sr-021009-3bCity Council Meeting: February 10, 2009
Agenda Item: ~°-~j
To: Mayor and City Council
From: Elaine Polachek, Deputy City Manager
Subject: Regulation of taxicab operations
Recommended Action
Staff recommends that City Council review and provide comment and direction on the
proposed establishment of a franchise-based system for the regulation of taxicab
operations. Staff will return to Council with a proposed ordinance change which
incorporates Council's direction.
Executive Summary
A recent study of taxicab operations found a consensus among cab companies and
drivers presently operating in Santa Monica, the business community, and City staff that
there are too many cabs for the market. Further, there are multiple problems presented
by the current open-entry taxicab permitting system which prevent the City from
reducing vehicle emissions, setting uniform fares, or requiring taxicab company
operating standards. Staff recommends that the study recommendations be adopted as
the framework for establishing a taxicab franchise system that would limit the number of
taxicab companies to between four and eight companies and the total number of
vehicles in the taxicab fleet to 250. Comment and direction are requested to implement
the study recommendations through an ordinance change.
Background
In October 2006, the Task Force on the Environment recommended to City Council that
it direct staff to develop an ordinance which would award franchises only to taxi
companies whose fleets. met specific emission and mileage standards. The City has
also received complaints of apparently excessive numbers of taxis cruising for business;
poor customer service from drivers; confusing and high fees; lack of discounted
services for senior and disabled residents; and cabs with Santa Monica permits
operating as "bandit" taxis in Los Angeles and other cities. Since the City has no
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experience with taxi franchising, a study was conducted to help assess options for
regulating taxicab operations.
The study, conducted by Nelson\Nygaard Consulting Associates, concluded that:
• Santa Monica. has too many taxicebs and too many taxi companies for the
population;
• the City's present open-entry form of regulation, which. relies on market forces,
does not ensure either quality taxi service or a healthy taxicab industry;
• the City should establish a taxi franchise system which uses a competitive
Request For Proposals (RFP) process to award franchises to at least four but no
more than eight cab companies, each with a minimum fleet size of at least 25
vehicles, and which limits the total number of authorized cabs to between 200
and 300;
• franchised cab companies should be required to meet financial, technical and.
service standards for themselves, their vehicles and their drivers as a franchise
condition in order to ensure quality services.
Discussion
Santa Monica does not presently award taxi franchises, but rather issues permits to any
taxicab owner who meets insurance and other minimal requirements. Santa Monica's
open-entry system of regulating taxicabs has enabled large numbers of taxi companies
and vehicles to operate in the. City. Experience with open-entry systems in Santa
Monica and other cities shows that reliance on market forces does not ensure either
quality services or an economically healthy taxicab industry. Since the study was
conducted in 2007-2008, the numbers have increased and there are now 450 permitted
cabs in Santa Monica operated by 59 cab companies to serve a population of 91,000.
Twenty-four of these cab companies consist of a single vehicle and 25 other companies.
consist of 2-10 vehicles. Taxi drivers in Santa Monica currently average about $24,000
in income per year working six days a week since fhe large number of cabs permitted to
operate limits cab drivers' ability to earn a living. Despite heavy competition, taxis in
Santa Monica mostly charge higher rates than taxis in other nearby cities. Compared to
nearby cities, Santa Monica has a much higher cab to population ratio. The President
of the Los Angeles Board of Taxicab Commissioners informed the City that as of May
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23, 2007, taxicabs with Santa Monica permits are the single highest source of "bandit"
cabs found to be operating illegally in Los Angeles without meeting that city's stricter
standards for vehicles, drivers and cab companies.
The current open-entry system does not provide a regulatory framework which would
enable the City to establish requirements used by many other cities, including:
• placing limits on the number of cab companies allowed to operate in the City and
establishing rules governing their operation;
limiting the total number of taxicabs that can operate in the City in order to allow
both companies and drivers to achieve reasonable earnings.
• establishing either a single fare structure or a maximum fare.
limiting the age of taxi vehicles and/or establishing strict standards for
appearance and safety.
• requiring each company to have a distinctive name and color scheme, with
unique vehicle numbers, so that customers can easily distinguish among
companies and City staff can more easily enforce rules and investigate
complaints.
• requiring effective radio/computerized dispatching to avoid drivers
cruising/waiting for walk-up business, ensure service to customers and improve
driver/customer security.
• requiring driver training and testing in order to meet standards for knowledge of
City rules, geography and English.
• requiring acceptance. of City-subsidized discount fares for. disabled and elderly
customers.
• requiring each company to provide wheelchair accessible vehicles
• encouraging or incentivizing the utilization of vehicles which promote better air
quality and/or fuel efficiency.
Franchise System
Staff recommends that Council consider establishing a franchise system which would
encompass the following standards:
• Use a competitive RFP process to award franchises to at least four but no more
than eight cab companies, each with a minimum fleet size of at least 25 vehicles
and each with a minimum percentage of vehicles which can accommodate a
wheel chair;
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• Structure the competitive RFP process so as to encourage bidding companies to
propose enhancements beyond the minimum requirements, as a means of
selecting the franchisees and determining how many cabs each company could
operate, and to encourage the greatest use of fleets consisting of SULEV and
other fuel-efficient vehicles;
• Require each company to have a distinct name, color scheme and unique cab
numbers assigned by the City;
• Establish an initial total limit of 250 vehicles permitted to operate in the City;
• Require a centralized dispatching system, based either on radio orcomputerized
technology; record keeping with both dispatch logs and driver logs; and a staffed
place of business where records are kept and may be inspected and where
customers may contact the company to make complaints or retrieve property.
• Require that companies provide training to their drivers on City requirements,
company procedures, defensive driving, map reading, local geography, customer
relations, personal hygiene, security and public safety; and non-discrimination in
the treatment of customers based on age, disability, ethnicity and gender
Require that companies ensure that drivers are proficient in English so as to
communicate directly with customers without the aid of cell-phone calls or other
translation assistance.
• Require that companies be responsible for their drivers' compliance with City
regulations and laws, including provisions for company-specific fines and
penalties for a persistent pattern of driver violations, including franchise
revocation for failure to enforce compliance.
• Require documentation of the cab firm's financial stability adequate to meet the
franchise standards, with a liability insurance coverage requirement of no less
than $1 million combined single limit per vehicle.
• Require vehicles to be no older than a specific number of years and be certified
by aCity-designated inspection facility for safety,.mechanical reliability, meter
reliability, markings and required signage.
• Establish a single metered fare rate compatible with the prevailing fare set by the
Los Angeles Department of Transportation; and two flat rates for trips to LAX,
one for trips originating north of the I-10 freeway and one for trips south of the I-
10freeway.
Impact on presently permitted cab drivers .and companies
At workshops held with cab drivers and companies, there was agreement amongsf the
participants that there are too many cabs and companies now operating which has
pressured drivers to bend or ignore existing rules, to engage in cruising and work long
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hours over 6-7 day weeks in order to maximize their incomes.. Even working a 6-day
week, Santa Monica cab drivers average only $24,000 a year in income. Of the 59
companies now permitted to operate; fifty have 10 or fewer vehicles and would not meet
the suggested minimum fleet size of 25 vehicles per company under the recommended
franchise structure. However, as the drivers and small companies themselves
suggested at the workshops, independent drivers, single owner/operators and small
companies have the option of forming their own cooperatives or associations and
submitting eligible bids, thus not limiting eligibility to the larger taxicab companies. In
order to implement the study's recommendations, the number of cabs now permitted to
operate will need to be reduced by 35-55%.
Vehicle emission/fuel efficiency standards
At its December 15, 2008 meeting, the Task Force on the Environment .reviewed with
staff of the City Attorney's Office the issue of federal pre-emption of local standards for
vehicle emissions and fuel economy and adopted a motion stating its support for the
establishment of a taxi franchise agreement that would maximize criteria for pollutant
reduction, greenhouse gas emission reduction, and petroleum displacement for future
taxi operations in Santa Monica. Staff has reviewed the legal implications of setting
specific. vehicle emission/fuel efficiency standards and has found that attempts to
impose stricter regulatory standards than those authorized by the federal Clean Air Act
and Energy Policy and Conservation Act have been overturned by courts based on the
doctrine of federal preemption. However, other cities, including San Francisco and New
York, have been able to achieve the goals of reducing emissions and dependence on
carbon-based fuels through incentivization. Staff recommends that the RFP scoring be
designed in such a way as to legally reward bidders that commit to the greatest use of
fleets consisting of SULEV and other fuel-efficient vehicles.
Discounted fares for senior and disabled customers
Residents have requested expanded discounted transportation for seniors and the
mobility impaired beyond the present Dial-A-Ride program. They have suggested a
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scrip system similar to the Los Angeles "Cityride" program whereby seniors and persons
with disabilities may purchase scrip from the City which can be used to pay for taxi fares
up to a specific limit per ride. To be eligible for the Los Angeles program, individuals
must be a resident, be 65 or older or' have a mobility impairment as certified by their
Metro-disabled ID card. Approximately 25% of eligible Los Angeles residents
participate in the program. Qualified residents may purchase from the City a limited
amount of scrip each quarter at a cost of less than 20% of the value of the scrip. They
may then use the scrip to pay for up to $12 of the cost of a cab ride in achy-franchised
cab. The cab companies redeem the used scrip with the City for the full face value. The
Los Angeles program is fully funded by Prop A funds. However, while usage of the LA
CityRide program for discounted taxi transportation has been high, it has experienced a
significant amount of fraudulent scrip purchase from residents by taxi drivers, which has
been costly for the City to monitor and prosecute.
Staff estimates that in Santa Monica there are approximately 14,500 senior residents
and an additional 2,500 mobility impaired non-senior residents who would be eligible for
a similar program. If 25% of eligible residents were to use a program with provisions
similar to the LA CityRide service, which provides $84 in scrip fora $15 purchase price
each quarter, the annual scrip redemption cost to the City would be $1,173,000. This
would subsidize 28 one-way trips per year for an eligible resident, at a maximum
subsidized taxi fare of $12 per trip. The passenger would be responsible for paying in
cash any fare amount over the $12 subsidized limit.
The current Dial-A-Ride service administered by the Big Blue Bus provides discounted
door-to-door transportation options for seniors and residents with mobility impairments
and their personal attendants. This contract service provides shared van transportation
for any purpose to and from any location within the City and to medical centers outside
the City limits. Operating hours are 8 am to 6 pm Monday through Friday, 8:30 am to
3:30 pm on Saturday, 8 am to 1:30 pm on Sunday, and to any point in the City during
the evening on the dates of City Council meetings. A flat fare of 50 cents. for a resident
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and 25 cents for a personal attendant is charged for each one-way trip. There is no limit
on the number of trips a qualified rider may make. However because availability is
limited, qualified residents are advised to reserve aDial-A-Ride trip as soon as their
plans .are finalized, up to six days in advance. A limited taxi ride back-up program is
available for medical appointments that cannot be rescheduled and that cannot be
accommodated by advance request on Dial-A-Ride vans.
The Commission for the Senior Community, the Disabilities Commission and staff have
reviewed several times the possibility of implementing a taxi scrip/coupon program to
augment the Dial-A-Ride service but have concluded that the costs were prohibitive.
Alternatives
The City could continue to operate the present open-entry system but this approach
makes it extremely difficult to enforce additional standards which might be established.
An open-entry system does not permit the City to regulate either the number of taxicabs
or entry by companies and would therefore do nothing to reduce the number of taxicabs
/cab companies or provide any mechanism to incentivize the use of low emission or fuel
efficient vehicles.
The City could adopt a "medallion" system similar to New York City's whereby a capon
the number of vehicles is established with provision for the automatic renewal of
vehicle licenses and for the transfer/sale of licenses between vehicle owners,
conditioned only on City approval of the new owners' qualifications. The initial sale of
the medallions would provide one-time revenues to the City, but the medallion would
then become a commodity to be re-sold by the owner. While this system would limit
the number of taxicabs, it does not provide any mechanism for incentivizing low
emission/fuel efficient vehicles and makes enforcement of service standards extremely
difficult.
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Financial Impacts & Budget Actions
There is no legal limitation on the amount of franchise fees that the City may impose for
the exclusive/limited privilege of operating a taxicab business on public city streets. The
costs to support, administer and enforce a franchise system can be recovered through
franchise, permit and inspection fees paid by the taxicab companies and drivers.
Administration of the proposed franchise system would be performed by the Traffic
Division of the Police Department and would consist of annual review of the franchise-
holder's performance, on-going .processing of vehicle and driver permits, and
supervision of the vehicle inspection/certification process by acity-designated facility.
Prepared by:
Pamela McGanrey, Acting Revenue Manager
Approved: Forwarded to Council:
Elaine Polac ek
Deputy City Manager
~fnont Ewell
Manager
Attachments:
1 -Executive Summary, Santa Monica Taxi Study
2 -Technical Memorandum, Santa Monica Taxi Study
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ATTACHMENT 1
Santa IVlonica Taxi Study
EXECUTIVE SUMMARY
July 2008
Nelson) Nygaard
consulting associa ces
In Association with
Total Contract Solutions, Inc.
TWJ Consulting LLC
Santa Monica Taxi Study EXECUTIVE SUMMARY
CITY OF SANTA h10NICA
The City of Santa Monica has identified a need to assess and improve its methods of regulating
taxicabs. In 2006, the City Council directed staff to research and evaluate whether the City should
consider franchising taxicabs in conjunction with developing an ordinance to set air quality
performance standards for awarding taxi franchise agreements.
Issues with Taxicabs in Santa Monica
The City currently has an open-entry system of regulation that has enabled large numbers of
taxicabs to operate in the City, including many operated by self-employed individuals and local
entrepreneurs. The result has been an abundance of service, with many options to choose from
for residents, tourists, and business travelers. However, the system has also resulted in a variety
of problems that have been documented through interviews with City staff, business
representatives; taxicab drivers, and taxi company owners and managers, and through
observation of taxicab operations. In Santa Monica, as in other cities with open-entry regulation,
experience has shown that market forces are not sufficient to ensure quality service and an
economically healthy taxicab industry. Specific issues that have been documented include:
• Too many cabs, especially independents that rely for business on walk-ups at taxi stands
and hotels
• Parking and traffic issues, downtown and on Santa Monica Pier
• A wide and confusing range of fares, including some very high fares
• Passenger complaints about high fares and overcharging
• Difficulty investigating complaints and enforcing rules, including insurance.
• Driver behavior issues, especially downtown
• .Low driver incomes, which re-enforce other problems
• Air pollution from old vehicles and vehicles cruising for business
• Drivers operating Illegally in Los Angeles
The system requires a significant level of effort by City staff for administration and enforcement.
Changes introduced in 2004 made some improvements but the fundamental problems remain.
Regulations used by many other cities but not by Santa Monica include:
• Taxicab companies: limits on number of companies and rules that lay out requirements for
operating as a taxicab company
• Numbers of taxicabs: rules that control the total number of taxicabs that can operate in the
city in order to avoid destructive competition and to allow companies and drivers to
achieve reasonable earnings
• Fares: a maximum fare or one specific fare structure
• Color schemes and numbers: requirements for distinctive color schemes and names for
each company, and unique numbers on vehicles, that enable customers to easily
distinguish among companies, and that help City staff enforce rules and investigate
complaints
• Vehicles: age limits or strict standards for appearance and safety
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Santa Monica Taxi Study
CITY OF SA N~T ~A~MONICA
EXECUTIVE SUMMARY
e Dispatching: requirement for effective radio or computer dispatching that avoids drivers
having to rely on walk-up business, ensures comprehensive service to customers, and
improves security
o Driver qualifications: required training or tests for knowledge of rules, geography, and
English
In addition to these widespread rules, many cities have instituted rules requiring:
s Discounts for elderly and disabled riders
e Some portion of each fleet consisting of wheelchair accessible vehicles
e Vehicles that meet rules concerning air quality or fuel efficiency
The Taxicab Industry in Santa Monica
Based on permits issued in October of 2007, there are 412 permitted cabs in-Santa Monica,
including 18 operated as one-cab companies and another 65 cabs operated in companies with
two to five cabs. "Los Angeles companies" (i.e. companies that are franchised in Los Angeles)
account for 154 cabs or 37% of the total
Compared to other cities, Santa Monica has many more taxi companies and also more taxicabs
per population. Of the cities examined for this study, only West Hollywood has more taxicabs per
population than Santa Monica, but most of West Hollywood's taxis actually work in other cities,
including Los Angeles, most of the time.
Despite heavy competition, taxis in Santa Monica mostly charge higher rates than taxis. in other
cities. The Los Angeles taxi companies charge the rates set by the Los Angeles Department of
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Santa Monica Taxi Study EXECUTIVE SUMMARY
C I T Y O F S A~N T A~M O N I C A ~.~~~ ~ ~^ ~~ _ ~~~ _ ~~~
Transportation (LADOT), which are currently $2.65 for the first 117th mile and $0.35 for each
additional 1/7th mile ($2.45 per mile). For afive-mile trip, the total would be $14.90. The most
common rate charged by companies licensed only is Santa Monica is $1.90 for the first 1/18th
mile and $0.20 for each additional 1/18th mile ($3.60 per mile). At these rates, the total for afive-
mile trips would be $19.90, 34% higher than the total with the Los Angeles companies. Managers
of some Santa Monica companies justify their higher rates by pointing to the fact that they have to
travel empty when returning from a trip into Los Angeles and the many short, local trips they
provide, including trips for older people going shopping. Some local companies operate newer
more luxurious vehicles.
The City requires taxi companies to charge a flat rate for trips to LAX. The Los Angeles
companies charge the rate set by LADOT, which is $30. The most common rate charged by
companies licensed only in Santa Monica is $45, but some offer advertised or unadvertised
discounts. This flat rate corresponds to the meter rate for about 12 miles, which is the distance
from Santa Monica City Hall to LAX by freeway. But for some residents of the southern part of the
city, a trip to LAX by surface streets would be seven miles or less and would cost about $27 using
meter rates.
The large number of taxicabs limits drivers' ability earn a living. The actual size of the market for
taxi trips is unknown. However, even assuming that demand for taxi trips is very high compared
to other cities, taxi drivers in Santa Monica are currently making only about $24,000 per year
working six days a week. Taxis are significantly underutilized and could easily carry more
passengers in an average shift.
Options for Improving Conditions
A number of methods can be used to address issues with taxicabs in Santa Monica. All of these
have certain features in common, including:
• Regulations that apply to companies; as well. as to individual drivers and vehicles
• Measures intended to avoid an oversupply of cabs
• Standards designed to improve service quality
• Requirements for low-emission vehicles
The overall approaches can be grouped in three options according to their emphasis. These are:
1. Set minimum standards for companies, vehicles, and drivers
2. Regulate the number of taxicabs
3. Regulate entry by companies
Option 1: Minimum Standards
No matter what overall approach to taxi regulation is used, it should include minimum standards
that apply to taxicab companies, as well as standards that apply to vehicles and to drivers.
Minimum company requirements should include:
A minimum taxicab fleet size. A reasonable minimum fleet size based on other cities would be
25 vehicles permitted in Santa Monica. The intent of a minimum fleet size is to ensure that
companies have enough vehicles to justify the overhead of a dispatch system and professional
company management. A minimum fleet size need not eliminate independent drivers. In other
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Santa Monica Taxi Sty
CITY OF SANTA MONICA
EXECUTIVE SUMMARY
cities independent drivers have been able to comply with minimum fleet size requirements by
banding together into associations.
Centralized dispatching. A dispatch system should have the ability to make trips available to
drivers throughout the city without favoring any driver, while minimizing response time during all
times that the company's vehicles are operating. Centralized dispatching ensures availability of
service, helps drivers obtain business, and avoids having drivers who are entirely dependent on
finding business on the street. Centralized dispatching goes beyond calling drivers on cell
phones, for example using voice radio optionally combined with a computerized digital dispatch
system.
A staffed place of business. Companies should maintain a staffed place of business where
required records are kept and can be inspected by the City, and customers can file complaints
and retrieve property left in vehicles.
Distinctive color schemes and names. Each company should have a distinctive color scheme
and name that are easily distinguishable from color schemes and names of other companies
operating in Santa Monica and nearby jurisdictions. This avoids customer confusion,. encourages
companies to invest in building up their businesses, and helps the City follow up on complaints.
Unique taxicab numbers. To aid in enforcement and complaint investigation, the City should
assign a unique number to every taxicab which would be permanently and prominently displayed
on the exterior of the vehicle, posted on the vehicle interior and, if the City decides to require
printing meters, would be printed on a receipt generated by the taxicab meter. -The number would
be unique to each taxicab in the overall fleet of vehicles operating in the city.
Recordkeeping. Companies should be required to keep dispatch logs. Drivers should also be
required to keep logs showing trips that they carry, including trips that were dispatched to them
and trips that they obtain on the street, at hotels, or by personal calls. These records will be an
aid to enforcement and also can help the City assess the economic health of the taxicab industry
in order to determine if changes are needed to reduce or increase the supply of taxicabs.
