A Review of tho Method and structure of Taxicab Regulations in Reptesentab'vo Communities in Flotlda and Other States scope for the full-service operators. With demand for taxi service stagnant or even declining, operator p r oductivity inevitably declines with many more operators in the market. Productivity enhancing innovations -which essentially require grouping more passengers together--are largely infeasible. The market is both too small (and is stagnant as well) and too intermodally competitive with rental cars, subsidized public transit, and the private automobile for such innovations--which reduce level of service, but do not reduce prices dramatically--to succeed. Pcice reductions therefore become economically infeasible; indeed, the pressure on prices is upwards due to a reduction in economies of scope for full-service operators and the peculiar characteristics of cabstand markets. ( T eal 1993, pp. 136-137) Thus, the challenge is to identify the most appropriate types and levels of regulation that produce a high quality service that meets local needs in a manner consistent with local conditions and values. The next section discusses somewhat radica l approaches that seem not to have worked That is followed by a section. discussing the more moder ate or incremental approaches currently being tried in several cities. Historical Experience with Deregulation In the late 1970s and early 1980s, the taxicab industry was deregulated to varying degrees in a number of U.S. cities. The results of those experiments did not live up to the expectations of the proponents for deregulation. Why they did not is still a matter of debate. Quite possibly the deregulation was too extensive in some cities and poorly designed in others and the lessons learned might allow for more successful deregulation in the future. However, Roger Teal, the author of comprehensive analysis of those experiments, paints a rather dim p i cture for future success: From the perspective of creating consumer benefits, taxicab deregulat i on has clearly been a disappointing policy. Taxi rates are generally the same or higher compared to wha t they would have been with a regulated industry, level of service has improved marginally, if at all (and seems to have declined in certain respects), and innovative services have not been developed. It has been difficult to detect any significant con. sumer benefits resulting from deregulation. .. While transportation policy analysts and economists may continue to debate differing in terpretations of the resu lts of the deregulation experiences, the political debate about taxicab deregulation appears to be largely over. The two most prominent American cities to deregulate their taxi industries, San Diego and Seattle, have radically altered their initial policies Both cities have reimposed entry restrictions, and also placed rest rictio n s on the 4


A Review of the Method and SllliCiute of TexiC8b in RepteoontabVc COmmunities fn Ftotidtr and Other St8tcs ma.ximurn fare rate The problems caused by the continual turnover of small operators in the deregulated industry was an important reason for the se changes. It bears mentioning that citywide deregulation was abandoned in San Diego and Seattle even though airport authorities in both cities had previously imposed entry and/or fare restriction in the airport taxi market; deregulation was not abandoned in order to eliminate ai.rport taxi problems. Rather, it fell out of political favor because no significant benefits to consumers were apparent. .. and there were adverse economic impacts on the local taxi industry .. Where taxicab deregulat ion policies have not been radically altered, it is usually because they imposed requirements which served to limit entrance to the industry, and t hus the p ro blems caused by substantial and continual small operator turnover did not materialize. (Teal, 1992, pp. 131, 137) A Price Waterhouse analysis of six cities th at deregulated arrived at essentially th e same conclusions as far as short-term effects are concerned: Although the supply of taxi services expanded dramatically, only marginal service improvements were experience by consumers. .. most new service was concentrated at already well-served locations--such as airports and major cabstands.... Response times in the telephone market were similar to pre-deregulation performanc e. Trip refusals and no-shows, however increased significantly .... Prices rose in every instance .... Service quality declined. (Price Waterhouse, 1993, pp. i-ii) Price Waterhouse's conclusion about long-term effects was that there was no effect on fares and that there was not sufficient data to m easure any effect on service quality but that "in retrospect, the effects of taxi deregulation have ranged from benign to adverse, depending on local conditions and markets .... (Price Waterhouse, 1993, p. iiq Seattle deregulated its taxicab industry in 1979 and, according to the Charles Mahtesian article in Governing magazine: It worked--in a way. Within a couple of years after deregulation, the number of taxi li censes in Seattle more than doubled, leaping from about 400 to 850. But the service didn't get better, it got worse. By the early 1990s, it had reached a state of crisis. Passengers were complaining of old, damaged and dirty vehicles. Th e drivers they encountered were not only rude but in some cases poorly groomed, barely able to speak English and clueless about local landmarks and common destinations. 5


A Revtew of thQ MethOd tlnd Structure of Taxlcsb RegulatiOns Jn RcpteSilntaUvo Communities in Flonda and Other StatDs "The streets were full of hacks, but the drivers commonly refused customers for short trips or bypassed them because of the color of their skin. Those who got into a cab could never quite be sure of the fares, since those varied between taxi operators, even for identical destinations. Fights between drivers--and drivers and passengers-became so commonplace at one hotel taxi stand tha t management finally banned cabs from the property altogether. From that point on, guests had to walk away from the hotel an d bail a taxi on the street. By 1995, says city council aide Dan McGrady, the system had broken down so completely that even the taxi companies were asking for reform. "It was a horrific problem," he sa ys. "The hospitality industry was saying the taxi industry stinks and we're losing job s an d visitors." At that point, Seattle's government bad to do something. So in 1997, it went back to strict regulation. (Mahtesian, December !998, p. 26) Atlanta is another example of a failed experiment according to Multisysterns: Atlanta [chose] to reimpose regulation of entry control into the taxicab market because the overwhelming local consensus was that deregulation was not worki.ng. The immediate problem associated with deregulation was that, although it was introduced in response to a legitimate (civil rights) problem, it served as a legal sanction to creation of an oversupply of taxicabs. The consequences of this oversupply were an unstable business environme nt for the indu stry, and poor serv ice quality for the public. The effect of the oversupply on reducing driver earning potential is likely responsibl e for the reportedly low quality of drivers, as reflected in typical complaints about problems such as overcharging, discourteous behavior, etc. The severity of the situation which developed in Atlanta is best demonstrated by the energy which the business community u ltimately was willing to devote to constructive regulatory reform. (Multisys tems, 1982, pp. ili-iv) According to Paul Dcmsey, a law professor at the U niversity who has studied the taxi industry, "Virtually every major city which has tasted economic deregulation of the taxi industry has Jived to regret it. I t has been a disaster. It is extremely difficult to have anything resembling a normal market in the taxicab business." (Mahtesian, December 1998, p. 28) The Current Situation As noted in the introduction, local governments continue to try to find the answer. The latest attempts to improve service by modifying regulations are taking a more incremental approach 6


