Ever try to catch a cab in L.A.? It can be infuriating, and even more so since local transit workers went out on strike. Sometimes it takes taxis forever to respond to a pickup call. And in some areas of the city, they never show up at all. The city is out to change all that as it prepares to grant new franchises to cab companies for the first time in a quarter century. The goal is to better monitor and regulate taxi service while trying to keep response times to 15 minutes or less. The stakes are huge: the 11 taxicab companies that currently hold city franchises rake in an estimated $3 billion to $4 billion a year. And the city itself receives $90 million a year in franchise fees from these companies, making it one of L.A.’s largest business income streams. “Millions upon millions of dollars are at stake for these companies. And what is decided in the next few weeks will also determine the livelihoods of thousands of taxicab drivers,” said Howard Sunkin, a lobbyist with Cerrell Associates who has represented taxicab franchise holders for the last 14 years. It’s a nerve-wracking process for cab companies because there’s no guarantee that firms that currently hold a franchise will be awarded a new one after their bids and track records are scrutinized. And those that do get franchises renewed may not be allowed to keep the same number of licensed vehicles. “If any one of the companies gets a cut in their (taxicab license) allocations, it will be disastrous for them,” said Jerry Qonsul, general manager for Lennox-based Los Angeles Checker Cab Co., which now is authorized for 269 taxis. “The drivers would get hit especially hard, since they actually own their own cabs. They could lose their ability to work in L.A., all because the company they work for happened to make some bad management decisions several years ago.” In two weeks, the city’s newly established Taxicab Regulation Division is scheduled to release its recommendations outlining how many franchises there should be, how many taxicabs should be assigned to each franchise company, and most importantly which companies should get the franchises. In the process, taxicab regulators have spent several months combing the service, safety and compliance records of each of the companies. Under the plan, the overall number of licensed taxicabs will be increased to 2,303 from the current 2,183. The new regulations also call for stiffer penalties for those companies that consistently come in over the response time standard, which requires drivers to pick up customers within 15 minutes of receiving the call at least 75 percent of the time. “If a company does a really poor job, it can have its franchise terminated early or lose part of its franchise service area,” said city Taxicab Administrator Thomas Drischler. The new system calls for franchises to be awarded for five years, with the possibility of obtaining up to five one-year extensions before a franchise must be put out to bid again. The recommendations will first go before the five-member Taxicab Commission. They will then go to the City Council’s three-member transportation committee, probably in early November. If approved, the full City Council will vote on the franchise recommendations, probably by the end of the year. Eliminating long waits Another aim of awarding new franchises is to improve taxicab service in traditionally under-served areas like South Central, the Eastside and the Northeast Valley. “There are lots of times when someone in one of these under-served areas puts a call in to a taxicab company and has to wait 30 or 40 minutes for a taxi, if one shows up at all,” said Councilman Rudy Svorinich, who chairs the city transportation committee. “What we’ve found is that a taxicab company will often neglect some of their own service areas and instead encroach upon more-lucrative areas like the Westside. That’s unacceptable and that’s why we’ve pushed for the stiffer penalties.” With so much at stake, the lobbying on the franchise issue has been fierce. Taxicab companies spent nearly $100,000 in the second quarter alone to lobby city staff on this issue and to win City Council approval for a 12 percent fare hike that took effect in June. While lobbying figures for the third quarter are not due out until late November, the total is expected to be at least as high. However, lobbying is only a fraction of the costs that taxicab companies have incurred to be in the running for the new franchises. As part of the new requirements, each company must have in place a fully computerized dispatch system within six months of receiving a franchise. The aim, said city Taxicab Administrator Thomas Drischler, is to make it easier for city regulators to track taxicab response times, which like airline on-time arrival times is regarded as a key performance indicator. But a computerized dispatch system isn’t cheap. “It cost us about $2,000 a taxicab, or nearly $500,000, to install our computerized dispatch system last year,” said L.A. Checker Cab’s Qonsol. “It has tremendously improved our operations, so it was a worthwhile investment. But I can see how it can be a barrier for smaller firms.” ‘Deadhead time’ Since the last round of bidding in 1975, all of the franchises have been extended repeatedly in five-year intervals, with few changes in service requirements. Many believe the time has come for a major overhaul. “This is long overdue,” said Svorinich, “Of the 11 companies working in the city, only one has gone through the competitive bidding process; the rest of the franchises were acquired either through buyouts, mergers or transfers. This is our first chance in 25 years to really look at the quality of taxicab service in L.A.” Despite the huge outlays for lobbying and technological improvements that taxicab companies will have to bear, they do stand to gain something they have long pushed for: the ability to pick up customers outside their designated service areas. Currently, the city is split up into five general service areas: the San Fernando Valley, the Westside, the Central City, South Central, and the Harbor area. Taxicab companies can only pick up customers on the street within the service areas designated for them as part of their franchise; they must pass up any customers who flag them down outside their service areas. For example, if a taxi company is only licensed to serve the Westside, its drivers can take customers to the San Fernando Valley, but cannot pick up anyone in the Valley except if it’s a phoned request. This leads to what is known in the industry as “deadhead time,” where taxicabs must return vacant to their original service areas. The new regulations would do away with this restriction, provided the company maintains adequate response times within its primary service area or areas.
TAXI—The city is taking a hard look at service as it gets ready to grant new taxi franchises