Maximum rates and posting of rates. Companies should be free to set their own rates, within
limits set by the City, including a maximum meter rate and a common mileage increment that all
companies must use, as well as maximum flat rates for airport trips. The mileage increment
should be compatible with requirements set by the City of Los Angeles, which currently requires
mileagecharges per 1/7t" of a mile. A maximum rate corresponding to $19.90 for a flue-mile trip
would include the fares currently charged by 88% of all permitted taxis in the city. Most regional
companies would probably continue to charge lower rates, consistent with those required in Los
Angeles. The City should require that rates be posted on the exterior of each cab, as well as in
the interior. There should be two flat rates to LAX, one for the area south of the Santa Monica
freeway, and one for the area north of the Santa Monica freeway.
Driver training. Companies should be responsible for training their drivers. The training should
cover City regulations, company procedures, defensive driving, map reading, local geography,
customer relations, security and public safety, and requirements for non-discrimination in
treatment of people with disabilities.
Responsibility for drivers. Companies should be responsible for their drivers' compliance with
City regulations and laws. This should include financial responsibility for fines and company-
specific penalties for a persistent pattern of driver violations.
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CITY OF~3 AN TA MONI.CA ~~
EXECUTIVE SUMMARY
Marketing. Companies should be required, at a minimum, to maintain a listing in the local
telephone directory and Yellow Pages to ensure that potential customers can contact the
company and to ensure that drivers are not dependent on walk-ups and street hails for business.
Wheelchair Accessibility. Initially, each company should be required to have at least one
wheelchair accessible taxicab in service at all times. Since the demand for this service is not
known, a flexible standard may be needed that would apply beyond the initial requirement. For
example, each company could be required to show that it can respond to a request for wheelchair
accessible service within a specified response time, such as 15 minutes.
Low-emission vehicles. Companies should be responsible for ensuring that their fleets meet
environmental standards set by the City. A requirement that all vehicles meet the California Air
Resources Board SULEV (super ultra-low emission vehicle) standard should be phased in over
three years to avoid the risk of significant disruption to the taxicab industry in Santa Monica.
Vehicles meeting the SULEV standard will generally cost more than vehicles typically used as
taxicabs. However, an economic analysis for this study confirms that savings from reduced fuel
usage can result in lower total cost over the life of the vehicle. Wheelchair accessible vehicles
should be exempt from the SULEV requirement until suitable wheelchair accessible vehicles
become available.
Financial stability. Companies should be required to submit evidence that they have sufficient
financial resources to comply with all of the minimum company standards.
In addition to these company standards, regardless of the overall regulatory approach chosen by
the City, there should be enhanced requirements relating to vehicles, drivers and insurance.
Vehicle requirements. In addition to meeting air pollution standards, all vehicles should be
required to pass a thorough inspection for safety, required signage and markings, and meters. To
make the inspection meaningful, all inspections should be done by a single entity designated by
the City. If the City does not wish to perform inspections itself, then a private entity should be
designated through a competitive selection process.
Drivers. In addition to completing the training that companies are required to provide, drivers
should continue to obtain permits from City, but using expanded and more precise standards. At
a minimum violations of taxicab regulations in other jurisdictions should be added to the grounds
for permit denial. Also the City should ensure that it is notified by the Department of Motor
Vehicles about licensing actions and by the Department of Justice about arrests.
Insurance. For purposes of consumer protection the City should increase the required level of
liability insurance on taxicabs to $1 million combined single limit.
All of these requirements together might be able to address many of the current issues with
taxicabs in Santa Monica without needing to involve the City in selecting companies or regulating
numbers of taxis. In principle, market forces could then be allowed to determine the right number
of cabs and companies. If further measures were needed, they could be taken in the future as
needed. However, experience in other cities has shown that market forces are not always
enough. It is possible that there could still be too many cabs and numerous companies, with
resulting service problems and poor earnings potential for drivers. It is also possible that the cost
of complying with the new requirements combined with the financial uncertainty of unlimited
competition could result in the taxi market being dominated by regional companies based in Los
Angeles and other cities.
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CITY OF SANTA MONICA
Option 2: Regulate the Number of Taxicabs
In addition to setting minimum standards, the City could restrict the total allowable. number of
taxicabs. The appropriate number of cabs would be established at a level high enough to provide
sufficient service but not so high as to dilute the ability of drivers to earn a living or of companies
to earn a reasonable profit. The number would be based on comparisons to other cities, current
service levels, or an economic analysis of taxicab operations in the city. Adjustments would be
made to respond to changing circumstances. If the limit on the number of cabs is a meaningful
one, theh a process is needed to determine who gets to operate a taxi or a taxicab company.
Many cities regulate the number of taxicabs. Commonly companies are required to demonstrate
"need and Necessity" in orderjustify additional taxi permits or to obtain a license to begin
operating. This is often a political process involving public hearings before a taxicab commission
or advisory board, although formulas and service analysis can be used to inform the process. The
political process may be strongly influenced by the taxi companies themselves.
For Santa Monica, there are serious drawbacks to a process that focuses principally on regulating
the number of taxicabs. The correct number of taxicabs is not known. For this study, an analysis
was conducted based on other cities, the current structure of the taxi business in Santa Monica,
and the economics of driving a taxi in the city. Because of lack of data, it was necessary to make
numerous assumptions about the actual level of taxicab business and the costs of operating a .
taxi. Depending on these assumptions, and depending on the mix of taxicabs that operate only.. in
Santa Monica or also operate in other cities (especially Los Angeles), a desirable number of
taxicabs for the city could range from less than 200 to more than 300.
If the City were to set the allowed number of taxicabs, and if there is a minimum size for a taxicab
company; then. it would also be necessary to decide which companies can operate and how many
taxis each company could operate. This suggests that a process that focuses principally on
selecting companies may be a more straightforward solution for Santa Monica.
Option 3: Regulate Entry by Companies
In addition to setting minimum standards, the City would establish a competitive selection process
to award franchises to a limited number of companies. Companies would be encouraged to
propose enhancements that go beyond the minimum requirements, and these enhancements
would be used by the City in determining which companies would receive franchises and how
many taxicabs they could operate.
This type of system could limit competition sufficiently to provide economic viability for drivers and
companies while still allowing flexibility in taxicab numbers. The City could use a familiar request
for proposals process to award franchises, and apply selection criteria through a purely
administrative process. The selection process would create incentives for companies to offer
enhancements that exceed. minimum requirements. The-City could explicitly favor local
companies and determine a desirable balance between local and regional companies. This type
of process is not common in the U.S. overall, but it is common in Southern California,. so there are
nearby examples and staff with experience that the City can draw upon.
The selection process would need to be designed to provide clarity and objectivity, while allowing
some degree of flexibility. Based on experience in other cities, it is possible that the results would
be challenged by losing companies.
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CITY OF SANTA MONICA
In principle; the City could let the companies that receive franchises decide for themselves how
many taxicabs to operate, just as other competing business decide on the scale of their
operations. A danger in this approach is that qualified. applicants may be deterred by the high
initial cost of meeting the proposed minimum requirements if there are no limits on the number of
cabs that can be operated. As in Option 1, the result could be dominance by a few regional
companies.
Recommended Process
The recommended process is based on Option 3, which incorporates the. minimum standards
presented in Option 1. The City should issue an RFP to award franchises to between four and
eight companies to operate taxicab service in Santa Monica. Fewer than four franchises would
not provide effective competition or allow for a sufficient balance of local and regional companies.
More than eight franchises would make it difficult for the companies to compete effectively and
would unduly restrict the size of fleets that any one company could operate. Provisions of the
RFP should. include:
The City will award franchises to one ormore regional companies, i.e. companies that
operate in other cities as well as Santa Monica
• The City will award franchises to three or more local companies, i.e. companies that
operate in Santa Monica only.
• All taxicab companies will be required to meet all of the minimum requirements described
in Option 1 regarding minimum fleet size, centralized dispatching, fares, low-emission
vehicles, etc.
• The City will authorize all franchisees combined to operate approximately 200 "full-time
equivalent" taxicabs in Santa Monica, where a cab that operates only part time in Santa
Monica is counted according to the percentage of the time that it operates in the city.
• Each proposer must submit a comprehensive business plan with two options, one for a
desired fleet size, and one for a minimum acceptable fleet size: The business-plans would
need to show financial viability and include a description of the dispatch system, a fleet
plan, a hiring and training plan, a proposed color scheme and name, proposed rates, a
marketing plan, a management plan, ownership information, and proposed lease rates
and fees that would be charged to drivers.
The City will then rate the proposals using selection criteria based on the RFP requirements and
enhancements offered by the proposers. Starting with. the highest rated proposal, the City would
allocate permits within the companies' proposed fleet size ranges up to the desired total number
of full-time equivalent cabs, taking into account the desired number of companies and the desired
balance between local-and regional companies.
After the initial selection process, companies could apply to increase their authorized fleet sizes.
Increases would be granted if the company can show, through both dispatch logs and driver logs,
that their existing fleet is well utilized. Companies that are. not using some of their permits or
whose drivers are not getting enough business or consistently violate taxi zone or parking rules
would have their minimum fleet sizes reduced.
Administering and enforcing the new system would require some additional staffing beyond that
currently devoted to taxicab issues. Based on preliminary research by the City Attorney, there is
no legal bar to the City setting franchise fees at a level that would recover the full cost of all staff
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Santa Monica Taxi Stud
CITY Or SANTA MONICA
EXECUTIVE SUMMARY
time and expenses rated to administering the new process. Costs of continuing enforcement
could be covered from a combination of franchise fees and any penalties assessed against
drivers or companies.
The franchises should be for a minimum of three years, with additional one-year extensions as
long as permitted by the City code. If one or more companies ceases operation in Santa Monica
or has its franchise revoked, a supplemental RFP could be issued.
In principle, the recommended process would allow for continuous adjustment of the allowed
number of full-time equivalent taxicabs, using on-street observation, analysis of records kept by
the companies, and review of complaints received by the City. In addition, at any time, the City
could undertake a comprehensive review of the total authorized number of cabs.. Such a review
would be appropriate if the City decides to issue a new RFP for franchises. Factors suggesting
that the authorized number should be reduced would include underutilized cabs, a pattern of
parking and on-street waiting violations, complaints about taxis cruising for business, and short
response times for telephone orders. Factors suggesting that the authorized number should be
increased would include fully utilized cabs, a scarcity of cabs at .taxi stands, and long response
times for telephone orders.
Page 8 • Nelson\Nygaard Consulting Associates Inc.
ATTACHMENT 2
Santa Monica Taxi Study
TECHNICAL MEMORANDUM
March 28, 2008
(Corrected May 2008)
Neisanl Nygaard
consulting associates
In Association with
Total Contract Solutions, Inc.
Roger Teal, Ph.D.
Santa Monica Taxi Study Technical Memorandum
CITY OF SANTA~MONICA~~
Table of Contents
PAGE
Chapter 1. Introduction ......................................................................................................1-3
Chapter 2. Existing Conditions .....................................................................:....................2-1
Taxicab Regulation in Santa Monica .................... .................................................................2-1
Size and Composition of the Taxicab Industry ..... .................................................'................2-6
Fares ..................................................................... ................................................................. 2-7
Perceptions and Concerns about Taxicabs .......... ........:...................:............................:.......2-9
Chapter 3. Methods for Improving Conditions .................................................................3-1
Finding the Right Number of Taxicabs .............:.... :................................................................3-1
Controlling the Supply of Taxicabs ....................... .................................................................3-4
Specific Company Requirements ..................:....... .................:...............................................3-8
Driver Background and Qualifications Standards ............................................................:..3-15
Vehicle Emissions Requirements ......................... ............................................................:..3-16
Vehicle Standards and Inspection ........................ ...............................................................3-24
Fare Regulations ................................................... ...............................................................3-25
Insurance .............................................................. ............................................................... 3-26
Service to Hotels .................:................................. ....................:........................................:.3-27
Enforcement and Administration ........................... ...............................................................3-27
Senior and Disabled Discounts ....................:........ ...............................................................3-30
Chapter 4. Economic Analysis ..........................................................................................4-1
Chapter 5. Recommendations ..........................................:................................................5-1
Appendix A. Peer Review
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CITY OF SANTA MONICA ~~ ~~
Table of figures
PAGE
Figure 2-1 Taxicab Regulation in Santa Monica and Other Cities ..................................... ..2-2
Figure 2-2 Population and Taxicabs in Santa Monica and Peers ...................................... ..2-7
Figure 2-3 Distribution of Taxicabs by Company Size ....................................................... ..2-7
Figure 2-4 Taxi Fares in Santa Monica .............................................................................. ..2-8
Figure 2-5 Meter Rates and Company Size ...........................................:........................... .:2-9
Figure 2-6 Most Common Traffic Violations .....................................................................:. 2-13
Figure 2-7 Most Common Parking Violations ....:.................................:............:................ 2-13
Figure 2-8 Downtown Taxi Zone Observations ...:.............................................................. 2-18
Figure 3-1 Hypothetical Limits based on Comparison to Other Cities ............................... ..3-2
Figure 3-2 Super Ultra Low Emission Vehicles ..................:............................................... 3-18
Figure 3-3 SULEV vs. Crown Victoria: Difference in Total Cost/Day ................................. 3-21
Figure 3-4 Breakeven Capital Cost Depending on Fuel Cost and SULEV Fuel Economy
Advantage (150 Taxi Miles Per day) ................................................................ 3-22
Figure 3-5 Percent of Permitted Taxis within Specified Fare Limits .................................. 3-25
Figure 3-6 Impact of Proposed Changes on Enforcement and Staffing ............................ 3-29
Figure 4-1 Estimated Taxi Industry Revenues and Costs - Current Situation .................. ..4-2
Figure 4-2 Estimated Taxi Industry Revenues and Costs- New System ......................... ..4-4
Page ii .Nelson\Nygaard Consulting Associates Inc.
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CITYOF SANTA MONIGA
har 1.
. Technical Memorandum
0nroduc#i®rt
The City of Santa Monica has identified a need to assess and improve its methods of regulating
taxicabs. The City currently has an open-entry system of regulation that is typical of
arrangements in many cities that deregulated taxicabs in the 1970s and 1980s. This style of
open-entry regulation has enabled large numbers of taxicabs to operate in the City, including
many operated by self-employed individuals and local entrepreneurs.
The result has been an abundance of service, with many options to choose from for residents,
tourists, and business travelers. However, the system has also resulted in congestion, parking
problems, high and confusing fares, and service complaints. The system requires a significant
level of effort by City staff for administration and enforcement. Changes introduced in 2004
made some improvements but the fundamental problems remain.
In 2006, the City Council directed staff to research and evaluate whether the City should
consider franchising taxicabs in conjunction with developing an ordinance to set air quality
performance standards for awarding taxi franchise agreements. This report provides the
requested research and evaluation, including examination of franchises and other options. The
report is organized as follows:
Chapter 1 sets the stage by detailing existing conditions, including the current system of
regulations, the size and composition of the taxicab industry in the city, fares charged by various
companies, and perceptions and concerns about taxicabs. This chapter draws on extensive
data provided by the City, interviews with City staff and business community representatives,
data gathered from peer cities, and interviews with taxi drivers and managers.
Chapter 2 reviews methods for improving conditions. It includes a review of evidence about an
appropriate number of taxicabs in Santa Monica, methods that can be used to regulate the
number of cabs and companies, methods for regulating fares, and requirements that can be
made specific to taxicab companies. It also addresses driver requirements, vehicle inspections,
emissions standards, insurance, service to hotels, enforcement and administration, wheelchair
accessible cabs and discounts for seniors and people with disabilities.
Chapter 3 provides an economic analysis of the taxicab industry, showing how operating costs
and available demand for service determine the earnings of taxi drivers. The analysis illustrates
the impact of reducing-taxi numbers as well as the impact of added costs due to environmental
regulations.
Chapter 4 provides preliminary recommendations for discussion with City staff.
Appendix A provides detailed information from four peer cities.
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tr isti nditions
Taxicab Regulation in Santa Monica
Taxicab regulation by City of Santa Monica includes rules concerning:
• Driver background checks, drug testing, and proof of association with a company.
• Required liability insurance coverage
• Vehicle safety checks by a state certified mechanic
• Prohibition of waiting for business except at taxi stands or leaving a vehicle unattended
in a taxi stand more than three minutes.
• Posting a complaint information card and a schedule of rates inside each cab
• Exclusive use of the cab by the passenger
• Taking the most direct route
• .Use of taximeters and flat rates for airport trips
• Placement of business license decals by the Police Department on each taxicab
However, Santa Monica lacks rules governing many other issues that are regulated by many
cities, including:
• The total number taxicabs that may operate in the city
• The standard or maximum fare that may be charged
• Use of distinctive color schemes (sometimes called "liveries") to identify each company's
vehicles
• Radio dispatching
• Driver training or testing
Santa Monica either has no rules or very flexible rules on all of these issues, as summarized in
Figure 2-1. Many cities have restrictions on taxicab companies, in addition to rules that apply to
drivers-and vehicles. The rules take various forms, including limits on the numbers of
companies, requirements that companies obtain certificates of convenience and necessity (a
way to control entry to the market), competitive awarding of franchises, and detailed
requirements for "full-service" operation. In Santa Monica there are no limits on the number of
taxi companies and no requirements that apply to companies other than obtaining a business
license, obtaining permits for one or more vehicles and operators, and filing rates.
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Figure 2-1 Taxicab Regulation in Santa Monica and Other Cities
issee . . -:. ~ ~" ~ . R~[es in OtherC~ties `~ ~ = Santa Monica
Taxicab companies Limited number of companies Business license, register one
and/or detailed rules applying to or more vehicles and drivers, file
com anies meter rates and flat fares
Number of taxicabs allowed Maximum number No limits
Fares Maximum fare or one specific fare Companies must file fares,
structure including flat rate to LAX and
Burbank air ort.
Color schemes Distinctive color scheme for each No rules
com an
Vehicles Age limits or strict standards for Inspection by any state certified
a earance and safe mechanic
Dispatching Radio or computerdispatchis No rules
re wired
Driver qualifications Many cities require training No rules
ro rams or tests
In addition to these widespread rules, many cities have instituted rules requiring:
• Discounts for elderly and disabled riders
• Some portion of each fleet consisting of wheelchair accessible vehicles
• Vehicles that meet rules concerning air quality or fuel efficiency
More detail about differences between Santa Monica and four peer cities is provided in
Appendix A. The rest df this section provides ah outline ofYUles and procedures for regulating
taxicabs in Santa Monica. The rules that govern taxicabs are contained in Chapter 6.48 of the
Santa Monica Municipal Code and in supplementary regulations adopted by the City Manager in
2004 as provided for in the code.
Taxi Companies
Each company must obtain a business license and vehicle decal for each vehicle operated.
Companies must also register their rates with the City. Technically, this provision applies only to
companies in their capacity as vehicle owners. In practice, administrative procedures
established by the City require each company to coordinate permit applications for all drivers
and vehicles affiliated with that company, and to submit all the required paperwork and fees in
one packet. Companies are also required to verify that a driver is "employed" by that company
and to notify the City if a driver is terminated. In practice this provision is applied to independent
contractors and owner-operators, since few if any drivers are employed by taxi companies.
Many companies are not incorporated, but are cooperatives or associations of owner-operators.
Rates
Taxi companies are free to set their own rates, but they .may not charge rates higher than those
registered with the City. The rates filed must include flat rates to LAX and Burbank airport, which
must be the rates charged for trips to those destinations. Rates must be posted inside the cab,
.but do not have to be posted on the exterior, which would allow walk-up customers to
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comparison shop. However, some companies do post their rates on the exterior. Companies are
allowed to offer discounts and some do.
Drivers
Each driver must obtain a police permit, which must be displayed in a permanent hdlder in the
taxicab any time that driver is operating the vehicle. The application procedure involves
submitting required information, payment of fees, and a background check by the Police
Department. A complete application includes:
• Completed Taxicab Driver Police Permit application (includes residence, SSN, past
employment, personal references, arrestYecord)
s Certificate of Employment completed by the taxi company (on the reverse of the police
permit form)
e Original negative drug and alcohol test report
e Required fees:
Taxicab Drivers Police Permit Fee $ 81.53
Taxi Driver Annual Processing Fee $139.59
Fingerprinting Fee (New Applicants only) $100.24
Duplicate or Change Of Cab Company Fee $ 45.50
The Police Department obtains a DMV record for each driver, conducts a criminal background
check using the California Department of Justice (DOJ) Live Scan system, and conducts a
check of outstanding warrants. The Police Department may disapprove any applicant who
makes a false statement on the application or who has a record of criminal conduct or other
behavior involving any of the following:
1. Moral turpitude;
2. Violence toward persons or property;
3. Physical or mental disease which could make the applicant a danger to the safety of
others;
4. Illegal sexual conduct involving another nonconsenting person;
5. Negligent orteckless driving;
6. Operating a motor vehicle while under the influence of alcohol or drugs; or
7. Acts showing the applicant to be otherwise incompetent or not fit to drive a vehicle
for hire.
The permits include the name and photograph of the applicant, date of expiration of the permit,
and the name of the taxicab company for which the driver is authorized to drive. All of the
permits expire on September 30`h of each year, and can be revoked at any time for violating
provisions of the taxi code or for any reason that would have triggered denial of the application.