A Review of the Method and Structul& of Taxicab Regulations in R9pres&ntativs CommUIIities ;n Florida tmd Other States than seen in the wholesale deregulation of the 1970s and 1980s. The basic approach is to ease entry restrictions while maintaining or even tightening minimum standards for practices and quality 1'ypically with some exceptions, fares continue to be set by the regulatory body or to be subject to maximums. Charles Mahtesian commented on some of these recent efforts : In Miami-Dad e County, frequent complaints about decrepit old taxis and rude drivers persuaded local officials to issue age limits for vehicles and offer 125 [sic] new licenses [ov er five years], opening the market for taxi medallions for the first time in years: San Franc isco another city desperately seeking improved service, has raised the cap on the city's fleet by issuing 300 new permits Cincinnati, Denver and Portland, Oregon, are also an10ng those to have recently opened entry to their once tightly regulated taxi markets. In Denver, a lawsuit opened the market in 1995 to the city's first new cab company in nearly 50 years. Cincinnati lifted an unofficial cap on the number of taxi licenses, and, in its most important reform, ended the ability of existing taxi companies to b lock new entrants. Prior to 1995, existing companies could shut out new competition simply by claiming that new drivers would hurt their business. Portland opened its taxi market by deleting a few words in the city code that for years served as an almost insurmou ntable barrier to entry. . Indianapolis is often cited as one place where an unrestricted taxi market is thriving. When the city deregulated taxi licensing in 1994-for a second time--about three-quarters of the city's 392 cabs were directly or indirectly controlled by one company. Close fo 85 new cab companies have started up since then, many owned by women or minorities "The two major consequences are that there are more cabs and you are starting to see some significant rate cutting. So you have better service at lower prices," says Bill Styring ofthe Hudson Institute, who chaired tbe study commission that designed the new system. There is zero public preS:Sure to undo this." (Mahtesian, December 1998, pp. 28-2 9 ) [Note in the Indiana polis case study in the next section that city staff is somewhat less sanguine about the results.) The current situation for numerous jurisdictions in Florida and other states is summarized and compared in table I. As noted elsewhere, the minimum standards referred to in the table are criteria that may forrn significant barriers to entry, s uch as minimum fleet size and a requirement that 24-hour service be provided. The number of companies shown in the table includes i ndependent cab operators, each of whom is a one-person business, which is why <,:olumbus, for example, is shown as having 171 taxicab companies. The five-mile fare is based on mileage and does not include waiting time ch arges, etc In the cases where deregulation has resulted in different companies charging different fares, the median five-mile fare is shown. For communities where fares are deregulated but subject to maximums, the maximum five-mile fare is shown. Da ta for the table were obtained from local codes and ord inances and from telephone in terviews with local officials. 7


A ReView 01 th9 Method IJnd Struct l/(9 of Tax icab Regulations in Rtpresenfative Ct>mmunities in Florida and Other States Tabl e 1. Status of Entry a n d Far e Regu l ation i n Se le cte d J u risd iction s Ultry Jur bdktioll R tUb.tory S tnu :ture D4neor Mioimam U.IIoar Namwor Cll.b11 pu J,OOO DtiftCd Fare Rcevtarion FJcetSlJo Scrvh:e Compan.lts Re;e:ulllfion Jolorlda BtO'o\'UdCo. Counl)' QVI. Rt$1riod cntl)' I 0,51 F ixed $!>.4$ CltaM!te Co. Courll) govt. Open entry I No 1 4 0.$< Ocn:gu:la!cd NA City M i n I "' ) NA Degulated NA Dayton11. BcKh CC'Ilry I No $ 1 2 4 '"""' $7.20 fl. My\:is City 80Vf. Opc nmuy I y" 3 0.99 Dercg. wlmllX. S1 1S Gaine:svill u City eovt. enll')' I No s 0 .40 Dcresu la!eel NA fllll:lbOI'Ollgf:l Co. blcpcud eo 001nmlssloo Rwrid cnuy I y,. 0 5 4 Dcr cg, whni\X. S$ .JS J.-d: s o:Ml l c Cityg"t. Restrit':d cr.'lfy I No II 258 Fixod S l l.SS Lakel.w:l City fl0\1 Rutric1cd entry I No 2 0 .3S NA -l\e$1rictcd Clllt)' I N o 10 0 56 Dtrct\11$td NA M iaro.i-09k Co. Cour.ty S-00.1. Rtstti.ctoj t l ltl)' I l Decq:, wlm\l:t. ss.so SIIIIU Atll.tma, (;A C icy Re-nri'*d cn1ry 2$ No 30 3 .99 Fixed $$,74 Bo i;, m Open entty I No IS 0 .<11 Drcteg. W/mllX, SIO,SS BufU.lo NY Cit y t;:ovt. Rcwic((d entcy I No NA 1.20 Detcz. w..'miJx. $ 10. 5 0 Clllldo1 1 t., NC C il); e,ovt. RC$1ricecd Cn.tl)' I y., 1.07 Dtre.gu!:tcd S7 .SO( mediM ) OH City g-art. Resuiaed tntl')' I No 12 Dcttt v.'/f'Mtl(, $7,80 Columbw,OH Cit)' Rcwictcd CC'IItY I No "' l):rc:g. wlmiiX. SIS:20 Dall, TX Cityg0\1. euuy 25 v .. 17 2 51 l>ccegulat< $1 20 Oa\i dson lnde:pe:nd. co. Clltt)' 1 0 y., 14 0 .74 Dcreg. w.'tn3X. sus Co., TN couuuissloo 8


T able 1. (Conti nued ) Jurisdidio:ll Rtg.tdAtOry Dqr u of M inimu m Stnt chlr-t Rtpla.tion Fkcc Size Dcn''Cf, 00 lftdtpt:nd. state Open cney I co m m i$${on Fromo,CA City QoYI. Qtl)' R Wonb, TX Cit y G.o;-t. mtry I HOUSIOU, 1'X City eovf, RC3trictcd c::alfy I I N ()peaen lfY I too An:el< CA City "vl. R utricltcd e n try I Madison, Wl Q ty '1":. Rcs-!rich:d I N.la>enill.c. n. Cit y &1)\1. Optn crury I Norfo l k, VA City go-.1. R(Str lckd m ll)' I Pordrutd, OR C i'YS0'\1J Rc.slricced enlfy IS Indcpcn d. c i !y Prince Wiiiim Cou nt y govt. Rtnri1. Open C tUY I Sc. Louis, MO C itye;ovt R e t ri.cttd c:nlry I St Paul, MN Ci!Y govt. Rc.slrieted ent ry I Tu.b:t,OK Cil}'govt M in. IO Virsinia!kxh, Cit y (;U'o1. Rt.$tt iCICd et\11')' I V A DC ll\dq)cDd.cil)' ecmmissicn Opene Mry I .. ., 14-Hour s.mu A Review of lhc Method atKJ Sttucluflt of Taxicab Regulations In Repre$en(afjve Communities ;n Florida and Other States Nambcrof C11.b$ per 1 00 0 Dc;crceof C omptnies ropubtion Re!Vbri ofl S...'llle fllft N'(l 1.71 NA No 18 (), 1 1 $?,70 (tncdhlel) y., 2 O.s!> Dtre*" wlmax.. t7.SO N o 1. 3 0 F i x ed $S.S5 N o 150 Detcg. w..'max. $13.15 ( med illlll) No 10 o.ss Fixfd $9 70 v .. 2 0 7 1 Fixed SIOAO No 6 l .l1 l><:te&'JI3t td II A "' 3 M1 rkn:e. wimtnc. SS.3S Yu 6 0 .3 $ .De:&. Y