The Police permit becomes void if a driver is no longer working for the company specified in the
application. The company is required to immediately give the City written notice of the
termination, and the terminated driver is required to immediately return the Police permit to the
City. Every time a driver changes taxicab companies, he or she must immediately return the
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driver's police permit to the City and apply for a new police permit with the new company's
information on the application. In practice, enforcement of this provision has sometimes been
problematic
Vehicles
Vehicle owners are required to obtain a business license for each cab, provide proof of
insurance, and obtain a vehicle decal. A complete application packet includes an insurance
policy with a required endorsement, including a schedule of all covered vehicles, and for each
cab:
• Business license renewal form
• Completed Taxicab Owner Police Permit application (includes residence, SSN, past
employment, personal references, and arrest record)
• Meter certificate from the State Department of Agriculture, Division of Weights and
Measures
• Safety certification from a state certified mechanic
• A photocopy of the vehicle registration
• A schedule of taxicab rates
• Owner contact information
• Required business license tax and fees:
Police Permit Fee
Fingerprinting Fee
Business License Tax
Tax penalties if any
Taxicab Processing Fee
Decal Fee
$ 68.24 Per Owner
$100.24
$250.00 Per Vehicle
10% per month after October 31
$139.59
$ 73.00
Interior signage in each taxi vehicle has to include 1) a card showing the cab owner's name,
business address, and telephone number, together with the rates to be charged by the vehicle;
2) a card saying "COMPLAINTS?" and the City's complaint hotline number; and 3) a
permanently placed holder for the driver police permit with a message, visible if the holder is
empty, that states such a permit is required to be displayed.
Exterior signage on each taxi vehicle must include the name of the-cab company, its telephone
number, and the cab number printed on the door and on the rear of the vehicle. However, there
is no requirement that the cab numbers be unique. The letters must be at least 2% inches high
and five-sixteenths of an inch wide.
The regulations state that, "Neither vehicle safety inspections nor taximeter checks shall be
conducted by the City of Santa Monica. The City assumes no responsibility whatsoever for the
accuracy of vehicle safety inspections or taximeter checks conducted." In practice, all vehicles
are brought to the police department for a review, which does ihclude some minimal inspection,
verification that the vehicles are the same ones specified in the safety inspection and meter
certificate documentation, and looking for obvious evidence of rigged meters. .
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The decal may be removed by the police at any time if the vehicle is found to be in an unsafe
operating condition or operating without City approved insurance; if the taximeter is found to be
operating at a rate other than authorized, or is not operable; if equipment defects have not been
fixed with the time allowed after they were found; if the taxicab is operating without a valid decal
issued for that vehicle; or if the driver is operating without a valid driver's police permit.
The required insurance limits are: $100,000 per person for bodily injury, $300,000 total in bodily
injury coverage per accident, and $50,000 property damage. The City of Santa Monica, its
officials, officers and employees must be included as additional insured and 30 days notice of
cancellation must be provided.
Penalties.
Violations of the taxi code may be an infraction, punishable by a fine up to $250, or a
misdemeanor, punishable by a fine up to $1,000 per violation and/or up to six months in jail.
Administration
The Revenue Department (formerly known as the License Department) is the central point of
contact and coordination for taxi licensing and permitting. Based on changes made in 2004 the
City now requires each taxi company to submit one packet with all the necessary paperwork for
all of the drivers who work for that company and all the vehicles they drive, along with payment
for all of the fees for these drivers and vehicles. This applies to the annual process for taxi
business licenses, driver police permits, and vehicle police permits. All of these expire on
September 30th of each year; a one month grace period is allowed for renewal. After October
31st there is a 10% per month penalty on the business license tax renewal. In the past drivers
and owners would come in one at a time, creating a lot of work for staff. Some still attempt to do
this. In addition, there is constant turnover of drivers and vehicles and these need to be
processed throughout the year.
The City's Risk Manager reviews insurance documentation to ensure it meets the City's
requirements. This process is much simpler than in the past due to tightened requirements,
some of them implemented 10 or 15 years ago, and as a result of the annual process
implemented in 2004.
A motorcycle patrol officer is designated as the Police Department taxi detail. He is responsible
for receiving permit applications, conducting background checks, and inspecting vehicles. In
addition, a Forensic Technician takes ID photos and fingerprints, which are sent electronically to
the Department of Justice (DOJ) for a background check. Drivers and owners come from the
Revenue Department with their permit applications to get photographed and fingerprinted. In the
case of owners, the taxi detail officer only looks for serious offenses. No owner application has
ever been rejected.
In the case of drivers, in addition to the DOJ check (which comes back in a couple of weeks),
the officer does a warrant check and a driver's license check on his computer. This is an annual
process; only the fingerprinting is omitted in the case of a renewal. If a driver switches
companies, the officer repeats only the license and warrant checks. He denies an application if
he finds a recent DUI, a serious traffic offense such as reckless driving or hit and run, or if the
criminal history shows violent crimes. If he finds an outstanding warrant (for example for an
unpaid parking ticket); he may tell the driver to clean it up and come back although often they do
not come back. If the warrant is for something serious he may arrest the driver.
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The taxi detail officer has discretion to accept or deny permit applications. In the three years that
he has been on the taxi detail he has denied or revoked 42 driver permit applications. The most
common reason has been drunk driving. Other reasons have included reckless driving, hit and
run, drug arrests, and meter rigging. Ten driver applications from one company ahd five from
another have been denied or revoked. The rest are spread among 20 companies that operate
exclusively in Santa Monica. Two applications from drivers affiliated with one of the companies
that also operates in Los Angeles have been denied or revoked.
A driver who is denied a permit may appeal the decision. The appeals are conducted by the
City's Consumer Affairs Division. The hearings are less formal that a court proceeding, but they
do involve a court reporter and are conducted by a hearing officer chosen from a list of
attorneys who have contracts with the City. A Consumer Affairs Specialist in the Consumer
Affairs Division presents evidence for the City's action in making the denial and questions the
taxi detail officer as a witness. The driver can then present evidence, which the Consumer
Affairs Specialist rebuts. The driver can bring an attorney but none have. The Consumer Affairs
Specialist also makes a closing statement. The hearing officer issues a ruling in writing, usually
after about three weeks. The hearing takes about one hour. There have beeh approximately
four hearings in as many years, none of which has overturned the permit denial.
Size and Composition of the
Taxicab Industry
Santa Monica has more taxicabs per capita than three of the four peers that were reviewed in
detail, and many more very small companies, including one and two-vehicle companies. Figure
2-2 compares Santa Monica with four peers with respect to population, population density,
taxicabs, and taxicab companies. Comparing the number of cabs in each city present a number
of problems since many cabs are permitted in multiple jurisdictions and do not always operate in
a specific city. In Santa Monica, of the 412 cabs, 37% are also permitted in other cities,
especially Los Angeles. As a result the "effective number" of cabs in Santa Monica is probably
less than the figure of 4.9 cabs per 1,000 residents shown in the figure. However, interviews
with companies did not produce any data that could be used to make a meaningful adjustment.
Since none of the peers is perfectly comparable to Santa Monica, and their numbers are so
disparate, we have added a fifth point of comparison using recent work conducted by
Nelson\Nygaard in Arlington, Virginia. Arlington is located directly across the Potomac River
from Washington, DC and includes a substantial concentration of office development and
hotels. It also includes Reagan National Airport, which requires a separate licensed; and about
one-third of the licensed taxis provide service there.
West Hollywood is the only peer city that has more cabs per capita than Santa Monica. It is also
much denser than Santa Monica and is known for active night life, both of which make it an
attractive taxi market. Also, 75% of the cabs in West Hollywood are jointly permitted there and in
Beverly Hills or Los Angeles, so the actual number of cabs operating in the city on a typical day
is probably much less than shown. Casual observation indicates that there is an abundance of
taxicabs in West Hollywood at night, but relatively few during the day. The effective number of
cabs in Beverly Hills is probably somewhat less than shown as well, since Beverly Hills allows
some portion of its permitted taxicabs to be permitted in West Hollywood. None of the peers has
nearly as many taxicab companies as Santa Monica.
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Based on permits issued in October of 2007, the 412 permitted cabs in Santa Monica included
18 that were. operated as one-cab companies and another 65 cabs there were operated in
companies with two to five cabs. As shown in Figure 2-3, "Los Angeles companies' (i.e:
companies that are franchised in Los Angeles) account for 154 cabs or 37% of the total. These
companies include Yellow Cab Company, Bell Cab Co-op, Beverly Hills Cab Company, and
United Independent Taxi Drivers (UITD). Independent Taxi Owners Association (ITOA), which is
franchised in Los Angeles, is not included in this total, because it has only five cabs in the city,
which may not be permitted in Los Angeles. The Los Angeles companies have between 25 and
56 cabs apiece permitted in Santa Monica. Only the largest Santa Monica-only company, Taxi
Taxi, is in this size range.
Fares
Since Santa Monica does not set or limit fares, companies operating in the City have a wide
variety of fare structures. Figure 2-4 shows the fare structure of the ten largest companies. The
Los Angeles companies all charge the rates set by LADOT, which is $2.65 for the first 1/7th of a
mile and $.35 for each addition 1/7t" of a mile, which is equivalent to $2.45 per mile. It is
possible to have more than one rate structure programmed in a taximeter, but LADOT does not
permit any taxi permitted in Los Angeles to have a meter that contains any rates other than
those set by LADOT. The ten largest Santa Monica-only companies charge using five different
mileage increments. Among all 55 companies there are 12 different mileage increments in use.
The flat rate to LAX ranges from $30 for the Los Angeles companies to $45 for the four
companies at the bottom end of the top ten list. Among the smaller companies, the lowest rate
to LAX is $25 for ITOA and the highest is $53 for Santa Monica Yellow. The most common rate
is $45, charged by 24 companies. The flat rate for most companies is equivalent to the meter
fare fora 10 to 12 mile trip. Twelve miles is the actual distance to LAX via freeway from
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Figure 2-2 Population and Taxicabs in Santa Monica and Peers
Figure 2-3 Distribution of Taxicabs by Company Size
Santa Monica Taxi Study Technical Memorandum
CITY OF SANTA PdONICA
downtown Santa Monica. By surface streets, the same trip is only nine miles long, so many
riders would pay significantly less if they could pay the meter fare. For Santa Monica residents
who live south of 10 Freeway, the distance by surface streets is even Tess.
The rates charged by Los Angeles taxi companies are the lowest in Santa Monica, taking into
account the combined drop charge and mileage rate. Figure 2-5 shows the cost of a five-mile
trip for all 55 licensed companies. The five-mile rate for the Los Angeles companies is $14:90.
The very small companies have the greatest spread of rates, including some very high rates.
The most common fare structure is $1.90 plus $3.60 per mile ($.20 per 1/18 mile),
corresponding to a five-mile trip cost of $19.90. This fare structure is used by 17 companies
operating 86 cabs.
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Figure 2-4 Taxi Fares in Santa Monica
Santa Monica Taxi Sti
CITY OF~S~ANTA MONICA
• Technical Memorandum
Figure 2-5 Meter Rates and Company Size
$28
$26
•~ $24
F-
°_' $22
$20
~ $18
o $16
,mo
$14
LL
$12
$10
•
•
• • •
e® s
•°
0
®• •
• ® ^
•
0 10 20 30 40 50 60
Company Size
Squares =Los Angeles companies
Diamonds =Santa Monica-only companies
Perceptions and Concerns about Taxicabs
To explore issues about taxicabs in Santa Monica, the consultants:
• Interviewed City staff responsible for taxi permitting and enforcement; transportation
management; receiving and investigating complaints about taxicabs; transit service
planning; and liaison with commissions concerned with seniors, people with disabilities,
and the environment;
• .Interviewed staff of organizations that work with businesses;
• Conducted two workshops for taxi drivers and management.
• Reviewed tiles about complaints concerning taxicabs;
• Reviewed data about traffic and parking citations issued to taxicabs; and
• Conducted on-street observations of downtown taxi stands and taxis in traffic.
This section uses evidence from all these sources to explore issues about taxicabs in Santa
Monica. Th'e main issues raised with taxi service include:
• Perceived oversupply of taxis, particularly small and single-cab operators
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e Exclusive service agreements fora single company to serve a hotel
e High fares in comparison to neighboring cities, and inconsistent and confusing rate
structures
e Parking violations by taxicabs
e Complaints over lost property and failure to honor promotional coupons
e Illegal operation in Los Angeles
• Capacity of taxicab zones
• Cruising by taxicabs on Santa Monica Pier
Number of Taxicabs and Taxi Companies
Many observers believe that there are too many taxis in Santa Monica and too many very small
companies, including independents that operate only one cab. For example the Executive
Director of the Bayside Development Corporation (BDC) indicated that there seem to be lot of
iridependent cabs and a lot more cabs than needed, as shown by the fact that cabs queue up
for the zones. She noted that a smaller' number of companies and drivers would be easier to
control. Several other City staff people and the Executive Director of the Santa Monica Pier
Development Corporation (PRC) expressed similar views. City staff noted additional
administrative effort needed to deal with a large number of small taxi companies, many of whicY
have limited financial resources resulting in problems such as lapsing of insurance.
Taxi drivers and managers, in interviews and in the workshop, agreed that there are too many
taxis. In their view the excessive number of cabs make it hard for drivers to earn a living, results
in them working more hours than is safe, and reduces service quality for the public. There was
general agreement that the City should limit the number of taxicabs and/or taxi companies.
While not all independents may want to join a company, there was some support for requiring
independent drivers to affiliate into some form of association as long as these associations
could be structured in a way that served the interests of the drivers.
A useful gauge of whether there are enough cabs or too many cabs is how easy it is to obtain
service. For this study, only very sketchy information is available on this point. As documented
in the section about taxi zones, taxi zones in the downtown area tend to be full much of time
with limited turnover. City staff agreed that finding a cab in the downtown area or on the Pier is
not a problem. Determining whether this pattern extends to other portions of the City would
require additional data collection.
Santa Monica residents who need a taxi are most likely to call for service. One City staff person
who lives in Santa Monica and uses taxis frequently indicated that he never has trouble ordering
a cab: He always uses the same company and his experience is that they are always on time.
Unfortunately no data about availability of dispatch service is available. Taxi company managers
generally felt that they were able to serve telephone orders without difficulty.
Service to Hotels
Service to hotels is a distinct market from service at taxi stands and telephone orders: Many
hotels have agreements with specific taxi companies to serve their guests. Some of the larger
companies pay hotel management for the exclusive right to serve a particular hotel. Drivers also
report that hotel doormen demand payment for picking up at a hotel. In some cases, this
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appears to involve allowing independents to pick up at hotels where another company has an
agreement for exclusive service. This issue is a source of controversy among the drivers and
company management. Generally, the more established companies believe that they have
established a reputation for quality service and have earned to right make agreements with the
hotels. Independents see these agreements as unfairly limiting their access to a lucrative
market and believe the City should prohibit them.
While the question of regulating access to hotels may be controversial, it is clear at least that
the pattern of excess supply of cabs applies to the hotel market as much as it does to the cab
stand market.
Fares and Affordability of Taxicabs
The great variety of fares presents a confusing picture to anyone who is not a frequent user of
taxicabs in Santa Monica. Also, on average fares are higher than in nearby cities. It is difficult
for a customer to choose. a company based on price because rates are often not posted on the
exterior of the cab and, even when they are posted, are very hard to compare. For example,
one company charges $2.65 for the first 1/12t" of a mile and $.35 per each additional 1/121h of a
mile. Another company charges $1.90 for the first 1 /15t" of a mile and $.20 for each additional
1/15th of a mile.
According to the taxi detail officer, customers sometime complain about the differences in taxi
rates among companies. Since Santa Monica does not regulate color schemes, a customer may
complain that it costs one amount to come to Santa Monica from LAX and a different rate going
back on what appears to be the same company.
The City hears complaints from residents about flat rates to LAX. Most people like flat rates
because they eliminate anxiety over potential cheating, but people from southern Santa Monica
complain vocally because the meter fare td LAX would be less. The analysis of fares given in
Chapter 3, confirms that this difference can be substantial.
Some of-the larger companies that operate only in Santa Monica provide promotional coupons,
for example in the Yellow Pages or an advertisement.-Some companies quote lower rates on
the phone, at least in the case of flat rate trips, than they post in their taxicabs. These practices
have the effect of making less expensive service available to residents than to business
travelers and tourists.
An issue related to the cost of taxi service is the desire by seniors for a taxi subsidy program.
Members of the Commission on the Senior Community have expressed interest in a taxi
voucher program similar to ones in other communities. A staff analysis indicated it would take
about $1.4 million per year to provide the kind of program that commission members were
interested in. The same issue has continued to arise on occasion, and City staff have explained
how expensive such a program would be. The possibility of a more limited and more affordable
voucher program (for example with limited value of vouchers available or with a limited discount)
has been considered, but the consensus of the commission has been that it is more important to
focus on improvements to the Dial-a-Ride program such as additional night and weekend
service, "emergency vouchers," using taxis for paratransit trips for medical trips beyond Santa
Monica, and providing door-to-door instead of just curb-to-curb service.
The Dial-a-Ride program is available to anyone over the age of 60 and anyone with a disability
for $.50 per ride, regardless of ability to use public transportation. It operates only within the city
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and to Kaiser and the VA at certain times. The Dial-a-Ride program will provide "emergency
vouchers" to enable certain trips by taxicab at times when DAR isn't operating; for example
members of the Disabilities Commission use vouchers to attend the Commission's meetings,
which are in the evening when DAR doesn't operate. These vouchers require a $3 co-pay by
the rider.
The Senior Commission has not discussed issues of taxi service in general. Individual members
have mentioned that they take taxis when necessary. Their only comment is that cabs are
expensive.
A planner with Big Blue Bus, suggested that it would be possible to require that anyone holding
a DAR card get a discounted rate on taxi. rides. This would not involve the City in administering
coupons, monitoring misuse, etc. It would also help DAR if taxi rides were available at a
discount or flat rate. However, the City would need to enforce compliance.
Taxi drivers and company managers also provided perspectives about fares. There is general
agreement that the City should set some limits and rules about fares, but differing views about
what a desirable fare level would be. Managers of companies with taxis licensed in Los Angeles
generally prefer uniform fares among as many jurisdictions as possible. These companies are
bound by LADOT regulations which set fares in Los Angeles. Staff of one large Los Angeles
company believe strongly that meter rates are too high in Santa Monica and need to come
down, preferably to the same level as in Los Angeles. They advocate a "regional approach" that
reduces deadhead and allows cabs to be where they are needed when they are needed.
Staff and drivers of companies that operate in Santa Monica defend the higher fares that they
.charge for several reasons. Some companies operate luxury vehicles which they feel are
demanded by the market in Santa Monica and justify higher fares..Others note that companies
licensed only in Santa Monica must return empty when they drop off outside of Santa Monica
and feel that this requires charging a higher fare. They also feel that they provide better service
to residents than regional companies, including short trips, trips by people with disabilities, and
discounts, and these factors justify higher fares. (These statements are based entirely on the
opinions of the company staff and drivers; none of the assumptions on which they are based
have been verified J
Traffic and Parking
The City has identified circulation impacts bf taxicabs as an area of concern. Parking by
taxicabs has also been an issue, especially waiting in metered spaces for business.
No data about congestion impacts of taxicabs is available. However, the City has provided
records of traffic citations issued to taxi drivers from 2005 through 2007 and parking citations
issued from 2004 through 2007. Figure 2-6 show the most common trafficcitations and
Figure~2-7 shows the most common parking citations. The most common citation, "Parking of
Vehicles," is based on the section of the taxicab ordinance that prohibits taxis from waiting for
customers except in a taxi zone or leaving a vehicle unattended ih a taxi zone (Code Section
6.48.08).
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Figure 2-6 Most Common Traffic Violations
Traffic~ofatfort"(2005-2(fQ7) ~, Total:
Parkin of Vehicles 147
Seatbelt Violation 80
U-Turn in Business District 78
Disobe Instructions 60
Failure To Sto at Red 39
Minimum S eed: Impedin Traffic Flow 32
Unsafe Speed for Prevailin Conditions 29
Taxicab Si ns 22
Yield to Ped at Crosswalk 18
Figure 2-7 Most Common Parking Violations
Overall, these listings contain 975 parking citations over a four year period and 681 traffic
citations over a three year period. The number of licensed taxis has not been constant over this
period, and various companies have gone out of business or entered the market, so it is not
possible to determine with precision the number of citations a typical taxicab receives. However,
compared to the 412 taxis currently licensed, the total numbers do not seem extraordinary. Note
that parking violations may be a symptom of excess supply in the street-hail market; if
designated taxi stands are full, drivers must choose between parking illegally and burning fuel
while cruising for a fare. In a few cases, parking violations could indicate a need for designated
taxi zones.
City Fees
City Fees have been a source of complaint from taxi drivers and owners. The fees are adjusted
each year using a Cost of Living escalator. Once every five years a full fee study is done. The
fee study determines the City's actual cost to provide the service that each fee is for. By
ordinance, fees cannot exceed the actual cost of the service. The last time a fee study was
done, it resulted in tripling the driver permit fee to $135 (since increased by the Cost of Living
escalator). Taxi owners pay the $250' business license tax per cab in lieu of the usual business
license tax based on gross receipts ($1.25 per $1,000 of gross receipts for most businesses).
Changing the amount or the method of calculation would require voter approval per California
Proposition 218. The Peer Review provides a comparison on fees in Santa Monica and other
jurisdictions.
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The economic analysis in Chapter 4 suggests that annual gross revenue for a taxicab may
range from roughly $37,000 for an independent operator to roughly-$64,000 for a taxicab
affiliated with a local feet. These figures imply that the current business license tax is equivalent
to a rate of about $4 to $7 per $1,000 of gross receipts.