A Review of the Method end Structure of TaxiCab ReguloiiOI)s in Communities in Florfcla and Other States The case studies presented bel ow provide more detail about how some jurisdictions are addressing the issues. Case Study 1: HiUsborough C ou nty, Fla. Regulatory Structure. Taxicab service within the county, including th e three municipalities, is regulated by the Hillsborough County Public T r ansportation Comm iss ion (PTC). The PTC is composed of seven elected appointed to two-year terms by their.respective commission or coun c il (three from the Board of County Comm is sio ners two from the Tampa City Council, and one ea c h from the city councils of Temp l e Terrace and Plant City). Prior to establ is hment of the PTC in 1973, taxicab service was regulated by the individual cities within the three mun ic ipal i ties and was unregulated in uni n corporated Hillsborough County. The PTC has the power to fix or approve all taxicab rates and to issue certificates of public c onvenience and necessity. Other responsibilities include establishing rules and regulations regarding safety equipment, and driver qualificatio ns. Entry. There are several barriers to e ntry into the Hillsborough County taxicab market The primary on e is the requirement to prove public convenience and necessity for new permits. Applicants must present their case to a special master appointed by the PTC to inve s tigate arid review the applica t ion The spec ia l master holds p u b li c meetin gs on the application and follows up with a recommendation to the commission. The commissio n then can either approve or deny the request. The commissio n rule s require tha t consid era tion be given to adequacy of existing service c haracter of the proposed service, financi al status and experience of the applicant, and the opinions of existing certificate hol ders. Other barriers t o entry include a cap on taxicabs set at one per 2,000 population, the requirement t o provide 24-hour service, and the requirem ent th a t vehicles be less than five years old when placed into sefvi.ce. Fares. Maximum fares are fixed by the PTC and subject to review and change upon petition by certificate holders or cotmty re sidents. Current maximum fares are $0 95 for th e first 115 mile plus $0.30 for each additional 1/5 mile Case Study 2: Broward County, Fla. Regula t ory Structure. Broward County regulates on a countywide bas is but also allows individual municipalities within the coun ty to regu late separately if they wish, so long a s they maintain the minimum requirements established within the county ordinance. Municipalities may adopt stricter r egulations i f they choose, but they cannot authorize any taxicab to pic kup in any other municipality or in the portions of the county. Regulation a t the county level is a m ulti-age ncy function with a majority of the work performed by the taxicab section of the Co nsumer Affairs D i vision. The taxicab section investigates applications for 10


A Rov.:ew of lh9 Mttthod and Structure of Taxic.sb Regulations in ReptUsentaUvtJ Communities in Florida and Other States certificates of public convenience and necessity, issues vehicle pennits, registers taxi drivers, proposes new rules and regulations, and is responsible for suspension and revocation of permits. It also is responsible for enforcement of the regulations. The Consumer Affairs Division schedules hearings as necessary and monit ors business records. The Consumer Protect ion Board holds hearings on appeals of denials, suspensions, and revocations. The Broward County Commission controls the rates of all taxicabs operating within the county. Entry. A cap on permits (medallions) set by tbe Broward County Commission controls the number of taxicabs operating within the county and acts as an entry barrier for new operators. The cap is set at one vehicle medallion per ;2,000 population and is reviewed annually. If additional medallions are authorized, they are issued through a lottery. Qualification for the lottery is open so long as the applicant does not have a felony criminal record. A dditional ly, all companies must obtain a business license to ope rate a taxicab company no matter how many medallions they own. A proof of public convenience and necessity must be shown for all new licenses There currently are four taxicab companies in the county, each of which holds or contracts for several certificates (business licenses). Each certificate authorizes taxicab busmess to be done by an independent contractor who may, in tum, hold many vehicle medallions. Fares. Fares are fixed by the Board of County Commissioners and are reviewed on a bi-annual basis. Factors that are considered are the recommendations of the taxicab section the consumer price index, and rates charged by surrounding counties, particularly Miami-Dade County. Rates current-ly are $0 .95 for the first 1/7 mile and $0.25 for each additionall/7 mile Case Study 3: Miami-Dade County, Fla Regulatory Structure. Taxicabs in Miami-Dade County are regulated by multiple agencies on a countywide basis. Those involved include the Board of Cotmty Commissioners (BOCC), the Mianii-Dade Consumer Services Department (CSD) through its Passenger Transportation Regulating Division (PTRD), the county manager, and the clerk of the court Most of the regulatory responsibility rests with the CSD/PTRD including driver permitting, business licensing, vehicle inspections, rule development, and distribution, transfer, suspension, and revocation of licenses. The BOCC is responsible for holding hearings on pcoposed new rules and on increases in the maximum allowable rates. The Code Enforcement Section of the clerk of the court's office is responsible for hearing appeals and provides all hearing officers. Entry. Entry into the Miami-Dade County market is very difficult. Miami-Dade County currently operates on a permitting system which will be converted under a new ordinance to a medallion system in Aprill999. Currently, the number of taxicabs allowed under regulation is 1,854. The new ondinance will allqw an increase of29 taxicabs this year using a lottery system open to currently permitted drivers who meet entry criteria as specified in the new regulations. 11