Complaints about Drivers and Owners
The taxicab complaint hotline was instituted by the City as a part of the 2004 taxicab ordinance
amendments. It is monitored by a staff member of the Consumer Protection Unit of the City
Attorney's Office, and serves as the primary tool for consumers to notify the City of complaints
against local taxicab companies and drivers. The hotline asks the caller to leave some basic
information about the caller and their complaint. If the caller leaves acall-back number, the staff
member returns the call to get further information about the complaint and verify facts (cab
company name, cab number, date and time of incident; amount of loss/receipt).
A common complaint concerns cab companies/drivers not honoring their promotional coupons,
for example coupons posted in the Yellow Pages or in direct mailings. When there is evidence
that the cab company has failed to honor a coupon, the Consumer Protection Unit has been
successful in using the State false advertising law to get restitution on behalf of the consumer.
In most cases, cab companies have beeh willing resolve the disputes informally, without the
parties having to go to court.
Other complaints include calls. from senior residents about cabs refusing short trips and calls
about drivers who claim they can't take people in wheelchair. The Unit has also received
complaints about customer service issues, such as drivers not understanding English, drivers
not watching the road or taking long routes, and lost belongings left in cabs.
The Executive Director of the Bayside Development Corporation (which promotes and oversees
the downtown area) reported concerns of businesses and others downtown. Specific issues
include taxi drivers speeding in business district alleys, blocking the alleys when they queue up
for space in the taxi stands, urinating in alleys, dropping cigarette butts on the sidewalks, and
inappropriate behavior (whistling at women for example). She believes that the behavior issues
are not as bad as they used to be. However, she does not hear any complaints about the
service. The President of the Convention and Visitors Bureau confirmed that complaints about
taxicab service from her members are few and far between.
One staff person who lives in Santa Monica and uses taxis frequently, praised one of the larger
Santa Monica companies. He always uses the same company. They are never late, always
polite, and always clean. In his opinion, good service exists but you need to be an informed.
consumer. The same person has also heard complaints from residents about drivers taking long
routes, not opening the door for the passenger, and extremely bumpy rides.
While most City staff have limited experience with taxi drivers and owners and customers, they
do interact with them as part of the permitting process. Many drivers and owners are
unprofessional in their dealings with Revenue Department staff. This includes language,
hygiene, and attitude. Evidence about driver behavior also comes members of the public who
have been involved in an accident with a taxicab and come to the Revenue Department for
insurance information because drivers refuse to provide it. Revenue will provide the insurance
company of record if asked.
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Although the City conducts background checks as part of the annual permit process, it may not
receive notification of arrests made during the year. This is an optional feature of the Live Scan
program that must be specifically requested in writing. On occasion the taxi detail officer will
speak to taxi companies about driver issues. The Los Angeles companies will generally remove
a driver based on a complaint from the Santa Monica police.
Taxi drivers and managers also expressed concern about drivers who violate rules, don't know
their wayaround, overcharge customers, and behave rudely. In their view, these drivers create
a bad image for taxis and for Santa Monica in general, and make it harder for service-oriented
drivers to make a living. They strongly support the City cracking down on problem drivers.
Vehicle Condition and Appearance
Staff expressed concern that the mechanical inspections required for a taxi permit (done by a
state certified mechanic) are not adequate; since it is probably possible to buy one. The taxi
detail officer has removed taxi decals in the field, for example for really bad brake noise, bald
tires, and lack of signage. However, in his opinion, the cabs are mostly kept running pretty well
and fixed promptly. Regarding signage, he noted that some of the Los Angeles company drivers
may put their Santa Monica permit in the glove box because the police in Los Angeles don't like
the Santa Monica permits.
Many taxis in Santa Monica look alike. The majority are painted all yellow, a color scheme that
in Los Angeles is limited to Yellow Cab Company. The cab companies make up their own
identification numbers and there is no system to avoid duplication. This situation causes
confusion for customers, and makes it harder to enforce rules and investigate complaints.
Taxi drivers and owners support clearer rules and enforcement related to vehicle appearance.
One company manager noted that Santa Monica has no rules limiting the age of taxi vehicles.
Administrative Issues and Insurance
The large number of cab companies, including many one and two-person companies, increases
the staff effort to process applications. According to City staff, It takes as much time to deal with
a one ortwo-person company as a larger one. Not all of the staff interviewed agree on the
threshold below which company size is an issue. One staffer has found that companies with
fewer than 10 or 15 cabs are inefficient and burdensome for the City to manage.
Drivers and owners complain to City staff that the licensing and permitting process is too slow
and unnecessary. In the workshop held for this project, they supported increasing the staffing
devoted to this function. The Revenue Manager agrees that the current process is cumbersome,
involving separate visits to the Revenue Department and the Police Department, and would like
to see it more centralized. The Police Department has volunteered to take the process over as
done in Long Beach where the current Chief used to work. In a similar way, other licensing and
permitting functions have been moved from Revenue to other departments that have some
relationship to the businesses in question.
According to City staff, issues related to insurance have been a source of some difficulty,
although less so in recent years. There has been a history of inadequate or fraudulent
insurance. For example, one company told its insurance company that its cabs were all based in
Victorville in order to obtain lower rates. In the past some companies were self insured and
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some used shaky "offshore captives." The regulations were changed to eliminate self-insurance
and establish rating standards for insurance companies.
In 2004 the City's Risk Manager proposed increasing the insurance amount. The proposal was
not implemented due to opposition from the companies, especially the smaller ones. While
additional coverage might offer some protection the City, the main purpose of increased
coverage would be consumer protection.
Often vehicle insurance lapses because of non-payment of premiums, especially in the case of
the smaller companies. In these cases the City receives notification from the insurance
.company and has to tell the taxi owner to reinstate coverage or cease operation. The owners
sometimes claim not to know that coverage has been cancelled. The underlying issue is this
case is most likely financial viability. Companies with limited financial resources are also more
likely to operate vehicles in poor condition.
Operation in Los Angeles
Two issues related fo operation in Los Angeles are: 1) illegal operation in Los Angeles by
companies based on Los Angeles, and 2) whether companies that operate principally in Los
Angeles offer unfair competition to companies that operate only in Santa Monica..
The City has been contacted by the Los Angeles Board of Taxicab Commissioners about illegal
operation in Los Angeles by drivers licensed in Santa Monica. According to a letter from the
commission's president, 400 drivers licensed in Santa Monica have beeri arrested since 2000
for illegal operation in Los Angeles. These arrests account for 20% of all arrests for illegal
operation in the same period.
City staff have been working with staff of the Los Angeles Department of Transportation in
looking for a way to deal with bandit cabs. Santa Monica's open entry system provides an
opportunity for a driver to obtain a license and outfit a vehicle as a taxicab with similar
appearance as a company that operates in Los Angeles. There is anecdotal evidence reported
by City staff, based on conversations with drivers and observation, that some people get
licenses in Santa Monica but work on the fringes (and a little farther than that), including Venice,
Hollywood, and Pacific Palisades. Drivers have indicated that they are not bothered in
Hollywood and Pacific Palisades. Santa Monica police have participated with LADOT in a sting
in Pacific Palisades. Ways of doing a sting include calling for a ride and standing on Santa
Monica Blvd well over the City Limits and attempting flag anon-Los Angeles cab.
If a driver has been arrested for illegal operation in Los Arigeles it will show up on the driving
history. However, illegal operation in anotherjurisdiction is not grounds for permit denial in
Santa Monica. Grounds include criminal offenses, offenses related to unsafe driving, and
violation of Santa Monica's own taxi code.
Drivers who are licensed only in Santa Monica offered a different perspective on this issue.
They see it as unfair that the Los Angeles companies and drivers can bring passengers into
Santa Monica and can also take them from Santa Monica to other places, while "Santa Monica
drivers' who take passengers into Los Angeles cannot serve a return trip. They say that they
receive requests for service from people who live in Los Angeles near Santa Monica which they
have to turn down. They also believe that the need to return empty requires them to charge
higher fares than the Los Angeles companies. They also believe that Santa Monica companies
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provide better service to residents, including willingness to serve short trips and people with
disabilities, and offering discounts.
Taxi Zones
The City has established taxi zones in at least nine locations where there is significant demand
for taxi service. The taxi detail officer and other patrol officers conduct spot checks at the taxi
zones. One downtown zone is a loading zone until 11:00 am, after which taxis can use it; a
second zone is a loading zone until 6:00 pm. The drivers try to get spots in the zones early.
Examination of citation records showed a sharp peak in traffic citations during the 5:00 pm hour.
Drivers also try to queue up for a spot in-the zones.
According to the Manager of the Transportation Management Division, taxi zones were
established in places where space was available and through lanes were not needed. She
observed that the function of taxi zones is to have taxis available for customers, not to provide
waiting space for as many taxis as want it. The fact that the taxi zones are usually full shows
that there are more spaces than needed to serve the actual demand. She suggested reducing
the number of spaces per zone and shortening the zones.
The Executive Director of the Bayside Development Corporation regards the downtown zones
as appropriately sized and located. However, she also noted that there are a lot more cabs than
needed, as shown by the fact that cabs queue up for the zones.
At the taxi driver workshop, some participants said there should be more taxi zones. In the case
of the downtown area; this view is at odds with the observations of City staff. However, the
drivers also noted that there is more demand for taxis in certain other situations than can be
served by the available zones. An example was on Main .Street at closing time for the bars.
There is a zone with space for only one cab on Main Street.
The consultants observed use of four taxi. zones in the downtown area for about 90 minutes in
the early afternoon on a Thursday and in the evening on a Wednesday. As shown in Figure 2-8,
each zone was observed three or four times: Figure 2-8 shows the legal capacity of each zone,
the number of different cabs that were seen at any time in each zone, and the minimum number
seen at any time in each zone, and the number of different cabs seen "waiting illegally" for the
zone, for example in a space adjacent to the zone. At no time was any of the zones empty. The
zone on Santa Monica Boulevard near the Third Street Promenade is the busiest of the zones
and showed a lot of turnover during both observation periods. This is also the location were
there is the most illegal waiting; it was consistently full, usually with one or two cabs illegally
waiting, generally in curb spaces adjacent to the zone. The zone on Broadway always had at
least four cabs in it with little turnover. Other zones had much less turnover. In several cases,
individual cabs waited for the entire observation period without getting any fares.
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Santa Monica Pier
According to two City staff people who work on the Pier, and also the Executive Director; of the
-Santa Monica Pier Restoration Corporation (PRC), taxis cruising on the Pier are a source of
congestion. Taxis drive to the loop at the parking kiosk and drive slowly. back, hoping for a fare.
According to the Executive Director, taxis drive as slowly as possible and linger wherever there
is an opportunity to pause such as at stop signs and red curbs. At times they account for as
much as 80% of the vehicles on the Pier. Since the roadway is narrow, they block traffic even
when they stop to pick up or discharge passengers. A related problem is that there is no
designated or even. established unofficial place for them to wait.
An analyst who works for the City's Housing and Economic Development Department and
manages leasing on the Pier reported seeing people looking for a taxi to get back up the steep
incline to the street from the Pier. For these people taxis are a benefit, but they back up traffic
tremendously. Pier staff identified a possible taxi stand location which the City's transportation
planners said would be feasible, but the business owners at that location objected. The
possibility was examined of making a place for taxis in the Pier's large parking deck but staff
were not able to work out how to do it.
The PRC Board has recommended that the City establish franchises for taxicabs. They also
wanted to look at whether picking up at the Pier could be established as a quasi leasing
opportunity that could be limited to a single company. They have also looked at establishing a
transit connection on the Pier and this might still happen. The PRC Director noted that over the
holidays they received several complaints from visitors who took cabs from the Pier to other
activities and felt they were charged too much. He noted that it is hard forjust one police officer
to control the large number of cabs in the City.
The consultants- observed taxis on the Pier on a Wednesday between 9:16 and 10:56 PM and
on a Thursday between 12:45 and 1:45 PM. During each of four five-minute periods on the
Wednesday evening, one or two taxis were observed cruising the Pier. During each of four five-
minute periods on the Thursday afternoon, between three and five taxis were observed cruising
the Pier. These brief observations indicate that a pedestrian would rarely have to wait long for a
taxi on the Pier, even at 10 PM on a Wednesday.
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Figure 2-8 Downtown Taxi Zone Observations
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Interference with Bus Operations
According to staff of Big Blue Bus, taxis frequently interfere with bus operations by stopping to
pick up and drop off in bus zones. This interference happens too quickly for the police to catch.
However, Big Blue Bus has cameras on its buses that record this interference. If these pictures
could be used as evidence, it would be possible to revoke taxi licenses for use of bus zone
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ter 3. e s for r vin
o itions
This chapter addresses a variety of concerns about taxicabs in Santa Monica. For each
issue, there is a discussion of options for addressing that topic. The topics include:
• Finding the Right Number of Taxicabs
o Company Requirements
e Driver Background And Qualifications Standards
e Methods to Select Companies and Control the Supply of Taxicabs
• Vehicle Emissions Requirements
• Vehicle Standards and Inspection
e Fare Regulations
• Insurance
o Service to Hotels
• Enforcement and Staffing Levels
o Senior and Disabled Discounts
The discussion draws extensively on the results of the peer review contained in
Appendix A.
Finding the Right Numlaer of Taxicalas
All of the evidence indicates that Santa Monica has an excess supply of cabs, especially at
taxi stands and cruising downtown:
The peer review shows that the number of cabs per capita is higher than in most of the
peers. An estimate of "full-time equivalent cabs", adjusting for part-time operation by taxis
that are permitted in multiple jurisdiction or spend a significant portion of their time serving
an airport, would probably show that Santa Monica has more cabs per capita than any of
the peers.
An economic analysis in Chapter 4 shows that, given reasonable assumptions aboufthe
demand for taxi trips, the current numbers of cabs and drivers result in extremely limited
income potential for many drivers: This in turn may help fuel high fares established in an
attempt to preserve income. It may also limit the ability of companies to invest sufficiently to
provide quality service.
The on-street data collection confirms that downtown taxi stands are consistently full and
some have limited turnover. In other words, cabs wait there for long periods before getting
any business.
In theory, market dynamics might be expected to limit taxi numbers. However, experience
has show that the supply of poorly financed individuals who are willing to endure low
earnings and long work hours is sufficient so that oversupply can persist. Hence there is a
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convincing rationale for some form of entry control. Several methods for regulating entry to
the market are presented in the next section.
Regardless of what method of entry control the City uses, it will be important to establish
some guidelines for estimating a desirable number of taxicabs in Santa Monica. Several
lines of evidence have been examined to provide guidance about this point. These include:
e Comparison to peers
e The current distribution of companies and independents
• An analysis of the economic of the taxicab industry in Santa Monica
Evidence from Peers
Figure 2-2 in Chapter 2 provided the number of taxis per 1,000 population in each of the
peers, plus Arlington, Virginia. If cabs per 1,000 population from the peers, including
Arlington, is applied to the population of Santa Monica, the limits shown in Figure 3-1 would
result.
Figure 3-1. Hypothetical Limits based on
Of the .peers, Beverly Hills and West Hollywood are more comparable to Santa Monica than
the others in terms of size, density, and mix of markets, including residents, business
travelers, and tourists. The situation in West. Hollywood is complicated by the fact that 75%
of the taxis operating there are also permitted in Los Angeles or Beverly Hills. By
comparison, only 37% of taxis in Santa Monica are permitted in another city. Beverly Hills
allows taxis to be joint permitted only in West Hollywood. Arlington is much bigger than
Santa Monica but approaches it in terms of density. The airport trade has a bigger influence
in Arlington than in Santa Monica-although the 37% of Santa Monica taxis that are
permitted in Los Angeles can pickup at LAX, they can do so at most one day per week.
Overall, the evidence of the peers is that at most 200 to 300 taxis might be an appropriate
number for Santa. Monica, depending on the future mix of taxis that are permitted in other
jurisdictions as well. The lower figure is based on Arlington, with an adjustment for taxis that
work the airport. The higher figure is based on Beverly Hills, or else West Hollywood with
an adjustment for part-time operation byjoint-permitted cabs.
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Evidence from the Current Industry Structure
Another approach to setting a numerical limit would consider the portion of total fleet
currently represented by the very small companies, which a number of observers perceived
as being most problematic in a number of respects. For example, the number of taxis
affiliated with companies with five or more taxis is 349. Increasing the cutoff point reduces
the number of taxis, as shown below:
,.> 14Tirttmnm Size (Cabsiper-
Com an + ` ; Totat Caps
5 or more 349
6 or more 329
7 or more 323
8 or more 309
9 or more 282
10 or more .272
20 or more 245
This does not necessarily meaning that requiring all companies to have a specific number
of cabs would result in these numbers, since small operators could band together to meet
the new requirement, as happened in Sacramento.
Evidence from Economic Analysis
Chapter 4 presents an economic analysis of the taxi business in Santa Monica, including a
test scenario for a reduced number of taxis in the future under new regulations. Key results
from the analysis include:
• Even assuming that demand for taxi trips is very high compared to other cities, taxi
drivers are currently making only about $24,000 per year working six days a week.
• Taxis are significantly underutilized and could easily carry more passengers in ah
average shift:
• Depending on the future ofjoint-permitted cabs in Santa Monica (i.e. taxis that also
operate in Los Angeles and/or other cities), a smaller fleet of between 210 and 310
cabs could easily accommodate existing demand.
• This smaller fleet would allow for driver income to increase by about 15°/a, even after
taking into account added costs due to likely changes in regulations.
The Tower fleet size of 210 cabs assumes that all taxis operate exclusively in Santa Monica.
Depending on measures adopted by the City, this could happen. For example, an RFP
process could heavily favor exclusive Santa Monica operation. Vehicle requirements, meter
rates, and signage requirements could make it impossible or very difficult for taxis to
operate in Santa Monica and other cities. The higher fleet size assumes that the number of
joint-permitted cabs falls only slightly from current numbers, and that they spend only about
a third of their time in Santa Monica. Having such ajoint-permitted fleet would provide
valuable flexibility to respond to peaks in demand.
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It needs to be stressed that this economic analysis is very speculative and involves many
assumptions that had to be made because of limited data. As explained further in Chapter
4, the estimated appropriate fleet size is far more likely to be high than it is to be low.
Controlling the Supply of 'Taxicabs
Many methods can be devised for controlling the supply of taxicabs, including determining
which companies can operate. These can be roughly grouped under three headings:
1. Minimum standards
2. Regulating entry by companies using an RFP process
3. Regulating the number of taxicabs, combined with a method to select companies .
and determine how many cabs each one can operate
Each of these is discussed in turn.
Minimum Standards
One approach to limiting the negative effects of oversupply is by means of minimum
standards that apply to companies as well as to individual drivers and vehicles. Among the
peers, Sacramento exemplifies this approach. Prior to reforms in 2006 the situation in
Sacramento was similar to that in Santa Monica with an open-entry regulatory system and
numerous independent owner-operators operating poor quality vehicles who were overly
dependent on downtown taxi stands and without access to dispatch service.
Sacramento adopted a number of requirements including a minimum size for companies or
associations, dispatch service, distinctive color schemes and unique numbering, a staffed
place of business, and stricter vehicle inspections by a single designated inspection station.
Sacramento grants "taxicab fleet association permits" that that must be renewed annually.
A similar result may be obtained by granting multi-year franchises with no limit on the
number of franchises. By raising the bar for entry into the taxicab business, these
requirements should, in principle reduce oversupply. Companies would not be willing to
invest in excessive amounts of equipment that is not justified by demand. Also companies
would not want to be responsible for the behavior of an excessive numbers of drivers who
are all competing for a limited market:
In Sacramento, under the new regulations, service quality appears to have improved and
City staff report that association managers are working to address problems. However, the
number of taxis has actually increased. Prior to a moratorium established in 2003 there had
been 353 in operation. This fell through attrition during the moratorium to about 320. As of
February 2008 there were 371 cabs in operation. There may be a continuing issue with
taxis parking in metered spaces downtown that the City needs to address.
Sacramento's entry standards did not include a number of items that have been proposed
or discussed for Santa Monica. These were described in the previous section. Some of the
requirements that would likely affect the number of companies and the number of cabs in
operation include:
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• Requirements for SULEV vehicles
• Increased liability insurance limits
• Requiring dispatch by means of radio or computer, rather than by cell phone
e Driver training or testing requirements
These requirements if implemented would increase the financial resources needed to
establish and maintain a taxi business and would probably limit entry further than occurred
in Sacramento. The next two sections provide a detailed treatment of possible standards
that have been applied to companies in other cities and could be applied in Santa Monica.
One risk of minimum standards alone, is that companies would be reluctant to invest capital
without some assurance of market share. This could limit entry to those companies that
.already have a dispatch system. Alternatively, companies that applied successfully for a
permit, after seeing how many others were still in the market, might change their minds and
drop out. One possible result would be domination of the market by regional companies that
could meet the standards more easily than smaller, Santa Monica-only companies. If the
requirements were such that regional companies were excluded (for example due to
incompatible standards for vehicles, signage, or meter rates), a fleet without ability to
respond to peaks in demand could result.
If a relatively lenient set of minimum standards were adopted, a risk could be continued
operation by as many as 15 to 20 companies with attendant administrative burden on City
staff. If the result was a large number of companies, it could be difficult to establish
measures to avoid having cabs that are overly dependent on street business. It would be
hard to enforce that a dispatch system, in addition to existing, is actually used. Further, it is
doubtful that as many as 15 companies could effectively compete for dispatch business. It
would be up to the City to actively enforce rules holding companies responsible for any
continued undesirable driver behavior.
Regulating Entry by Companies Using an RFP Process
A request for proposals (RFP) can be used to award a limited number of franchises or
company permits. Some set of minimum standards such as described above would be
used, but companies would be asked to propose enhancements that would be used to
decide which companies received one of the limited number of franchises. Limiting the
number of companies would provide proposers with some assurance that they would have
access to a sufficiently large market to justify investments. Proposers would be required to
spell out their plans for achieving or exceeding company requirements such as those
described in the preceding section. They would then be scored on these plans and required
to carry them out by the franchise ordinance.
In principle, once selected, the companies could be allowed to operate as many taxicabs as
they thought prudent. This might be a course of action for example if the objective was to
reward companies that offered superior proposals and where there was little incentive to
oversupply the market with taxicabs. However, when the regulation on the number of
companies is new, new entrants (perhaps including newly formed associations or new
startups) may-still be fearful of entry and its high investment if there are no limits on the
number of taxicabs that can be operated in the marketplace.
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Two variations on this concept include: 1) use existing companies-and their permit levels as
a baseline; and 2) treat companies that operate exclusively in Santa Monica separately
from companies that also operate in Los Angeles and/or otherjurisdictions.
The first concept is illustrated by West Hollywood. Existing franchises that received a
passing threshold received their current permit levels. Remaining permits were then
allocated to new entrants based on the number of additional companies needed and the
RFP point system. Since Santa Monica does not currently have franchises or company
permits, some criterion would need to be set for which companies qualified for this pass/fail
treatment. For example, companies might pre-qualify by demonstrating that they already
meef certain criteria, such as having a radio or computer dispatch system and operating the
established minimum number of permitted cabs. For example, there are currently seven
companies with at least 20 permitted cabs. Mostly likely some of these operate a radio or
computer dispatch system.
The second concept would provide away to balance the advantages of having companies
that concentrate on Santa Monica and companies that serve the entire region. Since the
regional companies operate cabs that are not dedicated to Santa Monica, they provide
flexibility to serve peak periods, including during special events. At other times; when there
is less business in Santa Monica, they would choose to operate elsewhere. (Another way of
handling non-dedicated vehicles might be to grant temporary permits to non-dedicated
vehicles in exchange for these companies providing detailed utilization and trip data for
detailed analysis.) The rules that are adopted concerning vehicle types, fares, and vehicle
signage, joint operation in Santa Monica and other cities may determine whether it is
feasible for cabs to be joint permitted.
Regulating the Number of Taxicabs and a
Company Selection Process
Depending on the companies and market forces, approaches such as minimum standards
and/or limits on the number of companies may not have a significant impact on the
oversupply of taxicabs. An additional alternative then is to regulate the number of taxicabs.
The appropriate number of taxicabs in Santa Monica was discussed at the beginning of this
chapter.
This would help assure companies that they will have access to a reasonable market share
per cab to justify investments. Limiting the supply of taxicabs is very common in U.S.
markets. Assuming that Santa Monica establishes a minimum size requirement for
company fleets, limiting taxi numbers automatically implies some upper limit on the number
of companies as well. Two process for determining which companies can operate and how
many cabs they can operate are: 1) a political or administrative process based on "public
convenience and necessity" (PC&N); and 2) a request for proposals (RFP).
Public Convenience And Necessity. The PC&N process is the most common method for
allocating companies and permits. This system works through some sort of political or
administrative hearing process. These systems typically decide the number of companies
and the number of taxicab permits by requiring that companies desiring to operate taxicabs
demonstrate the "public convenience and necessity" or "need and necessity" for the number
of taxicabs they wish to operate in the area. Need and necessity however is not always
easy to quantify, and arguments over who should get the permits tend to result in highly
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politicized or administratively intense processes. For these reasons other methods have
arisen for allocating taxicabs permits and company operating authorities. The peer review
reflects that both West Hollywood and Los Angeles came from this type of method when
they switched to an RFP.
A variation on the PC&N process that reduces the frequency at least of the politics involved
is to require applications to be submitted on a periodic basis. Although this reduces the
frequency of hearings and allows for a competitive hearing, the periodic application process
still requires a method fordetermining the number of permits and for selecting the
companies. One might use a lottery for picking applications, but with the exception of
medallion markets where limited permits are traded, such methods of selection are not
common.
Request for Proposals. A process for selecting companies that has more recently evolved
has been the RFP system, a system that has additional advantages because the
government is already familiar with similar methods for competitively awarded contracts.
The RFP criteria and processes for Los Angeles and West Hollywood are described in the
peer review (Appendix A). Both of these cities switched to an RFP process when their
taxicab industry was quite different than that in Santa Monica today. Both were already
franchise style systems with limits on the number of taxicabs and companies, with the
franchises and permits awarded as previously described by a political process: In both, a
major goal of the system was to have a process for awarding companies ahd permits.
Additionally, in both there was a goal to increase company standards beyond those
contained in the regulations, expanding on minimum standards by holding companies to
proposals on higher company standards, made in order to keep their franchises or to obtain
more permits.
Just as in an RFP process with limits on companies but not taxicabs, proposers are
required to spell out their plans for achieving or exceeding company requirements and are
then scored on these plans and required to carry them out by the franchise ordinance. In
addition, the scores can be used as part of a formula to determine how many permits each
company would receive out of the limited number set by the City. The peer review matrix
shows the criteria used for permit allocation by Los Angeles and West Hollywood.
With taxi permit limits, and with limits on the number of taxi companies, the City may wish to
distinguish between permits for cabs that operate only in Santa Monica and permits for
cabs that also operate in otherjurisdictions. The appropriate number of taxis will be larger if
a portion of them are joint permitted, as was discussed earlier in the economic analysis of
taxi operations.
A significant risk in an RFP process with limits on taxi numbers is the lack of good data on
which to base the initial limit. Dispatch information is lacking to estimate current demand,
and true figures on the number of taxicabs being. utilized in the market have to be
estimated. The economic analysis section reviews the impacts of these uncertainties.
A process would also need to be established to adjust taxi permit limits over time and to
allocate additional permits. In the peer cities the initial numbers of cabs were developed by
staff analysis and council approvals: However, if the numbers need to be adjusted in the
middle of the franchise period, then in the peer cities the process reverts back to need and
necessity and council hearings. As an alternative to this Santa Monica could specify in its
RFP what process would be used to allocate additional permits (for example proportionally
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to existing permits), or could reserve the right to issue a supplementary RFP at any time to
allocate additional permits. As a practical matter, the City would want to consult with the
companies to assess their interest in adding cabs to their fleets. From our interviews with
companies, it is likely that at least some of them would welcome a process that includes
flexibility to add permits as market conditions permit.
Formulas. Formulas are used in some jurisdictions for determining the number of permits
for the market. The most rudimentary of these is the population ratio method. However, as
is clear from examination of the peers, population is only one of multiple factors that affect
demand. Taxicab demand can go down when population increases, and vice-versa.
Estimates of population growth for individual cities between census counts are difficult to
make. Some jurisdictions have therefore implemented more sophisticated formulas that
take into account other factors such as airport trips and hotel nights.
Ideally adjustments to the number of taxi permits would be based on real market data.
Much of the needed market information should be maintained by the taxicab companies,
assuming that the companies are required to maintain and provide this data to the City,
including dispatch records and driver logs. Factors may include response time to
dispatches; trends in the number of dispatch requests, and availability of taxicabs in taxi
zones and at hotels. This analysis should take account of difference in periods of peak
demand and other times.
One theory for example is that if dispatch records justify additional cabs, there is no logical
reason not to allow them, since it is typically cabs sitting at stands or drivers short of income
that are the major concerns. However, an adequate number of dispatches to justify
additional cabs may still result in shortages during peak periods and an excess supply off-
peak. In cities such as West Hollywood and perhaps Santa Monica also, this phenomenon.
argues for supplemental non-dedicated cabs that will only work the areas when needed.
Specific Company Requirements
All of the entry control methods described in the preceding section presume regulations and
standards that apply to taxicab companies. These regulations are intended to improve
service, protect consumers, and reduce negative impacts of underutilized taxis.
As pointed out in the previous section, many of these requirements may also have the
impact of reducing the supply of taxicabs and/or taxicab companies. The rest of this section
describes specific company requirements that could be used in Santa Monica.
Minimum Fleet Size /Service to Entire City
Many cities require that a company maintain a minimum number of vehicles. All of the
peers have minimum fleet size requirements. A related common requirement. is that
companies respond to dispatches in the entire city. The latter requirement is a customer
service standard to ensure all locations in the city are being served. A minimum fleet
standard ensures that there are enough cabs to provide at least a minimal level of service
throughout the city.
A second purpose for requiring minimum fleet sizes is to ensure companies doing business
in the city have an adequate fleet to justify the overhead required to provide essential
taxicab functions in the City, for example dispatch service and (potentially) wheelchair
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accessible cabs Fleets of a minimum size may also reduce the City's effort to administer
and enforce taxicab regulations, as City staff will be dealing with a smaller number of
companies.
Finally, it is often hoped that companies who adhere to some minimum size will have a
vested interest in not oversupplying the market with cabs. The previous section reviewed
the arguments on this issue.
.One choice with minimum fleet sizes is whether vehicles should be required to be present
and available or merely in service. Most jurisdictions do not deal with this matter, so insured
and permitted vehicles "on the lot" would count toward the minimum. For example, if the
counts are only made at inspection time, this is merely a periodic check of the number of
vehicles available. More effective regulation would require reporting of vehicles that go out
of service, spot checks in addition to scheduled inspections, or documentation that vehicles
are actually carrying passengers. Some allowance can also be made for replacing vehicles
that are in accidents or otherwise. go out of available service for reasons other than age
limitations. Dispatch logs and driver logs can help determine the number of vehicles
actually in use.
Distinctive Name,
Taxicab Color Schemes and Unique Numbering
Distinctive company names and taxicab color schemes help customers distinguish between
taxicab companies in the marketplace. There are a number of resulting benefits including
facilitating comparison shopping and therefore competition, assisting customers in locating
their taxicab, assisting with enforcement against unauthorized companies, and assisting in
reporting and investigating complaints. The vast majority of jurisdictions have such a
requirement. (The major exception here is the few markets where taxicabs cannot respond
to radio dispatches but only flags or walk-ups, such as New York City.) Probably the only
downside to the City is the requirement to award color schemes. In the case of Santa
Monica, the presence of existing companies with similar color schemes means that a
method for dealing with competing requests for similar names and color schemes may be
needed, such by RFP scoring, a lottery, or negotiation. Any method should take into
account the existing company color schemes or names and companies' investment in these
schemes, especially where they were unique when they were established in the city.
Other typical regulatory requirements for taxicab markings are implemented for similar
reasons, especially requirements for assigning and displaying a unique unit number. No two
cabs within a company should ever have the same unit number. Many jurisdictions go
further and require all unit numbers in the City to be unique. This latter requirement would
need to make allowance cabs from multiple jurisdictions, for example by giving all Santa
Monica-orily cabs a distinguishing prefix
Another common requirement is that the telephone number for the company be posted on
the outside of the taxicab. Many jurisdictions also require taxicab markings to be of a
minimum size and specify eitherwhere or on what sides or other locations the postings
must be. Sometimes the names of companies are also required on the vehicle top lights.
Finally, much of the information on exterior signage is also commonly required to be posted
on the inside of the cab. To avoid multiple jurisdiction issues with these requirements,
smaller jurisdictions frequently take this wording from the largest common jurisdiction,
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which in this case would be Los Angeles. Santa Monica already requires company names
and phone numbers on the side and rear of cabs, but the value of this information is limited
in the case of independent drivers.
Published Telephone Number Requirements,
Telecommunications and Marketing
Many cities require published telephone numbers to ensure that customers can contact the
taxicab company by their name by using the local telephone directory. The requirement
would need to allow for the gap in time between a company entering business and the
publication of the next edition of the telephone directory. Allowance would need to be made
for exceptional circumstances, for example if the telephone directory or telephone company
makes a mistake in the directory. Legitimate companies would have no problem with such a
requirement, and in fact would publish their telephone number at every opportunity.
Beyond basic requirements for taking telephone calls ,regulatory standards for
telecommunications systems are not commonly part of minimum requirements. This is likely
due to complications with specifying minimum telecommunications standards that would
apply to all companies. However, when an RFP process is used, it is common to ask
prospective companies to submit detailed telecommunications and/or marketing and
advertising plans. Telecommunication plans would allow companies with more advanced
equipment, backup capabilities, procedures, call center reporting, and similar features to
receive higher scores. Similarly companies that go beyond mere telephone directory listings
and either have or propose a marketing and advertising campaign for dispatching calls
would receive higher scores.
Financial Stability
Financial submission requirements are common in company application requirements, but
definitive definitions of the minimum financial requirements the compahies must meet are
not. For example, as shown in the peer review,. Los Angeles and West Hollywood specify
the documentation that must be provided, including financial statements and evidence of
debt funding, but the only standard given is that these documents provide "adequate
demonstration of financial capability to perform in accordance with the franchise ordinance
and the applicant's own proposal." A possible review process would be for the City's
financial representative to review each application's financial information for sufficiency. For
example, the City could look to see if the available cash reserves or a line of credit is
sufficient to maintain a regular vehicle replacement schedule and to establish or upgrade a
dispatch system. Some jurisdictions require performance bonds or deposits also, including
for example the City of Los Angeles.
RFPs require similar information and can use the same sufficiency tests as application
methods. RFPs can and usually do, however, score the financial information submitted and
use this as one of the many items compared among company proposals. Both peers using
the RFP method do this also.
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Staffed Place of Business, Facility Location and
Complaint Procedures
Companies are commonly required to have a staffed place of business and to have
procedures for documenting and responding to complaints. There might be a requirement
that the business office be staffed during the hours of 8:00 AM to 5:00 PM Monday through
Friday by at least one staff person for the purpose of general management of the business,
handling complaints, queries from regulators and so forth.
Some regulations also require a business office in the city or within a certain distance of the
city. The logic to requiring a nearby business office is for customers and drivers'
convenience when they need to interact physically, for example to collect lost property or
change shifts, and to facilitate spot checks by enforcement staff. Some cities may also
desire locations within their city to increase economic vitality or to favor local businesses.
RFPs go beyond the minimum standard by requiring that companies submit their staffing
plans, organizational charts, resume information and so forth, for comparative evaluation
among the companies. Similarly the companies' complaint procedures are submitted and
evaluated. Facility plans are also requested and evaluated, and location can be taken into
account along with other qualitative features. The RFP can also leave it to the proposer to
explain how they will deal with lost and found and other aspects of driver and customer
needs to interact with the business office.
Dispatching Service Requirements
Most regulatory requirements require dispatchers to be on-duty during all hours that
taxicabs are in service. Many jurisdictions go further than this, defining service hours as 365
days-per-year and 24 hours-per-day, thus. requiring dispatchers to be on duty at all times.
Having dispatchers on duty while taxicabs are in service is considered a minimum customer
service standard for dispatching taxicabs, but it is also a security provision for drivers and
passengers, assuring there is someone available in the event of an emergency in the
taxicab.
Most jurisdictions require that company communications with drivers be over atwo-way
radio system rather than cellular telephones. The logic to this provision is that effective
dispatching and other necessary communicating with drivers cannot occur over cellular
telephones once the fleet reaches a certain size. Two-way radio systems allow
communication with the entire fleet at once and more rapid communication with individual
taxicabs. The peer cities all have this requirement. An effective dispatching system is
important to ensure that drivers are not overly dependent on street hails and walk-ups for
business.
Computer Dispatching
There is a significant movement toward computerized dispatching in larger taxicab fleets.
There are two general levels of.this dispatching. Level 1 is that reservations are taken into a
computer dispatching system which assists dispatchers with assigning taxicabs. The
dispatchers then read and record the dispatches to drivers. Level 2 adds digital driver
communications: rather than dispatchers reading the trips, trip assignments are digitally
communicated to the taxicabs via some form of in-cab digital system, frequently an in-cab
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mobile data terminal (MDT) or computer (MDC). All of the peer cities require digital
communication with the taxicab in addition to two-way radio communication.
Computer dispatching brings a number of potential enhancements to quality of service and
recordkeeping and reporting. These systems can be significant investments especially for
the Level 2 systems. Level 2 systems can be further integrated with vehicle location
technology in dispatch, such as GPS (Global Positioning System), further improving
dispatch and driver /patron security in the event of an emergency. (Tracking vehicle
locations from the base station can also be done with a system separate from and not
integrated with a computer dispatch system.)
Because of the complexities of computer dispatching systems, requiring them via minimum
standards is rare and limited to basic requirements such as in Beverly Hills, where the code
merely states that digital communication is required in addition to radio. Where RFPs are
used as with two of the peers, in addition to meeting the basic requirement the proposers
are required to provide detailed plans describing the chosen technologies and their plans
for utilizing the proposed systems in daily operations. Companies are then scored on these
plans and held to them in the franchise ordinance, as is the case in Los Angeles and West
Hollywood. It would probably not be economically realistic to require computer dispatch in
Santa Monica, except in the case of companies offering regional service.
Response Time Standards
Ordinances frequently require that if the company cannot respond to a call in some
reasonable time period (such as fifteen minutes), that they advise the customer accordingly.
However, it is relatively rare to have a standard for overall or average response times.
Nevertheless it is done, including in Los Angeles. Such overall response times are an
excellent gauge of customer service and the supply and demand for taxicabs. Calculating
response times requires either periodic random sampling or review of computer dispatch
records. Los Angeles for example uses the latter method, and requires in each company's
franchise ordinance that they provide the computer dispatching information. If response
time data is available it can also be used as part of a process to determine whether
additional taxicabs are needed.
Vehicle Age Limits
Some of the most common regulatory requirements are those pertaining to vehicle age.
The logic behind such requirements is that taxicab vehicle condition reaches unacceptable
levels after a certain number of years or miles. The obvious advantage to choosing years
over miles is the ease of administering the rules. Maximums in the peer cities range from no
more than 6 to no more than 9 years, including extensions based on annual or semiannual
inspections.
Sacramento relies on a third-party inspection process by a single agency (Paratransit, Inc.,
the organization that operates paratransit service in the region) rather than an age
limitation, using criteria developed by San Diego. In Santa Monica unlike most taxicab
markets there are a substantial number of import or luxury vehicles. Many jurisdictions also
allow longer usage for specialty vehicles such as wheelchair accessible and alternatively
fueled vehicles. There are examples at least in the limousine industry for granting longer life
spans for antique vehicles. Some jurisdictions use a mixed system whereby vehicles of a
certain age require stricter inspections while newer vehicles do not.
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Minimum Vehicle Size Requirements
Many jurisdictionsregulate the size of vehicles which may be used as taxicabs. Such
requirements are intended to ensure that taxicabs can comfortably carry four passengers
(or three in the back), and have adequate space for luggage. Los Angeles has detailed
requirements for sedans, station wagons, vans and accessible vans. All sedans and station
wagons for example must be classified as a "large car" or "large station wagon" by the U.S.
Department of Energy's Gas Mileage or Fuel Economy Guide. As explained in the
discussion of SULEV (low-emission) vehicles, it appears that no or few SULEV vehicles
would meet the current size requirements in Los Angeles. New York City has had to modify
its size requirements to accommodate goals for fuel-efficient vehicles.
Wheelchair Accessible Cabs
Many jurisdictions have begun requiring that a certain. number or percentage of the
company's vehicle fleet must be wheelchair accessible. The peers all have requirements in
this regard. It is important that if wheelchair accessible vehicles are required that there are
also requirements for the vehicles to be in operation. Many jurisdictions that have merely
required companies to have accessible vehicles have then encountered problems with
service levels. Ordinances with actual service level requirements are still rare. RFPs
typically require companies to describe theirplans for servicing calls for wheelchair
accessible taxis and additionally their plans for assisting other special needs passengers,
and require the companies to abide by their approved plans in the franchise ordinance.
Nationally, 1.2% of people age 15 and older use a wheelchair.' However, the percentage
could be much higher in Santa Monica. In addition, people who use a wheelchair are less
likely to drive than others and may be more frequent users of taxicabs if accessible service
is available. Among the peers the highest requirement is in West Hollywood, where 10% of
vehicles must be wheelchair accessible; cone-year phase in was allowed. A minimum
requirement in Santa Monica might be that each company have at least one wheelchair
accessible vehicle in service at all times.
Emissions Requirements
Emissions standards are somewhat rare in the taxicab industry, but the local peers all have
some form of overall fleet-wide emissions requirements in their minimum standards.
However in each case the requirement was for relatively small percentages of vehicles in
the fleet. We have found no otherjurisdictions that use a requirement based on the SULEV
certification. A detailed treatment of SULEV requirements is provided in another section. Ar
RFP can provide flexibility for companies to structure fleet emission proposals around their
other vehicle requirements. An RFP point system could allow consideration of multiple
factors and tradeoffs to address multi-jurisdictional requirements, diverse vehicle sizes and
types (such as vans, station wagons, and accessible vehicles), age limitations, alternative
fuels, range needs, etc.