A R11vicw of the MethOd and Struc t ure of T axicab RegulaUons In RepresentatiVe Communities lrt Flo(fdiJ and Other State-s additional medallions will be added each year through 2003 using the same lottery system. Beginning in the year 2004, the cap on medal li ons will be based on a ratio of one medallion per 1,000 popu lation of Miami-Dade County. U n der the new rules, medallions become tangible ass e ts may be gifted to family members or can be sold, transferred, or leased to o t her taxicab operators. Any new medallion issued after the effec t ive date of the new ordinance will require a paym ent of $15,000. Another major change in operation is the requirement that vehic l es be removed from service when they reach eight years of age (the maximum was 15 years under the old system) and that they be less than five years o l d when placed in service This new requirement will be phased in through the year 2000 F ares. Maximum rates under the ne\v ordnance are fixed by the BOCC and are effect ive throug h out the cotmty. However, operators may charge less than th e estab li s h ed rates if their proposed rates are approved by the coll!lty manager. The co u nty manager also must approve any special rates, such as flat rates from the airport. Current approved rates are $1. 50 for the first 1/ 4 mil e and $0.25 for each additional 118 mile. Case Study 4: St. Petersburg, Fla. Regulatory Structure. St. Petersburg is relatively unregulated compared to other m!\ior cities in Florida The mayor's office and the St. Petersburg police department exercise regulatory control over the local taxicab industry. The mayor has delegated his author i ty to the Occupat i onal Licensillg Division for direct supervision of the industry. Regulations are specified in a city ordinance and are very general in nature Entry. Entry barriers are rrunimal. For instance, in addition to the normal licens ing of drivers including background checks, the main restrictions to entry are requirements t o maintain at least three taxicab permits meet vehicle safety standards as se t forth in the ordi n ance, and maintain 2 4 h our radio dispatch service The thr e e-permit minimum has been interpreted to include three permit s anywhere in Pinellas County w ith at least one in St Petersburg Independent operators are generally affiliated with a larger company to meet the radio dispatch requirement or else they hire a dispatch service Fares. fares are controlled by market forces and need only to be o n file-with the m ayor's office. There are no approval agencies for t h e control of fares; h owever, the three largest companies generally set the rates in competition with each other and the others fall in line." Curre n t ly, all three maj or companies are charging the same rate which is $1.50 for the first 1/7 mile and $0 20 for each additional 1/7 mile A few years ago, a committee was established in Pinellas County to in v estigate a cotmtywide system for regulating taxicabs, but, because of the large number of independen t municipalities involved, no consensus was reached on countywide regulation, and th e idea was dropped. 12


Case Study 5: Cincinnati, Ohio A Review of the MethOd an

A RcWJw of the Met/Wd and Structure of Taxicab In Representtttlve communities in Florida and Other Stoles Fares. The board sets maximum rates, and operators can charge less if they wish. The current rates are $1.50 for the first 1110 mile plus $0.15 for each additionall/10 mile. Case Study 7: Indianapolis, Ind. Regulatory Structure. In 1994, Indianapolis deregulated taxicab service for the city. As a result, there currently are 150 taxicab companies operating within the city's jurisdiction ranging from large companies such as Yellow Cab down to single cab independent operators Regu l ation is through a single agency, the city controller's office. The controller is responsible for all agpects of taxicab operations including applications for license, investigation of applicants, examination of applicants, inspection of vehicles, monthly certificates (mainly used for insurance purposes), fare filings, and complaints. The controller exercises his power through a single person office, which reports directly to him. Taxicabs servicing the airport are separately regulated by that agency. All operators must carry accident and liability insurance. The controller issues monthly certificates as a means to confirm which taxicabs meet this important requirement. When an insurance company notifies the controller that an operator is being dropped, no certificate is issued and the taxicab must be taken out of operation. E ntry. Entry into the industry is virtua ll y unregulated. There are some minirnwn r equirements but these are generally easy to meet. For instance, all operators must possess a valid chauffeur's driving li cense and must not have been convicted of a felony, drunk driving or being a habitual offender within the preceding five years. Drivers are tested on knowledge of the rules, the geography of the city and surrounding counties and their ability to operate a motor vehicle. These minimum requirements are nearl y the same for all jurisdictions around the country and are not significant barriers to entry. When Indianapolis deregulated the industry, the number of taxicabs increased from approximately 350 to more. than 600 but has since settled down to approximately 450. According to city staff, the major advantage of this open system is that it allows greater opportunity for employment. However, saturation of the market also has made it harder for drivers to make a living and has led to price gouging by some drivers. The city says another disadvantage is that it is difficult to ge t rid of poor q u ality operators because the minimum requirements are so liberal. Fares. Fares are unregulated below the maximums set by the city. Currently a maximum of $.40 per 1/5 mile is allowed. However, drivers are allowed to charge anything they want for a pickup charge, which commonly is referred to as a meter drop charge. Meter drop charges range from $!.25 to $5.00. Fares do not have to be approved by any regulatory agency but must be filed with the controller. Fares can be changed only once per quarter. Special fares can be charged during periods of mcing at the Speedway and must be filed ten days prior to implementation. 14


Case Study 8: Los Angles, Calif. A Review of the Method and Structute of Taxicab Regulations in Communities In FJOt'fda and other States Regulatory Structure. Taxicab service in Los Angeles is delegated by the city council to the Board of Transportation Commissioners (the Board), which is made up of.citizens appointed by the mayor and approved by the council. The Board bas the authority to adopt necessary rules and regulations regarding taxicab operations. These rules cover service, safety permittin g, penalties, suspensions, driver licensing and revocation, and rates. I t also makes recommendations to th e city council on franchise applications. Enforcement of Board regulations is delegated to the Department of Transporta tio n for the city along with various police powers such as the ability to make arrests for misdemeanor violations of the rules. The city DOT also is responsible for conducting required background checks on operators and drivers and ensuring that all insurance requirements are met and maintained. Entry. Los Angeles uses a franchise system to control entry into the market. There are currently ten taxicab companies divided among five franchise areas. Franchisees are allowed to cruise only within their respective areas; however, they also are allowed to pickup in other areas by request Permits are a u thorized based on public convenience and necessity and are issued by the Board only after a public hearing. Periodic (but not frequen t ) re.franchising is used to open the market to new companies. This is accomplished by recalling all franchise permits and reallocating them among current and new companies. Fares. Fares are fixed by the Board, except for flat rates from the airport, which are set by the operators and filed with the Board. All Board recommended rates must be approved by the city council, by ordiru\nce, prior t o taking eff ect. Current meter fares are $1.90 for the first 1/8 mile and $0.20 for each additional 1/8 mile. These rates must be charged regardless of the franchisee or the area serviced. Case Study 9: Portland Ore. Regulatory Structure. Regulatory control of the taxicab industry in Portland is split between city government and an independent commission called the Taxicab Board of Review. The Taxicab Board of Review consists of seven appointed members, five voting and two non-voting. Voting members serve two-year terms and include three members of the general public, the manager of the city btu'eau of licenses, and the city traffic engineer. The two non-votin g members represent the taxicab industry and serve one-year terms. The Board holds hearings and makes recommendations to the city council on permit applications and rates. The city council then makes the final decisions on taxicab permits and rates. Entry. Entry is controlled through the permitting process. The number of taxicabs allowed to operate inside Portland is capped, however the caps are reviewed in each odd-numbered year and 15


A Review of the Me/hod and Slruclure of Taxicab Regulations in Rcpresontab'w Communities in Florfda and Other States additional pennits may be authorized based on population increases, changes in uave! patterns, and increases in the number of passengers transiting the airport. In considering whether a new permit will be granted, the city council takes into account the ability of the public uansportation system to prov ide movement of persons around the city, the ratio of taxicabs to c i ty population, a demonstrated need for service that is not currently being met by existing taxicab companies, and the i nterests of the applicant in establishing a local business. All companies doing business within the city limits must maintain an office that is open and staffed eight hours a day, five days per week. They also must provide 24 hour service and operate not fewer than I 5 taxicabs. Rates. The city eounci! sets the maximum rates tbat can be charged and allows operators to charge less. Each taxicab company must file its rates with the city Current maximum rates are $2.50 for the first 1115 mile and $0.10 for each additional1/15 mile. Case Study 10: Seattle, Wash. Regulatory Structure. ln S e attle, regulation of taxicabs is delegated to the city finance departmen t which handles pennit applications, v ehicle inspe ctions, vehic l e licensing, and drivers licensing. Entry. Applicants for taxicab pennits must opera t e a minimum of 15 taxicabs. However, when the current regulations were adopted, all operators who h eld permits were grandfathered i nto the new system. As a result, there are 217 taxicab companies in business of which 210 are independent operators. Taxicab licenses are now capped at the number in effect as of December 31, 1990, which was 637 taxicabs. Although this restricts entJ:y, permits are transferable in Seattle and they currently have a market value of about $12,000 Applicants' vehicles must be less than seven years old at the time of application and must be equipped with a two-way radio and taximeter Drivers must pass both an oral and written test covering wr i tten and spoken English, knowledge of safety rul es, and knowledge of the geography of the city and surrounding areas Rates. Rates are fixed by the city council based on the public's "need for the lowest level of charges cons i stent with the provision, maintenance and continuation of serv ice." The council also considers rates charged by surrounding counties Current meter rates are $1.80 for the first 1/9 mi l e and $0.20 for each addi tionall/9 mile In addition, a waiting time charge of$0.50 per minute is autom atically initiated when the speedometer drops below 17 miles per (e.g. at uaffic lights), which results in a wide variety of final charges for identical trips. 1 6


Case Study 11: Miscellaneous States A Review of the Method and Strocture of Taxicob RegulaUons in Representetlve Commvnlties it'1 F/Orfda I!Ufd Other Stares Entry and fares are regulated at the state level in several states, including Colorado, Collllecticut, Delaware, Maryland, Nevada, Rhode Island, and Pennsylvania. The degree of involvement xaries as described below for each state. In addition, in a number of other states there are statewide requirements regarding certain safety and service issues, such as minimum insurance coverage. Colorado. The state Public Utilities Commission has authority to grant certificates of public convenience and necessity to operate taxicabs within and between counties v,ith a population of 60, 000 or greater based on the federal census conducted i n 1990. The commission also has the authority to approve fares and to regulate matters of safety, insurance, and service quality for taxicab service in the state. Taxicab companies i n these large counties (60,000 population) are required to provide service 24 hours per day. Taxicab companies that provide a point-to point service in an area with a population greater than 250,000 must deploy at least 15 taxicabs at any given time. Taxicabs must be less th an six years old; however, vehicles up to te n years old may be used if they are deemed by the state safety inspector to be in outstanding physical co ndition . Connecticut. The state Dep artme nt of T ransport ation is charged with establishing regulations with respect to fares, service, operations, and equipment and it must approve all certificates of public convenience and nec essity It also conducts hearings with respect to written petitions from local government or any other interested party regarding fares, service, operations, and equipment or, the convenience protection, and safety of passengers and the public The state Department of Motor Vehicles registers taxicabs and licenses d rivers along with performing semiannual vehicle inspections. Delaware. The state Department of M otor Vehicles has the full range of responsibilities for regulating taxicabs, including imposing and approving fees and fares proposing and adopting rules and regulatio ns followi ng a public hearing, gr.mting certificates of publi c convenience and necessity, and enforcing its rules and regulations. The state uses a medallion system. Each certificate holder of public convenience and necessity gets a medallion or other identifying insignia for each vehicle operated under that certificate. Certificates and medallions are transferable subject to the appro val of the Department. A holder of a certificate of public convenience and necessity may lease its taxicabs to independent operators, provided that the holder of the certificate of public convenience and necessity is responsible for the proper operation and maintenance of the vehicles. Maryland. Any person who operates a taxicab business in Baltimore County and the cities of Baltimore, Cumbedand, and Hagerstown must have a permit issued by the state Public Ut ility Commission . Local laws governing taxicab operations do not limit the jurisdiction of the 17


A Review of the Method and Sfltleture of Taxicab Regulations in Representative Communlrlcs Jn FIOtidtJ and Other States Commission over a taxicab business as a common carrier. The Conunission has the power to suspend or revoke business permits as well as authorize permit transfers. The primary criterion for issuance of a tax .icab permit is public welfare and convenience. Fares also must be approved by the Commission. Tax ica b services in other cities in Maryland a r e regulated by local government, but the state reserves the right to intervene. Nevada. The state taxicab authority regulates taxicab services in counties that have agreed by ordinance to be included in the jurisdiction of the taxicab authority. The authority has five members appointed by the governor, and no member serves more than six years. No elected officer of the state or any political subdivision is eligible for appointment. Although the sta te statute spells out most of the rules and regulations in detail the authority has the power to adopt additional ones. These rules and regulations may include different provisions to allow for differences among the counties. In addition, the taxicab authority grants certificates of public convenie nce and necess i ty sets fares, licenses ta xicab drivers, and enforces these rules and regulat i ons. Local law enforcement agencies and the state highway patrol upon request by the authority, may assist in enfo rc ing these rules and regulations. The sta te tranSportation services authority deals with appea l s from decisions of the taxicab authority. Certificates are transferable upon approval by the authority The holder of a certificate is required to provide regular service 24 hours per day. All applicants for a driver's permit must successfully complete a training course. Pennsylvania. The state of Pennsylvania regulates taxicabs in its major cities through its Public Utility Commission. It approves certificates of public convenience and necessity, sets fares, inspects vehicles, and prescribes rules and regulations necessary to regulate taxicabs. It establishes a driver certification program in each city. It may contract with the police department in each city for enforcement For smaller cities, the state delegates regulatory powers to the local government. Each of the smaller cities must license taxicab services through its police department, which must check the character and general fitness for taxicab services of each license applicant The state uses a medallion system in the major cities. Every taxicab needs both a certificate of public convenience and necessity and an accompanying medallion. A certificate of public convenience is a licensing right that authorizes the op eration of one taxicab in a specified city and may be canceled by the Commission. A medallion, on the other hand, is considered as property and may not be revoked or cancel ed by the Commission. Medallions are transferable but all transfers must be made at offices of the Commission in the presence of a Commission staff member. Five percent of the medallions in each major city must be issued to minority drivers or minority-owned companies. The total number of certificates and medallions may be increased if the Commission finds a need for addi tional taxicab service in individual cities The fee for each new medallion equals the market value of a medallion and can be a substantial barrier to entry. The cap on the total number of certificates and medallions in each major city is I ,600. Taxicabs placed in serv i ce cannot be more than eight years old. Each taxicab 18