Record Keeping
Record keeping requirements are quite common in regulations for the taxicab industry, but
these requirements are also quite diverse. Many jurisdictions for example require drivers to
U.S. Census, 2002 Survey of Income and Program Participation
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keep trip logs and many require companies to keep those logs. Of the peers, Los Angeles
and Sacramento require driver logs. However, the computer dispatching requirements of
the other peers accomplish much of this along with other record keeping. Nevertheless,
computer dispatching systems do not routinely collect flag and walk-up trip data, so driver
log requirements in addition can be very beneficial to taxicab analysis and for other
purposes. Otherjustificationsfor driverlogs and dispatch records are based on customer
service, enforcement, driver security activities such as investigating complaints and
incidents, and determining whether the supply of taxicabs is adequate.
Beyond trip information there is a good deal of information that can be required of taxicab
companies. Los Angeles, West Hollywood, and Sacramento provide a detailed list of
records which must be kept and that are subject to review by City officials. In addition to
record keeping, jurisdictions can require that certain information be reported to the City,
such as is the case with performance reporting described elsewhere in this section.
Accepting Credit Cards
The requirement to accept credit cards can be considered a driver requirement rather than
a company requirement, but jurisdictions may also require this of the companies, or that the
companies facilitate the credit card transactions with the drivers. This is obviously a
customer service issue. Credit card company charges are based on a percentage of the
transaction, and companies often add to this fee when charging the credit cards back to
drivers. This charge is frequently an area of contention by drivers. None of the peers have
this requirement.
Fees to and Agreements with Drivers
Regulation of fees charged to drivers is extremely rare as a minimum standard. San
Francisco is one city that sets a maximum "gate fee" for drivers; a recent increase in the
maximum allowed gate fee was a source of considerable controversy. In RFPs however,
evaluation of company fees and charges to drivers is common, and in the case of the RFP
peers, the underlying contract agreements and "social benefit programs" are also
evaluated. Franchise agreements can then be used to ensure these arrangements are not
modified without a justification process, or fee adjustments can be tied to meter rate
increases as triggering events. Some companies have multi-tiered fee structures, for
example charging one fee for drivers linked to the dispatch system and. a lower fee for
drivers who are not. To avoid having drivers dependent on street hails and walk ups, Santa
Monica could limit such arrangements.
Enforcing Driver Service Standards
Most jurisdictions have some level of driver service standards. Examples include
professional conduct, assisting passengers, taking the direct route, offering receipts, etc.
These standards can go into great detail. Some jurisdictions require that a "Customer Bill of
Rights" be posted in each taxicab; the rights listed are mostly driver requirements: In
addition to enforcing service standards, companies can also be required or encouraged to
screen and train drivers as indicated in the next section.
Companies can be held accountable for tracking and enforcing driver violations of service
standards just as enforcement officers do in the field. In Sacramento, for example,
companies are liable for all violations by their drivers; the aim was to reduce the need for
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City enforcement, and provide incentives for companies to effectively screen their drivers.
Enforcement officers may be better equipped to handle certain types of infractions, but
companies are better equipped to handle others. Companies can be required by ordinance
to enforce or facilitate driver service standards. In RFPs companies can be asked to
provide detailed service level plans to receive points and. then can be held to those plans in
the franchise ordinance. The section about enforcement addresses holding companies
responsible for violations by their drivers.
i)river Background and
Qualifications Standards
Minimum standards for drivers are essential for purposes of public safety and also to
promote service quality. Typical standards include:
• Background checks
• Training
e Testing
• Licensing / relicensing and maintaining service standards
We have not examined the issue df background checks in detail. However, some areas for
improvements have been identified, including:
• Clearer standards for permit denial or revocation.
e Adding to the list of grounds for denial or revocation, including violations of taxi rules
in other jurisdictions.
o Ensuring that the City is notified by the DMV about licensing actions and by the DOJ
about arrests.
Strategies for training and testing used by otherjurisdictions include:
1. Hands off
2. Regulations, but still rely on companies or associations to provide
3. Company proposes, such as in franchise or permit award via RFPs
4. Require approved training programs
5. Regulatory authority provides training
6. Regulatory authority nutsources training
There are examples of each throughout the United States. Generally speaking, the more
fragmented the taxicab industry, the more active a role that jurisdictions tend to take.
However, even in some less fragmented markets the City provides or facilitates much of the
training. Note that even where training is up to the companies, testing can be at the City
level.
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At a minimum the City can require the companies to provide training and testing with
varying levels of detail. The simplest requirement is merely requiring that companies
provide or require their drivers to attend training and testing "to proficiency" in common
training areas as listed below. If the City uses an RFP, these standards can be added to
point awards for training proposals. If the City wishes to provide a common training
environment and consistent training, they may consider outsourcing as is the casein
Charlotte, NC. There drivers or their companies pay a fee of $100 per student for two days
of for-hire operator training.
Common training elements include:
• English proficiency and money skills pre-testing
o Pre-training requirement
o Failures should be referred to English as a Second Language courses in the
community
d Money skills can be aself-practice handout for later retesting or a referral to
community sources
• Vehicle for hire regulations
a Map reading and routing /navigational tools
e Knowing and appreciating the area
• Customer service skills
e Assisting customers with disabilities
o Safe and defensive driving including vehicle inspection
• Business management
• Driver security and crime /public safety
• Review, course evaluation and testing
Depending on how the above training and testing decisions are decided, the City can then
elect#o have portions of the testing performed at the City. This is common in many
jurisdictions and especially with English proficiency, map reading and knowledge of the
City. Many of these tests are self-designed in various jurisdictions, but English proficiency is
likely better to be purchased in order to obtain standardization.
Passing all tests is a precursor to licensing. Additionally, companies should sponsor any
application for a license or renewal so as to ensure the company has performed its
functions in the process and on renewals has checked driver perform2nce since the last
licensing. Most jurisdictions therefore also require each driver to be registered to a specific
company with their license. On renewals, cities should also check the drivers record
including local citations and of course re-run all background checks.
Vehicle Emissions Requirements
Background.
On October 16, 2006, the Santa Monica Task Force on the Environment unanimously
adopted the following motion:
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"The Santa Monica Task Force on the Environment recommends that the
Santa Monica City Council direct staff to develop an ordinance which will set
air quality performance standards for awarding taxi franchise agreements
within the City of Santa Monica. The Santa Monica Task Force on the
Environment recommends that the air quality performance standards require
taxi franchises be awarded to taxi fleet operators which utilize only vehicles
certified to SULEV emission standards. It is recommended that staff develop
a scoring and award criteria that provides additional consideration-and
priority to taxi fleet operators that exceed the SULEV standard, that reduce
petroleum usage, and/or can demonstrate reductions of greenhouse gas
emissions to the maximum extent possible."
This section provides some analysis of the issues connected to this proposal and then
presents options for implementation.
SULEV is one of six emissions ratings issued by the California Air Resources Board (ARB).
All new vehicles sold in California must be certified under one of these rating, which
indicate how much a new vehicle pollutes. The six ratings are:
• ZEV: Zero Emission Vehicles have zero tailpipe emissions and are 98% cleaner
than the average new model year vehicle.
• AT PZEV: Advanced Technology PZEVs meet SULEV tailpipe emission standards,
have a 15 year / 150,000 mile warranty, have zero evaporative emissions and
include advanced technology components. For example, a plug-in hybrid or a
compressed natural gas vehicle would qualify in this category.
s PZEV: Partial Zero Emission Vehicles meet SULEV tailpipe emission standards,
have a 15 year./ 150,000 mile warranty and have zero evaporative emissions.
• SULEV: Super Ultra Low Emission Vehicles are 90% cleaner than the average new
model year vehicle.
o ULEV: Ultra Low Emission Vehicles are 50% cleaner than the average new model
year vehicle.
• LEV: Low Emission Vehicles are the least stringent emission standard for all new
cars sold in California in 2004 and beyond.
From these definitions, vehicles certified as SULEV, PZEV, AT-PZEV, and ZEV would all
meet the Task Force recommendation. ZEV cars are presently limited to electric vehicles.
The currently available models are small neighborhood type cars that may have some niche
market as taxicabs although they are not suitable for general taxi service. The South Coast
Air Quality Management District lists 58 2008-model vehicles certified as SULEV, PZEV, or
AT-PZEV on its Clean Air Choices web site.? Some of the vehicles that may be appropriate
for use as taxicabs are shown in Figure 3-2. Many of these vehicles also have very good
fuel economy, and therefore a small carbon footprint. However; some of them have only
slight better fuel economy that a typical Crown Victoria taxicab. (For comparison, the 2008
model Crown Victoria has an EPA estimated mileage of 15 mpg city and 23 mpg highway,
with a carbon footprint of 10.2 tons/year of COZ.)
z http://www.agmd.gov/CleanAirChoices/2008models.html. Similar information is available at the California Air
Resources Board consumer web site, www.driveclean.ca.gov.
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Figure 3-2 Super Ultra Low Emission Vehicles
It would not be necessary to buy a new vehicle to comply with a SULEV requirement. The
SULEV certification has been in use since at least 2004. Through the smog check program,
vehicles sold as SULEV must continue to meet the same standards.
The most common vehicle type used as a taxicab throughout the United States is the Ford
Crown Victoria. Taxi drivers and managers describe these as very reliable vehicles that can
be purchased used and kept in good running condition for many years. The police version
of the Crown Victoria; called a Police Interceptor, is considered particularly reliable. The
Crown Victoria is certified as ULEV. A number of taxi companies in the Los Angeles area
are operating Ford Crown Victorias which have been converted to use CNG as a fuel. CNG
Crown Victorias converted by BAF Technologies were certified as SULEV for some years
but not others.
The size of the Crown Victoria is considered good for taxi use because of its passenger and
luggage carrying capacity. In particular it meets the size requirements established by the
City of Los Angeles Board of Taxicab Commissioners, which specify that sedans used as
taxicabs must be classified as a large car (120 or more cubic feet of passenger and
luggage volume) in the United States Department of Energy's Gas Mileage or Fuel
Economy Guide.
Despite concerns about their suitability for taxi service, a number of the SULEV, PZEV, and
AT-PZEV vehicles shown are being used as taxicabs in many cities. Ford Escapes, Toyota
Camrys, and Toyota Highlanders are becoming increasingly popular, especially in cities
that have implemented rules encouraging or requiring vehicles that get good fuel economy
or reduce greenhouse gas emissions, including Boston, New York, and San Francisco.
Some companies, including one in Santa Monica, are also operating Toyota Prius taxicabs
despite their small size.
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'EPA Estimate based on 15,000 miles of ddving.
Source: http:/M~ww.agmd.gov/CleanAirChoices/2008models.html
Santa Monica Taxi Study Technical Memorandum
- CITY OP SANTA MONICA
SULEV is an emission standard that applies to tailpipe emissions of "criteria pollutants"
such as hydrocarbons and nitrous oxides. As such, iYdoes not directly apply to carbon
dioxide emissions, either from the tailpipe or "upstream" (in the case of biofuels), which are
generally proportional to fuel economy: Most SULEV vehicles have low rates of COZ
emissions. For example, the Toyota Camry 2008 hybrid has an EPA air pollution score of
9.5 out of 10 (9 or greater equates to SULEV), and a greenhouse gas score of 9 out of 10.
The San Francisco Taxicab Commission has produced a Green Guide for taxicabs showing
emissions, fuel economy, and price for 20 vehicles commonly used in taxicab fleets.3
A SULEV standard will reduce locally generated air pollution. Whether it helps address
global climate change depends on whether companies respond by choosing the most fuel-
efficient vehicles in order to offset higher purchase costs. Alternatives that would directly
address climate change issues would include a fuel economy standard or COZ tailpipe
emission standard. New York City, for example, has a 25 mpg gallon standard for vehicles
entering the taxi fleet from October 2008, rising to 30 mpg after October 2009. San
Francisco is currently developing detailed requirements to comply with legislation
mandating that the San Francisco taxi industry reduce its total greenhouse gas emissions
by 50% from current levels and 20% from 1990 levels by 2011.
SULEV Issues
In implementing a SULEV requirement, the following issues need to be considered.
Capital Cost. The purchase cost of a SULEV vehicle will be substantially higher than the
typical used Crown Victoria currently in widespread use as a taxicab. This will be true even
allowing for the possibility of purchasing used SULEV vehicles. For example, according to
Kelley Blue Book (www.kbb.com) a 2004 Crown Victoria with 100,000 miles in good
condition costs about $5,740. By comparison, a Toyota Camry sedan of the same age,
mileage and condition costs about $9,280. Purchasing a hybrid vehicle, in order to make up
for initial cost through fuel savings, would require paying more. For example, a 2004 Toyota
Prius with 100,000 miles in good condition costs about $11,660. The Ford Escape hybrid
was introduced in 2001, but does not appear on the list of California SULEV vehicles until
2005. A 2005 Ford Escape hybrid with 100,000 miles in good condition costs about
$11,790.
Higher purchase cost raises the barrier to entering the taxi market and would probably
result in companies charging higher lease rates. For example, the City of San Francisco,
which regulates taxi lease rates (also known as gate fees), has increased the daily
maximum daily gate fee in order to finance purchase of CNG and hybrid taxis that would be
needed to meet a requirement to reduce greenhouse gas emissions from the city's taxi
fleet. However, drivers who have CNG or hybrid taxis achieve savings in fuel costs that are
estimated to more than outweigh the increased gate fee.
Maintenance Cost. SULEV vehicles are likely to have higher maintenance costs than
current typical taxicabs. For drivers that do not own their cabs, this may also result in added
lease rates. Equally important is the added risk; most SULEV vehicles have not been
proven to withstand high intensity use as a taxicab, and so maintenance costs and long-
term reliability are uncertain.
s http://www.sfgov.org/sitettaxicommission_page.asp?id=78181.
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Fuel Savings. Higher capital and maintenance costs would be offset by fuel economy
savings for some but not all SULEV vehicles. Figure 3-3 shows the difference in operating
cost per day between two hypothetical vehicles: 1) a Crown Victoria with a purchase cost of
$6,500 that gets 13 miles per gallon; and 2) a SULEV vehicle with a purchase cost of
$25,000 that gets 29 miles per gallon: These mileages are somewhat less than the EPA
ratings and are intended to representing likely real-world conditions. The operating costs
include depreciation of the purchase cost for each vehicle. For the sake of analysis, it has
been assumed that the new SULEV and the used Crown Victoria would both have a
remaining useful life of 200,000 miles. In the figure, a positive cost difference means that
the SULEV is less expensive, and a negative cost difference means that the Crown Victoria
is less expensive. As shown in the figure, despite assumptions which are optimistic toward
the Crbwn Victoria, the SULEV is less expensive under most likely scenarios regarding the
cost of gasoline and the number of miles per day that the cab would be driven.
Another way to consider the tradeoff between higher purchase cost and better fuel
economy is illustrated in Figure 3-4. Each line shows how much more a taxi driver could.
pay for a SULEV and still break even (based on total daily operating cost including
depreciated purchase cost and fuel cost), using various assumptions about the cost of the
fuel and the fuel economy advantage of the SULEV vehicle. For example, if a SULEV
vehicle has 10 miles per gallon better fuel economy than a Crown Victoria, and gasoline
costs $3.50 per gallon, then paying up to $15,000 more for the SULEV would still result in a
savings in total daily operating cost. For each miles-per-gallon line, if the added cost for a
SULEV is above the line, then total daily operating cost is higher for the SULEV than for the
Crown Victoria; if the added cost for a SULEV is below the line, then total daily operating
cost is lower for the SULEV than for the Crown Victoria.
Compatibility with Rules in Other Cities. Most SULEV vehicles are not legal for operation
as taxicabs in Los Angeles under current regulations which specify a minimum size for
sedans. More detailed investigation would be needed to determine whethersome of them
may qualify. As a result, companies that operate in Los Angeles might have to establish
separate fleets that operate only in Santa Monica. Some companies might decide not to
operate in Santa Monica at all. Others might reduce the number of taxi permits they
request, since their current permits are used only part-time in Santa Monica and the ones
assigned to SULEV vehicles might have to be used full-time in Santa Monica. The Los
Angeles companies currently charge the same fares in Santa Monica that they do in Los
Angeles, considerable lower than the fares charged by Santa Monica-only companies. If a
fleet is operated only in Santa Monica, the companies could decide to raise rates. It is also
possible that Los Angeles may change its rules to accommodate low-emissions or fuel-
efficient vehicles.
Wheelchair Accessibility. Wheelchair accessible taxicabs are typically converted
minivans, none of which is certified as SULEV. It is possible that one of the available
SULEV vehicles could be converted to a wheelchair accessible configuration, but this would
need to be determined.
Prior Investment. Some companies have already made investments in alternative fuel
vehicles. We have not investigated the environmental characteristics of these vehicles, but
the City may wish to allow an accommodation for these vehicles to recognize the effort that
these companies have made.
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Figure 3-3 SULEV vs. Crown Victoria: Difference in Total Cost/Day
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Fuel. Costper Gallon
Santa Monica Yaxi Study Technical Memorandum
CITY OF SANTA MONICA
Figure 3-4 Breakeven Capital Cost Depending on Fuel Cost and SULEV Fuel Economy
Advantage (150 Taxi Miles Per. day)
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Options for SULEV Implementation
The City may wish to phase in the SULEV requirement over several years as in other cities that
have set strict environmental requirements. The City of New York is allowing until 2012 to have
a fleet consisting entirely of fuel efficient vehicles.° San Francisco has set a target of 2011 to
reduce total Greenhouse Gas (GHG) emissions of the taxi fleet by 50%from current levels and
20% from 1990 levels.5
A SULEV requirement allows more flexibility than a fuel economy or greenhouse gas
requirement. However, none of the vehicles now commonly used as taxis are SULEV certified.
Much of current fleet in Santa Monica is probably old and should be replaced. Ignoring the
economic impact for the moment, the shortest feasible timeframe for replacing the entire current
fleet with SULEV vehicles would be six months to a year after awarding new company permits
or franchises.. This would allow time for selling the existing fleet, arranging flnancing, getting
delivery or locating suitable used vehicles, and having vehicles inspected by the City or a
designated inspection station.
Added to other requirements under discussion, requiring total fleet replacement in a year or less
would run the risk of significant disruption of the taxi. business, including elimination of all but the
best financed companies and rate increases which would be justified by the need to pay for the
new vehicles despite fuel savings.
A less risky alternative would be to phase in a SULEV requirement over at least-three years. If
the City elects to require that all drivers be affiliated with a company or association of some
miriimum size, each company or association could be required to have a fleet with at least one-
third SULEVs after one year, two-thirds SULEVs after two years, and entirely SULEVs after
three years. If the City uses an RFP process, companies that commit to a faster phase-in could
be awarded higher points in the scoring process.
If the City wishes to have some accessible vehicles in the taxi fleet, then it will be necessary to
allow an exemption from the SULEV requirement for these vehicles. This is the approach that
New York City has taken.s This exemption could be phased out if suitable wheelchair
accessible SULEV vehicles become available in the future.
The Task Force resolution included a recommendation for scoring and award criteria that
provide additional consideration and priority to taxi fleet operators that: 1) exceed the SULEV
standard, 2) reduce petroleum usage, and/or 3) can demonstrate reductions of greenhouse gas
emissions to the maximum extent possible. The hybrid. vehicles included in Figure 3-2, shown
earlier, would be examples of vehicles that do all three of these things: Some CNG vehicles
may also fit these criteria. If the City elects to use an RFP process, then commitments to using
hybrid vehicles (or other technology that meets these criteria) could be used to award added
evaluation points, potentially leading to access to more permits, priority in choosing a color
scheme, or exclusive access to taxi zones or the Santa Monica Pier.
° Press Release 156-07,May 22, 2007, "Mayor Bloomberg Announces Taxi Fleet To Be Fully Hybrid By 2012," at
www.nyc.gov.
e Press Release, March 8, 2008, "Mayor Newsom Signs Alternative-Fuel Taxi Legislation," at
http://www.sfgov.org/site/mayor index.asp?id=76640.
e Taxicab and Limousine Commission Rules and Local Laws, Chapter 3, Taxicab Specification, at
http://www. nyc. gov/html/tlGhtm I/pules/rules. shtml.
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Vehicle Standards and .Inspection
Options for improving the taxi fleet, including adherence to appearance, safety, and emissions
standards could include:
e Continue the current practice of minimal inspection by the Police Department and the
outside mechanic requirement, plus relying on companies to ensure compliance by the
their fleets, subject to penalties assessed against the companies for non-compliance.
e More detail inspections conducted by a City department, for example mechanics who
maintain the City's fleets or Big Blue Bus.
o Designating a single third-party inspection station.
Regardless of which approach is chosen, the specific standards for vehicles need to be
improved. The current requirement of safety certification from a state certified mechanic lacks
specific provisions and does not address appearance issues. An example of an expanded set of
vehicle standards is the list used by Sacramento, which is based on criteria developed by San
Diego. The following conditions are deemed substandard:
1. Peeling, defaced, or improperly repaired exterior decals, letteririg, or numbering;
2. Any door, window, hood, or trunk that fails to open or close securely;
3. Exterior paint or color plan that is different from that approved by the City or that is not
maintained in the condition originally approved;
4. Dirt, broken fixtures, or other conditions in the passenger compartment that could soil or
tear a patron's clothes;
5. Rust or dents in the vehicle's exterior that are more than trivial, as defined in No. 6;
6. Any missing components of the vehicle, including but not limited to chrome and rubber
strips, or other components that might snag, tear, or injure a driver, pedestrian, or
passenger. Any such damage will be considered to be more than trivial when single or
multiple areas of damage affect an aggregate area of at least three linear feet of the cab
exterior. The measurement of each damaged area will be taken between the two most
widely spread points of the affected surface;
7. Dirty luggage compartments or luggage compartments that are maintained in condition
that would soil or damage baggage;
8. Driver or passenger compartments that have litter or trash;
9. Torn or improperly repaired upholstery, headlines or floor covering;
10. Lift functions of accessible taxicabs that are not operating, or not operating properly.
The inspection would also need to ensure that vehicles comply with any emissions requirements
that are adopted. Assuming the SULEV standard is used, anyone can verify that a vehicle was
certified as SULEV by checking the emissions sticker, usually mounted on the underside of the
hood. Anyone can obtain the results of a vehicle's most recent smog check using the web site of
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the Bureau of Automotive Repair. However, it would be desirable for a state licensed smog
check station to verify that the vehicle actually meets the SULEV standard.
Fai'@ R@gll'at10t7S
Meter Rates
Most U.S. markets either establish a meter rate for all companies, or if not they establish a
maximum meter rate that all companies can charge. For those with maximum. rates, an
additional option is to require companies to use the same meter increments, so that customers
can easily compare prices. In Santa Monica, there is great variety of rates, but as discussed
earlier, two fare structures are most common:
• The companies that also operate in Los Angeles charge $2.65 for the first 1/7th mile and
$.35 for each additional 1/7`h mile ($2.45 per mile). Afive-mile trip would cost $14.90.
The flat rate to LAX is $30.
• Among the companies licensed in Santa Monica only; the most common rate, charged
by 17 companies operating 86 cabs, is $1.90 for the first 1/18th mile-and $.20 for each
additional 1/18th mile ($3.60 per mile). Afive-mile trip would cost $19.90. The flat rate to
LAX is $45.
A taxicab that also operates in Los Angeles may be unable to charge more than the fare set by
LADOT. However, the companies that operate only in Santa Monica provided a variety of
reasons, discussed earlier, to justify higher fares in Santa Monica. For this reason, setting a
single fare in Santa Monica may be unwise. If the City wishes instead to set a maximum fare,
then one corresponding to $19.90 for afive-mile trip would include the fares charge by 88% of
all permitted taxis in the city, as shown in Figure 3-5. A rate corresponding to $17.90 for afive-
mile trip would includetwo-thirds of the cabs currently permitted in Santa Monica, including
those operated by most of the larger companies.
The City could also require all companies to use the same increment. For example, to
accommodate taxicabs that operate in Los Angeles, all companies could be required to charge
using the same increment specified by LADOT, currently 1/7th mile.
Figure 3-5 Percent of Permitted Taxis within Specified Fare Limits
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Five-mile Trip Cost
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Flat Rates
Flat rates for trips to common destinations such as airports protect tourists and other infrequent
taxi users from overcharging. As with meter rates, Santa Monica requires registration and
posting but does not regulate flat rates. Most companies in Santa Monica charge a flat rate to
LAX that corresponds to the. meter rate for approximately 11 miles. Depending on the area of
the city where the trip begins, this is clearly not in customers' interest. Two options for the City
to consider would be:
• Require two flat rates, one for the area north of the Santa Monica Freeway and one for
the area south of the Santa Monica Freeway.
e Make the flat rate an option for the customer. Drivers would be required to offer the flat
rate, but passengers would have the option of choosing to pay by the meter instead.
This option would be attractive to residents and frequent users, but might be confusing
for tourists who would have difficulty determining how to choose.
Discounts
Some companies in Santa Monica offer discounts. These may be formal and advertised, for
example using coupons, based on contracts with volume users, or informal. Santa Monica
currently has no rules about discounts: Some jurisdictions, including Los Angeles, prohibit them.
Some Santa Monica companies consider discounts an important part of their marketing
program, and a form of special service for residents of Santa Monica.
Measures to Prevent Overcharging
Setting a maximum fare, requiring a common mileage increment, and requiring flat fares should
all help avoid instances of overcharging. Regulations requiring drivers to take the most direct
route serve the same purpose but may be flouted by drivers willing to take advantage of
customers unfamiliar with the service area.
An additional option for discouraging overcharging also has other positive impacts on customer
service. Regulations can require printing meters, as is the case in Los Angeles. These meters of
course verify the amount on the meter in writing but they do much more.
• If there is more than one meter rate on the meter, the receipt indicates which rate was
activated and charged focthe trip.
• The receipt indicates if there were any "extra" charges on the trip and itemizes the
amount. (These charges are often programmed into meters for surcharges such as
legitimate airport fees, per-passenger fees, etc.)
• The receipt indicates the date and time, the cab company, and the cab number, greatly
improving information available to the customer or authorities for complaint investigation.
'f1SUPat1C@
Santa Monica is considering the possibility of increasing liability insurance limits from its current
levels to a level such as $1,000,000 combined single limits (CSL). Although the peer cities do
not have limits this high, other areas in California do, including Orange County, and companies
are able to obtain these limits. We have verified that such coverage is available for taxicabs in
Santa Monica: The cost per vehicle would increase by about one-third if the limits were
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increased from their present limits to $1,000,000 CSL. A higher liability insurance limit would
protect passengers, other drivers, and pedestrians who might be involved in an accident. The
higher limit is not at all unreasonable considering the likely claims that could result from amulti-
injury accident.
Recent media coverage has raised the issue of uninsured motorist coverage. This is not
typically required, but is relatively inexpensive ahd would add consumer protection, for example
in an accident that is not the fault of the taxi driver and where the other driver is uninsured or
leaves the scene of the accident.
Service to Hotels
During the various, input sessions from companies and drivers there were vocal complaints
about exclusive hotel taxi arrangements and/or fees required by hotel doormen in order to load
fares.
Hotel exclusives are allowed by some jurisdictions and prohibited in others. In these
arrangements, hotels are typically paid a fee by the taxicab company. They are more common
at upscale hotels where there tend to be more frequent and longer trips and tips which help
absorb the fee. With unregulated meter rates, there is the potential for taxi trips to absorb much
higher fees. These fees however typically result in higher company fees charged to the driver
and may result in higher fares for customers. If such fees are made illegal, the companies can
be prohibited from paying them and hotels can be prohibited from receiving them. Exclusive
arrangements can also be prohibited by prohibiting exclusive cabstands even if on private
property. (Los Angeles defines a cab stand as "an area on private property (such as hotels,
LAX, Union Station, etc.) designated by the owner for parking taxicabs while waiting for
passengers.)"
Another cost to drivers at hotels are fees charged or expected by hotels or by bellmen to lead
the driver. If these are official hotel fees, then these might only be charged by hotels with
exclusives that load anon-exclusive cab. So the theory is that the cab should pay what the
companies would normally be paying. However, there may also be unofficial fees or "tips" for
favorable treatment from bellmen. This practice can likely be made illegal also, but enforcement
may be difficult.
Enforcement and Administration
Many of the changes under discussion would affect the level of effort required to administer and
enforce taxicab regulations in Santa Monica.
Staffing Levels
Currently the City has a taxi detail consisting of one motorcycle patrol officer. His taxi-related
responsibilities include inspecting vehicles once per year, reviewing driver and vehicle owner
background checks, approving or denying permit applications, and conducting spot checks in
the field, for example with respect to use of taxi zones, posting of required signs, and operation
by unpermitted drivers. He works four days a week, one in the office on taxi matters and three
on street patrol, not limited to taxicab issues. Other patrol officers have been trained on taxi
issues and also help with enforcement.
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.The Revenue Department has principal responsibility of administering the taxi and driver
permitting system. Three Revenue Operations Assistants spend a portion of their time on taxi
business, supervised by the Revenue Operations Supervisor. The last fee study showed that
Revenue Department staff spend about four hours per driver per year on licensing and
permitting activities, or approximately one full-time equivalent person per year. The level of
effort was reduced as a result of changes made in 2004 so that all permits expire on September
30`" of each year, and companies are required to coordinate permit applications for all vehicles
and drivers affiliated with each company. This effort is concentrated in the fall when the permits
need to be renewed.
Other staff who spend a small portion of their time on taxi issues include the Risk Manager, who
reviews insurance binders and policies, and two staff people in the Consumer Affairs division of
the City Attorney's office. They investigate complaints that come into the City's complaint hotline
and conduct appeals hearings for drivers who appeal a permit denial.
Penalties
The City's taxicab ordinance specifies that violations "may be an infraction, punishable by a fine
up to $250, or a misdemeanor, punishable by a fine up to $1,000 per violation and/or up to six
months in jail." The traffic citation data listed earlier shows that the only common citation
against taxicabs is for improper use of taxi stands and parking spaces. Other cited violations are
related to the signs that must be posted in each taxicab (22 citations in three years), driver
permits (16 citations), and business licenses (7 citations).
Otherjurisdictions have penalty schedules that distinguish among violations based on severity,
including many violations that have been the source of complaints in Santa Monica-but
apparently have never resulted in any sanction. Examples include overcharging, non-working
equipment in vehicles, and refusing service. A key component of regulations in the peers is that
taxi companies are held responsible for violations by their drivers.
Sacramento's ordinance specifies that,. "the permitted taxicab fleet association shall be liable fbr
all penalties incurred by affiliated drivers." West Hollywood assigns points to franchise holders
for violations by theirdrivers, with monetary penalties based on the points. Regulations in Los
Angeles have similar provisions. Other jurisdictions also allow for suspensions of various
periods, providing a more flexible tool than outright permit revocation.
Stakeholder and Peer Perspectives
Comments from a number of stakeholders suggested that additional enforcement might be
needed regarding taxi operation in the downtown area, including illegal parking., taking up
parking spaces while waiting for iusiness, and speeding in alleyways. In the driver workshop,
several participants also suggested that additional enforcement was needed so that drivers who
flout taxi regulations and traffic laws do not unfairly affect the business of more law-abiding
drivers. Some level of added enforcement may be needed, but the focus of this analysis is on
changes to the structure of the taxi industry and regulations that will simplify enforcement and
promote more self enforcement by taxi companies: Drivers and managers also complained that
the permitting process is too time consuming. City staff suggested that combining all taxi
functions within the Police Department would be more efficient for the City and for applicants.
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Los Angeles is the only peer city that has staff specifically dedicated to enforcement of taxi
regulations. The other cities rely on code enforcement staff and police officers who mix taxi
enforcement with other duties.
Impact of Proposed Changes
Most of the changes under consideration would reduce the level of effort needed to administer
and enforce taxicab regulations. Figure 3-6 provides a summary of the principal changes and
their impact on level of effort.
If the City issues franchises or permits to companies, then these companies would have an
incentive to promote compliance by their drivers. This would be especially true if the City has
the option of suspending a company's franchise for some period of time in the event of a poor
compliance record. The possibility of a company permit not being renewed or losing points in a
future RFP would also create an incentive for a company to monitor its own drivers and weed
out problem drivers.
If there were fewer companies it would be easier for City staff to develop a relationship with
each company. Requirements for a staffed place of business and designating a responsible
individual would be similarly helpful
One proposal that could create some additional effort for the City would be some form of driver
testing. The City would need to develop a test that was perceived as fair, non-discriminatory,
and relevant and administer it or make arrangements fora third party to develop and administer
such a test. An extensive training program, at least in the short run,. is most likely something that
the City would require companies to conduct, with approval of content by the City. However, it
would be feasible for City staff to conduct presentations or workshops for drivers to focus on
issues of concern for the City, such as the reasons and importance of certain rules, passengers'
rights, dealing with complaints, and disability rights. Additional information about possible driver
training programs is provided in the section on driver standards.
Figure 3-6 .Impact of Proposed Changes on Enforcement and Staffing
=;'~ _. ~:`-Pro~ose¢7Chan e~.: _.. ~~~~~ ~~: "--.~"~lro~acfon'Ci° Level of€ffort.~~~-'= "-
Issue permits (or franchises) to companies. Should result in more self-enforcement by companies, including
enforcin com liance b drivers.
Background checks for company owners and Minor effort for additional checks.
mans ement
Require a minimum size for taxi companies. Should simplify permit processing by reducing the number of
separate a lication packets.
Changes to authorized company fleet sizes If fleet sizes (i.e. taxi permits) are regulated, any process for
ad'ustin authorized fleet sizes will take time.
Distinctive color schemes and numbering Creates additional rules that need monitoring, but should
system. simplify enforcement overall byaiding in identification of cabs
and com taint investi ation.
Re wired centralized dis atch s stem Minor effort to determine com liance
Required record keeping Minor effort to determine compliance.
Ma aid some investi ations.
Increased insurance limits No im act
Staffed lace of business Should ease enforcement.
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-~ -Pro osed Chan a ~:~: ~~ tm act on ~i Leuet of Effort'. ~ =
Enhanced vehicle inspection No impact as long as inspection is done by a station designated
b the Ci at the cab owner's ex ense.
Driver training or testing Depends on the assignment of responsibility between
companies and the Ci .
SULEV vehicles No impact, assuming compliance is determined by a designated
ins ection station.
Senior and disabled discounts Some effort to investi ate com taints of non-com liance.
Senior and Disabled Diiscounts
Two types of discounts have been discussed:
1. A City subsidy for seniors and people with disabilities to use taxicabs, provided through
scrip, coupons, or similar mechanisms.
2. Discounts provided by taxicab companies:
City Administered. Taxi Subsidy
Among the peers, Los Angeles, Beverly Hills, and West Hollywood have City-administered taxi
subsidy programs. Many other cities. in Los Angeles County have similar programs, typically
funded through the Proposition A Local Return program. The City has received numerous
requests to establish a similar program in Santa Monica. Staff have investigated the issue and
determined that such a program would be less effective than the City's current Dial-a-Ride
program. These programs typically provide. a very limited number or value of trips per month for
each participant. For example, in Beverly Hills residents age 65 or older and disabled residents
with certain medical conditions may purchase one taxi coupon book each month worth $24.00
for $6.00. A maximum of $12.00 worth of coupons may be used per taxi ride. These limits mean
that participants carrobtain two or three trips per month, at a cost to the user of around $2 to $3
per trip. The City pays the taxi company $.90 for each $1.00 worth of coupons redeemed.
It is beyond the scope of this study to determine whether a program of this type would be a
worthwhile use of available City funds. From the perspective of taxi regulation, the only concern
is that such a program, if one were created in the future, would require participation by taxi
companies. In.some cities this participation is voluntary, and riders are instructed to call only
one of the participating companies. In others cities, participation is mandatory. For example, the
Beverly Hills City Code (7-4-215) requires that, "Each taxicab operating within the city shall be
subject to and comply with all provisions of the city's taxi coupon program as adopted by the
council, and shall accept taxi coupons as provided therein."
Taxi Company Discounts
Some cities require or encourage taxi companies to offer discounts to older people or people
with disabilities. In both West Hollywood and Beverly Hills there is a discount of 10% that
applies only to trips paid for with City-issued coupons. West Hollywood also requires that taxi
companies provide free medical transportation for trips within a 10-mile radius of West
Hollywood City Hall for West Hollywood residents with AIDS. Los Angeles leaves it up to each
taxi company to offer discounts if it chooses. A commitment to offerdiscounts may be part of an
RFP evaluation process. Some Santa Monica companies already offer discounts.
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Chapter, c is alyis
The potential economic impacts of regulatory changes to the Santa Monica taxicab market are a
function of several factors. In order to assess these potential impacts, it is first necessary to
understand the current economic realities of the Santa Monica market, as this is the baseline
from which all changes will flow. Unfortunately, it is very difficult to provide any precise
description of these economic realities, owing to the paucity of data on industry costs and
revenues.
There are several reasons for the data difficulties in determining the industry's financial status.
First, Santa Monica taxi companies that operate taxi fleets (e.g., Taxi Taxi, Euro Taxi) are not
immediately able to provide meaningful data on the number of passenger trips or passenger
revenue generated since this is information that only drivers have available-inasmuch as lease
drivers, rather than company owners, collect and keep all fare revenues-nor do they have
complete operating cost information since the drivers are responsible for gasoline costs.
Second, owner-operators workirig in the Santa Monica taxi market are highly diverse and it has
not been possible to survey enough of these individuals to obtain reliable data on costs and
revenues. In any case, such operators represent a minority of taxis operating in the city in any
case. Third, the non-local fleet operators (e.g., LA Yellow Cab, Bell Cab) that serve Santa
Monica appear to do so with vehicles that spend the majority of their time in other jurisdictions,
so it is not possible to easily estimate the revenues and costs for the Santa Monica portion of
their Santa Monica-permitted vehicles.
Given this situation, it has been necessary to supplement the empirical data that is available
with information derived from several estimation techniques to generate estimates of taxi
industry costs and revenues for Santa Monica. Figure 4-1 shows one plausible estimate of the
current economic situation of the Santa Monica taxi industry. It bears emphasizing that other
plausible estimates are possible using different assumptions for the income requirements of
drivers and the portion of permitted vehicles that are actually engaged in delivering service on
an average daily basis. The taxi supply and demand estimates shown in this table assume that
90% of the permitted vehicles are operated on an average daily basis in each operator
category-(1) local Santa Monica fleet operators (defined as companies that operate 10 or more
taxis); (2) independent owner-operators (companies or individuals with 10 or fewer taxi permits);
(3) non-local fleet operators (e.g., LA Yellow Cab). This reflects both the fact that most drivers
work only 6 days per week and that taxi fleet operators are rarely able to attract as many lease
drivers each day as the number of taxi vehicles that are in their fleet.
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Figure 4-1 Estimated Taxi Industry Revenues and Costs -
Current Situation
The estimate of taxi demand equates to approximately 2,050 taxi trips per day in Santa Monica,
or approximately 2.4 taxi trips per 100 residents. This is a high ratio of trips to residents for a
city with the characteristics of Santa Monica. To estimate driver income, assuming this high
level of estimated demand, estimates were made, as shown in the table, for taxi fare levels and
portions of different types of taxi trips:
1. Taximeter-based intra-Santa Monica trips (average of approximately 3 miles in length);
2. Taximeter-based local area trips that extend outside of the Santa Monica city limits
(average of 6 miles in length);
3. Airport trips (flat rate) to tAX. -
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The result of the calculation is that, even assuming high per capita demand levels, the average
taxi driver would net only about $80 per day. This equates to-about $24,000 per year for a driver
working 6 days per week on average. While this is a relatively low value, it is plausible in light of
other recent studies that estimated the income of taxi drivers in Los Angeles.
Using these baseline estimates of taxi supply, demand, costs; and revenues, it is possible to
develop estimates of the financial situation of the taxi industry under a new regulatory regime. It
is important to emphasize that these "New System" estimates assume that the level of demand
for taxi service remains essentially the same as for the current market situation (estimated to be
2,050 taxi trips per day). This is a reasonable assumption since, 1) the market is probably fully
served currently given the large number of taxis in Santa Monica, and 2) there are likely to be
no more than modest changes in taxi rates that would depress demand and perhaps even a
small reduction. The New System scenario also makes the following assumptions.
• A regulatory system is instituted by the City of Santa Monica that limits--directly or
indirectly-the number of taxis serving the Sarita Monica taxi market.
• Sufficient excess capacity is removed from the taxi market to produce a 10% or more
increase in daily taxi productivity. (Inasmuch as there is at least this much excess
capacity in the market currently, and probably much more, removing this capacity will not
reduce overall level of service to consumers of taxi service, hence will not impact taxi
demand.)
• Taxi vehicles must meet SULEV requirements (over some period of time).
• The increased capital cost of SULEV vehicles, compared to vehicles now typically used
for taxis, will be reflected in higher taxi lease rates, whereas the reduced fuel costs for
SULEV vehicles, resulting from improved fuel economy, will act to reduce the average
fuel cost per taxi per day.
• SULEV taxi vehicles are assumed to cost an average of $21,000 more than conventional
taxi vehicles and to achieve an average of 29 MPG fuel economy compared to a fuel
economy of 13 MPG for conventional taxi vehicles.
• Taxi operator insurance requirements are increased and the cost increases associated
with higher insurance standards will be reflected in differences in operating cost
compared to the current situation. (The cost increase will be on the order of $1,200 -
$1,500 per taxi vehicle per year.)
• City of Santa Monica regulatory fees may also be modestly increased to reflect both
cost-based fee adjustments and the shift to a franchise form of taxi permits.
• Increased earnings by drivers are not recaptured by taxicab companies in the form of
higher lease rates. Depending on the supply of drivers wishing to enter the industry and
the level of competition between companies for drivers, it is possible that some or all of
these increased earnings could flow to the companies:
Figure 4-2 shows the result of this "New System" financial assessment, assuming that all taxis
operate exclusively in Santa Monica.
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Figure 4-2 Estimated Taxi Jndustry Revenues and Costs-
New System
The three most significant changes compared to the current situation are:
1. The number of taxi vehicles serving the market is reduced by nearly 50%, from 412 taxis
today to approximately 210 taxis in the New System scenario (the 190 taxis operating on
the average. day represent 90% of all taxis that would be permitted to operate in Santa
Monica in this scenario).
2. Taxi vehicle productivity increases.
3. Driver net daily income increases to approximately $93 to $94 per day from $80 per day,
a more than 15% increase in driver compensation.