A Review of the M8thod /Jfld Struc!ure of Taxicab Regulations In CommuniUes in Florida and Other States m ust be equipped with a protective barrier for the protection of the driver, and a twoway radio for use with a centralized dispatch system. Taxicabs can p i ckup passengers from any point in the state for trips to the city for which the certificate i s issued as long as the request for service is received by call to its radio dispatch service. Rhode Island State government regulates taxicab services throughout Rhode lsi8J)d except for the town ofNew Shoreham Two state agencies are inv olved: the Division of Public U tilities and Carriers within the Public Utilities Commission and the Division of Motor Vehicles The Division of Motor Vehicles has juri sdi ction over the ligh t ing, equipment, safety, and sanitary condition of all taxicabs through pre -li censing and periodical inspections and over the licensing of taxicab drivers. The Divi s i on of Public Utilit i es and Carr i ers has a broad range of powers and responsibilities. It conducts hearings and approves appl ications for certificates of public convenience and necessity, approves fare changes, approves leasing arrangements for taxicabs being operated by persons who are not owners or employees of owners and approves transfers of certificates for taxicab businesses. The state allows local governments to establish additional rules and regulations on taxicab serv ices a s lon g as they are consistent with the state regulations. Case Study 12: Miscellaneous Independent Commissions The above case studies for Hillsborough County, Davidson County (Nashville) Los Angeles and Portland describe how independe n t commissions operate in those jmisdictions. Other independent boards and commissions are described below. Anchorage, Ak. The Municipal Transportation Commission is co mposed of five members appointed by the mayor. The city transit director serves as an ex officio member of the Commission The Commission regulates taxicabs, limousines, and other vehicles for h i re. It estab lish es maximum rates to be charged for taxicab service. It holds public hearings to determine the maximum number of taxicabs needed based on proof of public convenience and necessary. Whenever the Commission increases the maximu m number of taxicabs as a result of the public hearings, the new permits are s old at a public auction to the highest qualified bidder(s). Ann Arbor, Mich. The Taxicab Board consists of five voting members appointed by the mayor, subject to the approval of the city council. One of the members is a member of tho; cljy council and serves a one-year term The other four members must be n on-employees of tbe city and serve three-year terms. Addi tionally, the contro lle r Md chief of police are included as non voting Board members. The controller serves as secretary of the board and the Board elects its own cha i rman, who serves for a term of one year. 19


A ReVl'ew of the Method 8nd Sttuclure of Taxicab Regulations in Communities In Florida and Other states The primary purpose of the board is to hold grievance hearings. The Taxicab Board may adopt regulations regarding administrative procedures relevan fto its duties that must be fust approved by the city attorney and filed with the city clerk. Entry and fares are tegulated by the city. Any person aggrieved by the decision of th e city department that enforces taxicab regulations regarding the issuance or revocation of a taxicab license or a taxicab driver's license may appeal that decision to the Tax icab Board. Charlotte, N.C. The Tax icab Review Board is composed of five members: two members appointed by the city council, one appointed by the.mayor, and two appoin t ed by the city manager. Of the city council's appointments, one must be an .operating permit holder or his designee and the mayor's appointee shall be an individual owner-driver All members serve without compensation. Term of office is four years. The city manager designates one of the members appointed by him as chairman. The chairman must be a member of the Charlotte Police Department and have the rank of captain or above. The Taxicab Review Board is responsible for holding hearings on all appeals regarding suspensions or revocations of operating permits. The Taxicab Review Board has the power to make all rules and regulations with regard to its authority over the taxicab industry and files them with the city clerk. The city manager or city council may assign the Tax i cab Review Board ot h er responsibilities as it deems necessary. Entry is regulated by the city; fares are deregulated Columbus, Ohio. The Vehicle for H ir e L icense Board consists of thirteen members of which five are appointed by the mayor. The remaining eight include the director of public safety (serves as chairman) the City auditor, the chairperson of the public safe t y committee of the c ity council, an owner representing owners of25 or fewer taxicabs selected by majority vote of these owners, an oWner representing owners o f 25 or more taxicabs selected by m ajority vote of these owners. The appointed membership consists of a member of the chamber of commerce, a member of the Columbus Municipal Airport Authority, a member of the Convention and Visitors Bureau, and two private citizens. The director of public safety and the city auditor serve during their incumbency as public officials. The chairperson of the public safety committee of the city council serves as long as such person remains on the city council. These members serve on the board without additional compensation from the city. All other members serve for a term of one year, without compensation. The Vehicle for Hire License Board conducts a public hearing at least annually to recommend to the city council the total nuinber of taxicabs which may be licensed within t h e city based on consideration of public convenience and necessity Maximum fares are set by the city Glendale, Calif. The Transportation and Parking Conunission (TPC) consists of seve n members appointed by the city council. All appointees serve a three-year term without compensation. 20


A -of ... Molhod end SWot""' of Tulcob Regulations In Communitie.sln Florlda Md other St'Btes Each member of the TPC must be a qualified elector of, or conduct a b us i ness in, the city at the time of appointme n t and throughout incumbency. At least four m e mbe rs of the commission must be persons either active at the time o f appoin t ment or previously active in the transportation field including, but not limited to, transportation plannin g, transportat i on program management, transportation advisory agency, civil engineering, transportation/traffic engineering, or urban planning. The TPC bas a wide range of powers and duties regarding the transportation industry of which taxiC!lb regulation is one part. The Commission grants or denies appl i cations for certificates of public convenie nce and necessity after holding public hearings. Fares are deregulat ed M ontgom ery County Md. M embers of the T axicab Ser vices Advisory Committe e are appointed by th e county executive. All serve three-y ear terms and may serve no more than three consecu tive terms. The committee consists of five public members and four ta xicab industry members. Of the four industry representatives, two must represent management and two must be taxicab drivers. Of the two drivers, one must be an owner-openuor and one must be a nonowner-operator. Of the public members one person must represent the handicapped community. A representative of th e director of the county Department of Transportation and a representativ e of the county attorney serve as ex officio nonvoting members of the committee The commi ttee advises the director of the county Department of Trans p ortation ii1 carrying out the duties an d function s prescribed in the regulation and eval uates th e p erformance of the taxicab industry in serving segments of the popu l ation with specia l transportation needs such as the handicapped and the elderly. The county regulates fares and entry. Norfolk. Va. The Board of Review consists offive members: the city assessor, the city traffic engineer, the city director of human services, and two members to be appointed by the city counci l. One oftbe appointees m ust be a representative of the drivers and the other a representative of the owners. The city assessor serves as chairman ofthe board. The Board's inc l ude holding hearings and adjudicating appea l s regarding proposed susp e nsion s and revocations decided upon by chief o f police. The Board has the power to affum, modify, or reverse the decision of the police chief. Entry and fares are regulated by the city. Orange Cou n ty, Calif. The Orange County Transpo11Ation Authority (OCTA) regulates taxicab service through the Orange County Taxi Administration Program ( OCTAP ) in 23 of the county's 32 municipalities. OCT A is governed by an eleven-member board of directo rs consisting of four county supervisors, six city council represe n tatives and a public me m ber sel ected by the other 21


A Review of tho Method and Structure of Texicab RegulatiOns in Reproscntab'Vo Communities in Florid:i and Other SUJtQS ten. Three alternate members are also selected to fill-in when a director is unable to attend or vote on a particular issue. A special member representing the state Department of Transportation also sits on the Board: The O rang e County Taxi Administration Program (OCTAP) established in January 1998, is the regulatory agency that coordinates and administers the permitting of taxicab companies, drivers, and vehicles for the participating jurisdictions. OCT AP was designed to relieve the administrative burden from the cities, to centralize permitting and to e liminate duplication of effort among the cities and the county. OCTAP policies are guided by two committees that meet quarterly. The OCTAP Steering Committee is composed of one member appointed from each participating city, OCTAP staff, one representat ive appointed from the tourist industry, and two taxicab company representatives. This co m m ittee guides OCTAP on policy issues and sets fares for all participating cities. The OCTAP P ublic Safety Committee is composed of law enforcement personnel ap p o inted from each participating city and OCTAP staff. This committee guides OCTAP on issues relevant to public safety. Enforcement is conducted by local police departments. Each city reserves the right to regulate entry. Prince William County, Va. The Taxicab Board of Review consists of eight members appointed by the Board of County Supervisors They must all be residents of the county and cannot be an owner, employee, member of a board of directors, or a stockholder of a taxicab or taxicab company. Members are appointed for a two-year term and may b e reappointed to successive terms. The primary focus of the Taxicab Board of Review is to conduct public hearings and act upon new applications for certificates of public conveh.ience and necessity and appeals of actions from of the ta.'

A Review of Metllod tJnd Slructure of Taxicab Regufatlons lt't R opteSMtaliv9 Communities in Florida snd Other Sta tes Washington, D.C. The District of Colu m bia Taxicab Commission consisls of nine members. Five are members of the public and three are industry members with experience in taxicab operations within th e District of Columbia. The chairperson is a public officer of the District dedicated full time to the Commission. All are appointed by the mayor The chairperson must have experience in transportation administration and regulation. All appointees, except the chairperson (who serves at the pleasure of the mayor), serve for a term of five years and may not serve more tb.an two consecutive terms. All public and industry members are compensated for their service and the mayor determines the salary of the chairperson. The Commission is organized into two panels whose membership is dete rmined by the mayor. The Panel on Rates and Rules consists of the chairperson, three public members, and one industry member. The Panel on Consumer and Industry Concerns consists of the chairperson, two public members, and two industry members. The Commission's Panel on Rates and Rules has jurisdiction over rates and standards. Entry is deregulated Advantages and Disadvantages of Different Approaches Regulatory Structure. Taxicab regulatory bodies in the U.S. typically are either an independent commission or one or more departments of loca l --and in some cases, state--government. Each of these can be either a single-purpose agency (i.e., regulate only taxicabs) or a multi-purpose agency (i.e., regulate other services in addition to taxicab service). Multi-purp ose agencies tend to be better able to resist undue influence from any single industry (i.e., to resist being "captured" by the industry). If an independent commission consists of local elected officials, it is more likely, for better or worse, to be influenced by local politics and public input than is a department of local government staffed by professional regulators, and there is a highe{ degree of public accountability. It is less likely to be able to afford the broad array of staff expertise that is availabl e to local governments. Both an independent commission and a single department of stat e or local government avoid the fragmentation and communication problems that can occur when regulatory responsib ilities are distributed among more than one department of local or state government. However, regulating taxicab s with multiple departments offers the advantage of delegating specific functions, such as licensing and enforcemen t, to agencies that are best suited to perform these functio ns. Police departments, for example, are effective as enforcers of taxicab regulations, but some other department may be better suited to handle permitting. 23


A Revitnv of ths Method an

A Review ()f the Method and Structure of T sx lceb RegulatiOn$ it'l ReprssentatNe Communmes in Florida and Other States RESTRIC T ED ENTRY ADVAN T AGES DISADVA NTAGE S It helps to maintain a stable and The criteria for entry can be very economically healthy industry by avoiding subjective and consequently, subject to destructive competition. politically influenced int e rpretations. I n the absence of market forces, it is difficu l t to determine the optimum supply of taxicabs. This can result i n either under-supply of cabs and excess profits or over supply of cabs and insufficient profits t o maintain equipment to desired levels. The protection offered by regulation reduces the incentive to innovate, develop new s ervices, and control costs. OPEN ENTRY ADVANTAGES DISADVANTAGES It iricreases competition, which tends to Easy entry may result in an oveJ'-supply of result in reduced response times and, in cabs, which often results in reduced theory, to increase theinc entive to operator incomes and leads to deferred innovate, new services, and vehi cle maintenance, high driver turnover contro l costs, although that appears not to unqualified drivers, and d e teriorating have happened in practice. (See also under service. disadvantages.) I f ent ry is given to individuals (i.e., The supply of taxicabs is determined by inde pendents), not jus t to taxicab market forces. companies, the result can be an extremely fragmented i ndustry t hat is very difficult It creates employment opportunities for t o polic e I t also, for instance, becomes displaced workers recently arrived next to imposs ible for a passenger to immigrants, and peopleon welfare to locate any items inadvertently left in a cab become economically self-sufficient in an easyentry, low-cost business. 25


A RIJ!/i()w of the M9thod and Struclute of Taxicab Regulations Itt ReprttSI,)nfiJtlvc COmmunities in Florida 8nd Other O P E N ENTRY WITH MIN IMUM STAN D ARDS ADVANTAGES . D ISADVANTAGES It increases competition while maintaining Minimum standards may require more the quality of servi c e desired by the local enforcement activities and resources community. open e n try. If fleet-size minimums are established, Minimum standards increase the costs of regulation enforcement is much easier and doing business, which puts upward the taxicab companies to some extent will pressure on fares. be self-policing. Minimum standards may restrict the choices offered to the customer. Persons who would prefer cheaper but lower quality taxicab service s may not have that option. Fare Regulation. Fares can be completely deregulated and be set by the individual taxicab operators or the regu l atory body can either set the fares or establish m axim um s t hat the operators cannot exceed Under the cases with completely deregulated fares or m aximums, operators typically are req u ired t o file in advance with the regulatory body the fares they are going to charge. FIXED FARES A D VA NT AG E S D I SA D VAN TAGES Fares can be se t at the level needed to Any bene fits of fure competition are lost. protect customers and t o en.sure an economically healthy taxicab industry. Generally, operators cannot segment the market aeco.rding to the level of servi ce Customers can be certain of what the fare and fare desired by different customers will b e. The regulatory body has the burden. of determining appropriate fare levels. 26


A Rev!'ew of the Method and Slructurs of Taxicab RegvlaUMS m Representative Communlt16s in Florida and Other S tates DEREGULATED FARES . ADVANTAGES DISADVAN TAGE S In theory, competit ion may reduce fares, Competition may reduce fares and profits but in practice it appears that there is little Q

A Rovie-w of the Method and Structure of Regulations in Repre.sMtatlve Communities id FloridsBild Other States When a city has open entry but limits ihe entrants to fleets of a minimum size (i.e., to companies instead of indiv i duals) the taxicab companies then become the regulators of supply (i.e., entry). That is, the taxicab companies decide based on market forces whi:n to expand or contract their supp l y of cabs on the street The companies also tend to be self-policing about service standards because they are protecting their company name and image, which is in competition with the other companies. On the other hand, individual owner-operators do not market a name and, therefore tend to be much less concerned about service standards. It appears that opening entry to individuals results in the lowest -cost and lowes t-quality operators entering the market and forcing out higher -oost, higher-quality operators to the point where acceptable-cost, acceptable-quality operators also can no longer compete. This occurs first at airports and cabstands where the first-in, first-out rule precludes the opportunity for choice or comparison shopping by the consumer. Perhaps the problems with low-quality operators could have been ameliorated if t h e deregulated cities had tightened and strictly enforced their service standards while leaving entry and in some cases, fares deregulated But the proliferation of individual operators made it extremely difficult to police and enforce service standards. The structure of the regulatory body appears not to have been a factor in the success or failure of past deregulation efforts. Nor does it appear to be a significa n t factor in successful regulation of the industry today. The primary concern with regulatory bodies is that they not be "captured" by the industry, which may argue for a multi-function agency or department. Adequate policing and enforcement capability is always i mportant, but it becomes critical under any form of deregulation. The geographic coverage of the regulatory body also has not been a major factor. The jurisdiction of regulatory bodies usually is either city-wide or county-wide Multi-county authority is either very rare or non-existent. As a final cautionary note, Multisystems in its 1982 report observed that ... entry decontrol should not be viewed as an experiment that may be tried and rescinded at will .... deregulation is not always easily reversible." (Multisystems, 1982, p iv) 28


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A Rcvrew of the MtHhod and structure of Taxicab ReguUtliOil$ In R6pr9sentatiOJB COmmunitle$ in Florida and Other StatfJS Richmond, Virginia, Code of Ordinances. Part II Cjtv Code. Chapter 30 Vehicles for Hire I In GeneralCSu pplement No. 6-8/98), 1998. Rochester, New York, Code of Ordinances, General Ord inances. Chapter 108, Taxicabs, as of 1118/1999. Salt Lake City, Utah, Code of Ordinances, Chapter 5.72. Taxicabs, [http://www.ci.slc.ut.us: 13 13/govemmentlcitycode/chpt0572.html), as of 1111/99. San Antonio, Texas, Code of Ordinance. eart II. Chapter 33 Vehicles for Hire. Article 1 General Provisions, as o f 1118/99. Santa Cruz, California, The Santa Cruz Municipal Code. Title 5 Business Licenses and regulations Chapter 5.16 Ta xicabs, as of 1/11/99. Sarasota, Florida, Code of Ordinances. Part II. The Code. Chapter 36. Vehic les for Hire, Article II. Taxicabs and Other Vehicles for Hire, !998. Seattle, Washington, Taxjcab Re.gu!ation. Ord inanc e U 834l, 1 997 Shreveport, Louisiana and Municipal Code Corporation, Shreveport Code: Article II. Taxicabs, 1998. Sioux Falls, South Dakota, Revised Ordinances. Part II. (Supplement No. 28), 1998. St. Louis, Missouri, City Rcvjsed Code (Annotated). Chapter 8.98. Taxicabs and Service Cars and City Charter Article XII!. Board of Public Service, [http:l/slpl.lib.mo.us/cco], as of2 /I0/1999 St. Paul, Minnesota, Legislative Code. Chapter 376. Taxicabs, (http:/W\vw l.stpaul.gov/ code!lc376.html), as of t/8/1999 St. Petersburg, Florida, Code of Ordinances. Chapter 28. Veh.i&les for Fin;, as of 1/12/1999. Stuart, Florida Code of Ordinances, Part I, Chap te r 2 Businesses Article II. Taxicabs 1998. Ta llahassee, Tallahassee Code. Article IV, Taxicabs, as of 11119/1998. 37


A Review of the Method and Stroctuf9 of Tsxicab Regulations in Representative Communities in Florida and Other States Titusville, Florida Code of Ordinances, Part II. Cbapter 22 Vehicles for Hire, Article II, Taxicabs, 1998. Tulsa, Oklahoma, Code of Ordinances, T ille 36, Taxicabs and Paratransit Vehicles Chapter 1. T ax icab and faratransit Vehicle Regulations, as of 1/1/1997. . Vera Beach, Florida, Code of Ordinances, Part 2, T i t le Ill, Police Power Ordinances, Article I, In General, (S u pplement No. 39, 1/99), 199 8. Virginia Beach, Virginia Code of Ord i nances, Article IV, Taxicabs and For-hire Cars, Supplementals No. 1. No. 41. and 53, as of January 1 999, Winter Haven, Florida, Code of Ordinances. Chapter 20, Vehicle s for Hire, 1998. 38


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