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If "non-local" cabs remain joint-permitted in other cities, and spend only one-third of their time in
Santa Monica, then the 45 local-taxis in service per day shown in the table would be equivalent
to 135 joint-permitted taxis per day, or about 150 total joint-permitted taxis. This would bring to
total fleet to about 310. total taxis.
Two important points can be made about this New System scenario. First, the taxi vehicle
productivity of 10 trips per shift per day that is associated with approximately 210 vehicles
serving the Santa Monica market at the estimated demand level of 2,050 total taxi trips per day
is well below the likely feasible level of 13 to 15 trips per shift per day (based upon experience
elsewhere). Thus even eliminating about 200 taxi vehicles in Santa Monica (or eliminating 100
vehicles assuming continuing service byjoint-permitted vehicles) probably leaves excess
capacity in the local taxi market; the market will not be under-served.
Second, even with the increase in driver net daily compensation, a driver working 10 hours per
day, 6 days per week would still net an average of only $g.00 to $g.50 per hour in this New
System scenario. Thus while taxi drivers would be significantly better off financially in the New
System scenario-at least those drivers still serving the market-their compensation would
remain low relative to the number of hours devoted to serving the market each day.
Because this analysis is based on numerous assumptions, its results should be considered very
uncertain. In particular the analysis assumes a high level of per capita demand for taxi service
to be consistent with even a minimal level of driver income earned in Santa Monica, and
assumes that all permitted cabs are actually working in Santa Monica. If a substantial number
of permitted cabs are not working at all, or are mainly working outside of Santa Monica, then the
number of cabs in the New System scenario would need to be adjusted downward to remain
plausible.
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haptr 5. ecomnaions
The City desires a revised process that:
e Reduces the negative effects of taxi oversupply, including congestion, parking problems,
and overcharging;
• Promotes quality service and safety for residents, tourists, and business travelers;
Provides reasonable rates and fares;
• Achieves environmental goals;
• Makes it possible for taxi drivers to earn a living wage;
• Allows for participation by local businesses in taxi operations; and
• Increases accountability and reduces the administrative burdens of the present system.
Based on the analysis presented in this report, we have developed the outlines of a new
process that promotes these objectives.
The City would conduct an RFP process that awards franchises based on flexible guidelines
concerning a desirable number of companies and taxicabs, including a mix of cabs permitted
exclusively in Santa Monica and cabs that operate as part of a regional system. Companies
would be selected, and the number of companies and taxicabs would be determined on the
basis of proposals, including companies' business plans demonstrating their ability to operate a
proposed number of taxicabs. Once selected, companies would have flexibility to adjust their
fleet sizes based on documentation provided to the City, as described in more detail below.
The analysis suggests that as many as approximately 200 "full-time equivalent" taxicabs may be
able to serve demand in Santa Monica without the negative effects of oversupply. This figure is
offered as a rough guideline rather than a definitive target. Since reliable data about actual taxi
demand is not available, it is not possible to arrive at an optimal size for the Santa Monica taxi
fleet with any confidence. For this reason, a system is needed that strikes a balance between:
1) providing guidance to prospective operators and some assurance that they will not face
destructive levels of competition; and 2) allowing companies flexibility to determine the best
number of taxicabs to operate based do company resources and market conditions.
Because demand is highly variable, it is desirable that the overall fleet include vehicles that
have the ability to serve Santa Monica at busy times but are not exclusively dependent on Santa
Monica for a livelihood. These part-time or "regional" fleets would expand the total number of
taxicabs permits that may be feasible. As an example, if 50 cabs are permitted in Santa Monica
and elsewhere, and these cabs spend on average one-third of their time in Santa Monica, then
a total of 150 local cabs and 150 regional cabs would result in 200 full-time equivalent cabs.
Request for Proposals
The City would issue an RFP announcing the intent to award franchises for taxicab service in
Santa Monica, with a range specified for the number of franchises and the number of total
taxicabs. A reasonable range would be 4 to 8 companies, including at least three local
companies and one or more regional companies, collectively operating between 200 and 300
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taxicabs licensed in Santa Monica,' with the total number of licensed taxis depending on the
mix of local and regional companies. These ranges, especially the range for the number of
taxicabs, would be guidelines only, subject to modification based on the proposals received.
We suggest that a company be considered "local" as long as it operates a fleet that is permitted
solely in Santa Monica. Because of high property value and zoning rules, it is very difficult to
locate a taxi business within the City Limits. A rule that a dispatch and business office be
located within some specified distance of the city (ten miles for example) would limit the travel
time of City staff if records need to be inspected and would limit excess driving time by drivers
when they need to pickup or drop off vehicles, turn in reports, etc. The City could provide
additional •preference in the RFP evaluation process for local companies that were already
established at the time the RFP was issued.
Proposal requirements would include:
• A commitment to operate a fleet including a minimum number of taxicabs, all of which
would be part of a centralized dispatch system. A reasonable minimum fleet size based
on other cities would be 25 vehicles permitted in Santa Monica. This should be enough
vehicles to justify-the overhead of a dispatch system and professional company
management.
• A description of how the dispatch system would work, including its ability to make trips
available to drivers throughout the city without favoring any driver, while minimizing
response time during all times that the company's vehicles. are operating.
• A commitment to maintain a staffed place of business where the dispatch. system is
located, required records are kept and can be inspected by the City, and customers can
file complaints and retrieve property left in vehicles.
• A desired number of taxicab permits and a minimum acceptable number of permits, and
business plans demonstrating the company's ability to operate the corresponding
numbers of cabs, including the following items.
• Evidence of financial stability, including a financial statement and evidence of sufficient
capital or debt funding to carry out the company's business plan.
• Information about company ownership and management sufficient to determine
qualifications and to determine that there is no significant overlap in the ownership or
management of multiple proposers.
• Details of the company's experience in operating taxicab service.
• A fleet plan showing how the company would acquire vehicles or replace existing
vehicles such that all vehicles meet requirements (described in more detail below) for
inspection, limits on emissions, and availability ofwheelchair-accessible service.
• A staffing plan demonstrating the availability of drivers to operate the number of
permitted taxicabs that has been proposed, or the ability to recruit and train the required
number of drivers. The staffing plan should include policies the company will follow in
reviewing driving records and allowing drivers to drive.
• A distinctive color scheme and name that are easily distinguishable from color schemes
and names of companies operating in nearby jurisdictions.
Following review with City staff these recommended guidelines may be revised downward. We assume the City will
consult further with taxi drivers and taxi company managers before settling on a guideline foruse in an RFP:
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• A training plan. Desirable content would include City regulations, company procedures,
defensive driving, map reading, local geography, customer relations, security and public
safety, and requirements for non-discrimination in treatment of people with disabilities
• A marketing plan, including a required listing in the local telephone directory and Yellow
Pages, and any other steps (such as advertising in the newspaper or tourist literature, a
web site, coupons, etc:) to ensure that potential customers can contact the company and
to ensure that drivers are not dependent on walk-ups and street hails for business.
• Proposed (ease rates and fees that would be charged fo all drivers. No differences in
fees among drivers based on access to the dispatch system should be permitted.
• An estimate of the number of daily dispatch and walk-up trips that would be served by
each cab. If the number of cabs or proportion of dispatch trips. differs from current levels,
or if the company does not currently serve the Santa Monica market, the rationale for the
estimate should be explained.
• Proposed meter rates and flat rates, consistent with limits set by the City, and any
discounts that would be offered to residents or to seniors or people with disabilities.
• A record keeping plan that includes dispatch logs and driver logs and is capable of
demonstrating the utilization of each permitted taxicab and the amount of business
carried by each driver.
Selection Process
The City would score proposals based on how well each company responded to each of the
requirements above. Starting with the highest scoring proposal and proceeding downward,
permits would be allocated within the ranges requested until a total number of companies and
permits within the desired ranges is achieved, including a mix of local and regional companies.
A second phase of negotiation or adjustment may be needed, since companies may need to
adjust their business plans after they learn more about the competitive environment that they
will face. The result would be an initial number of permits for each company, subject to
adjustment as described below. Conflicts in choices of names and color schemes may need to
be resolved using priority based on proposal evaluation scores, prior use; or negotiation.
Changes in Permit Numbers
The initial selection process would determine the maximum number of taxicab permits that each
company can obtain. A specified time period would be allowed for companies to bring taxicabs
for inspection and permitting and the resulting fleet would then be that.company's authorized
number of permits. This authorized fleet size would be subject to adjustment upward or
downward during the franchise period as follows:
• If the company is able to demonstrate, though dispatch records and driver logs, that its
fleet is achieving a threshold level of utilization set by the City, or is consistently unable
to respond to the volume of dispatch calls, then it would be able to increase its
authorized fleet size. The threshold level should be set in consultation with the
companies.
• If a company's dispatch records and driver logs indicate that its fleet utilization is below
some minimum level, then its authorized fleet size would be reduced by the percentage
that it falls below the minimum level. Alternatively, to avoid excessive monitoring costs,
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the City could reduce a company's authorized fleet size if its cabs consistently violate
taxi zone and parking regulations.
If a company is unable to maintain the minimum level of utilization for the minimum-required
fleet size, its franchise would be subject to cancellation.
In principle, the recommended process would allow for continuous adjustment of the allowed
number of full-time equivalent taxicabs, using on-street observation, analysis of records kept by
the companies, and review of complaints received by the City. In addition, at any-time, the City
could undertake a comprehensive review of the total authorized number of cabs. Such a review
would be appropriate if the City decides to issue a new RFP for franchises. Factors suggesting
that the authorized number should be reduced would include underutilized cabs, a pattern of
parking and on-street waiting violations, complaints about taxis cruising for business, and short
response times fortelephone orders. Factors suggesting that the authorized number should be
increased would include fully utilized cabs, a scarcity of cabs at taxi stands, and long response
times for telephone orders.
Meter Rates
The City should set a maximum meter rate and a common mileage increment that all companies
must use, as well as maximum flat rates for airport trips. The mileage increment should be
compatible with requirements set by the City of Los Angeles. A maximum meter rate
corresponding to $17.90 for afive-mile trip would include two-thirds of the cabs currently
permitted in Santa Monica, including those operated by most of the larger companies. A
maximum rate corresponding to $19.90 for afive-mile trip would include the fares charged by
88% of all permitted taxis in the city. Within the limit of the maximum rate established by the
City, companies would be able to establish any rate they like as part of their proposal or annual
filings. The City should require that rates be posted on the exterior of each cab, as well as in the
interior. There should be two flat rates to LAX, one for the area south of the Santa Monica
freeway, and one for the area north of the Sahta Monica Freeway.
Vehicle Inspection
The City should establish a single inspection facility to which all taxicabs must be brought in
order to be certified as safe and in compliance with City requirements. The facility could be run
by a City department, or it could be a private facility that is awarded an exclusive franchise. Taxi
companies would pay the cost of the inspection. The inspection should be based on a detailed
list of requirements, for example one that is similar to the one described in Chapter 2, based on
requirements established by the City of San Diego. Assuming that the. City adopts the proposed
SULEV emission requirement, then the inspection should determine compliance with this
requirement.
Emissions Requirements
The proposed requirement for vehicles meeting the SULEV emissions standard should be
phased in over three years to avoid negative economic impacts that would risk significant
disruption of the taxicab industry ih Santa Monica. Each company would be required to have a
fleet with at least one-third SULEVs after one year, two-thirds SULEVs after two years, and
entirely SULEVs after three years. Companies that committed to exceeding the SULEV
standard, and received additional points in the RFP scoring process, would need to
demonstrate that they were meeting their commitment. Failure to meet such an additional
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CITY OF SANTA MONICA
commitment to the SULEV standard could result in reducing the company's authorized fleet
size. Wheelchair-accessible vehicles should be excluded`from the SULEV requirement until
such time as the City determines that appropriate vehicles are available. City may also wish to
allow special consideration for investments in "green" vehicles already made by some
companies.
Wheelchair Accessibility
Initially, each company should be required to have at least one wheelchair accessible taxicab in
service at all times. Since the demand for this service is not known, a flexible standard may be
needed that would apply beyond the initial requirement. For example,-each company could be
required to show that it can respond to a request for wheelchair accessible service within a
specified response time, such as 15 minutes. This type of standard would work as well for
regional companies as for local companies. It may be necessary to exempt wheelchair
accessible vehicles from the SULEV requirement.
Franchise Term
The franchise term should balance several factors: 1) the possibility that some adjustments may
be needed after such a major change in the method of regulating companies; 2) the need for
some minimum term for companies to justify investment and to obtain financing; 3) avoiding the
expense and effort of overly frequent RFP processes. We suggest that the initial term of the
franchises should be three years, with one-year extensions available after that as long as
permitted by the City's code. However, the City should reserve the right to issue an RFP for
additional franchises if one or more companies drops out of the market or has its franchise
revoked.
Insurance
Raising the insurance requirement to $1,000,000 combined single limit would be feasible, and
would provide additional consumer protection. Companies with good finances should have no
difficulty obtaining this coverage.
Hotels
The City should consider prohibiting taxi companies from paying a hotel for exclusive rights.
This would fall short of outlawing preferential arrangements entirely, since companies could
compete on the basis of service quality or discounts. It would leave hotels the ability to ensure
good service for their guests and address possible congestion issues. Eliminating payments for
exclusive pick up rights would promote competition based on service and price and would
reduce the need for companies to recoup these payments through higher fares.
As an alternative, the City could leave the-issue of exclusive deals with hotels for possible future
consideration, since we did not investigate this issue in detail and the proposed changes should
significantly reduce competition and dependence on this market.
Enforcement
Companies should be held liable for all violations by their drivers. In addition to financial liability
for pehalties assessed against drivers, companies whose drivers have a poor record of
compliance should be subject to additional company-specific penalties. These could include
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CITY O~F SANTA M O N I C A m ~~~~~~~ ~~ ~~ __ ~~~~~ '
monetary penalties, reductions in authorized fleet size, or suspending a company's franchise for
some period of time.
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PPEDIX
PEER REVIEW
Santa Monica Taxi Study Technical Memorandum
CITY AF SANTA MONICA
Appendix A. Peer Review
`'
Regulatory
framework
When current
regulations
im IementedT ° " ° - Sal;ramento ,
Company/Association Permits
2006 Los An eles ' '
Franchise Awarded by RFP
process, approved by council
2000 West Holl oad
Franchise Awarded by RFP
process, approved by council
2003 Beverl Hills!
Certlflcate of Public
Convenience and
Necessity granted by
council.
Unknown, at least 1980's.
Company criteria If requirements met, association permit Must meet minimum company Essentially the same as Los Companies must establish
will be issued: requirement similar to Angeles except: need, provide market
• A single contact officer must be Sacramento plus computer Group 1' Taxicab operators with information and meet other
established who is authorized to bind. dispatching, business plans, etc. current permits considered on a minimum requirements
• A color scheme.. Predetermined number of "qualified/not qualified" basis such as "financial
• Minimum fleet size of 25 taxicabs in companies awarded based on without ranking and if qualified will capability" and meet other
operational condition at all times. responses to RFP on criteria: be awarded a franchise for no requirements of the City
• Acquire and maintain a minimum of Bidder Identification, more than the number of vehicles code such as convictions
one accessible taxicab in each
Corporate Structure &
currently licensed by the City .
Taxicab Fleet within six months of Organization Procedures taking into account a) Company
issuance of a permit. (5%) and/or driver complaints over the
• Maintain a staffed place of business Bidder Character past three years as a percentage
within 10 miles of city limit, with Qualifications (15%) to total complaints and b) Average
telephone service and business Bidder (Company) Response time as calculated by
facsimile number, Experience (25%) DOT random sampling 13 minutes
• 24-hour dispatch service. Management and or less.
• Maintain a complaint intake procedure Administration experience Group 2, RFP Criteria for new
and respond to consumer complaints. (20%) applicants or exiting companies
• Post and maintain a "Passenger's Bill Quality and Feasibility of wishing to expand also required
of Rights." Management/Business Plan minimum score of 80%:
• Establish and maintain a trip log (35%) Proposer Experience 25%
requirement for all drivers and . "If deemed necessary, each Manager Experience 15%
taxicabs. bidder's business locations) will Quality /Feasibility Management
bevisited b De artment staff Plan, 30%.
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CITY OF SANTA MONICA
Sapramento Las An eh3s WestHoll ood Beverl Hills;.
and others for the purpose of Character 30%
evaluating accounting practices, Also computer dispatching,
facilities, personnel and other business plans, etc.
o erational rocedures,"
Startup period System was phased in. Owners had 11 Each proposer to propose firm 90 day startup period 6 months for n/a
for new months from date of ordinance adoption - schedule for startup of computer dispatch.
regulations to form associations that met the operations and computer
minimum fleet size and other dispatching.
re uirements.
Computerized 24-hr dispatch capability is required, but Yes /Yes, including MDTs, also Yes /Yes, including MDTs. 2-way data communication
dispatch technology is not specified. Many of the computerized repoding. (e.g., MDTs) required in
required or drivers still use cell phones, but are addition to 2-way radio.
incentives? working together more as a team e.g, to
ass on calls.
Facility Must be within 10 miles of city limit. RFP points for facility and RFP points for facility and location, Provide and maintain a
requirements location, operating and dispatch. operating and dispatch. physical location for
holding of vehicles and
operation of the business
within ten (10) miles of the
Financial
None
Documents showing the
Same as Los Angeles. cit .
A financial statement of
requirements availability of sufficient equity applicant in the form and
andlor debt capital to startup content designated bycity.
and operate the proposed
service until it becomes self-
supporting. Audited financial
statements given greater
weight. Personal financial
statements kept confidential
Debt Funding -Minimum
documentation shall include
commitment letters from lending
institutions. "The letters should
makes ecific reference to..."
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CITY OF SANTA MONICA
__
~~ ~8aai~amento `:~.
~ ~ . 4ns`gn elegy ~ ~
~ VIlestHoll .pod':: `.... ~
~ ` ~ Beverl Hills;
Vehicle 350,000 CSL 100,000 /300,000 injury. 50,000 $100,000.00 / $300,000 injury or $350,000 CSL Not more
insurance properly. $350,000 CSL / $100,000.00 than $2,500 deductible.
property; Deductible.not more than
5,000.
Performance No $320 per vehicle authorized (so Ten Thousand dollars ($10,000) n/a
bond or 100 vehicles equals deposit on file at all times.
de osits? $32,200.00.
Nonrefundable No Non-refundable filing fee in the Non-refundable application fee in Taxicab Hearing of Public
application fees? amount of $6,000. the amount of $1,500. Necessity and
convenience $4,657.60
Modification $3,100.90
Franchise or Company/association permit: $2,500 $128 per month for each The franchise fee is established at $10,000.00
company fee (initial); $1,000 (renewal) authorized cab. regardless of $2,000 plus $800 per permitted
use times service adjustment taxicab vehicle in place per year.
factor currently 50%times meter (No vehicle ih place, no fee.)
adjustment factor to account for
increases since ordinance
passed.
Permit fees Vehicle permit: $150 ($50 for re- Vehicle $60, $840 per vehicle per year.
inspection) Driver $68 / $98 renewal
Driver permit: $75 ($50 late fee) + $59.50 Many others
fingerprinting
Change of association fee for vehicle or
driver: $100
Company fees to No Yes in RFP Yes in RFP No
driver evaluated?
Meter rate Maximum rates are set by the City. Established by the Board of Council sets. Usually follow Los Council sets. Usually
regulation Taxicab Commissioners and Angeles. follow Los Angeles.
Operators may charge below this legal approved by the City. Council
maximum. and Ma orb ordinance.
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CITY OF SANTA MONICA
'~ ~ ~ ~ ~~ ~ 8aoramentd ~°~~ ~; ;~: LoeAn' ales ~~i~` WsstHollood ~.. . ~ ~ ~. Beverl Hillsr ""~~~i
Meter rate Maximum Rates are adjusted annually Rate indexing process using Council sets. Council sets.
changes using the CPI-T index. These annual CPI other factors.
increases are determined by the city
manager, but city council may choose to
hold a hearing to disapprove or modify
rate than es.
Current meter (Maximums) Flaa drop - $2.45 (1/7 mile or Flaa Drop - $1,90 (1/9 mile) Flag drop - $2.45 (1l7 mile)
rates Flag drop - $4.00 (increment is 1/5 mile) 47.5 seconds) Per mile - $1.80 Per mile - $1,40 (increment
Per mile - $2.50 (increment is 1/5 mile) $0,20 addition to the Flag Drop (increment is 1/9 mile or part) is 1/7 mile)
Per hour - $26:00 / hr for current bandit enforcement Per hour - $20 ($0,20 per 36 Per hour - $15,15 per hour
from LAPD = $2.65 total flag seconds of waiting or traffic delay (.20 per 47.5 seconds)
drop time) flat rate - $38 flat rate to
Per mile - $0.35 per additional Flat rate - $35 flat fare for trips the Los Angeles Airport
1/7 mile or part ($2.45/mile) from West Hollywood to LAX, (LAX).
Per hour - ($26,53 per hour To provide other flat fee trips,
(increment is 47.5 seconds) Franchisee must submit for
Flat rate - $42 for trips between approval a list of destinations and
LAX to downtown the total cost of each trip.
$15 minimum tri s from tAX.
Coupon program No. Various programs. Ordinance Coupon books worth $24 sold for Coupon books worth $24
for elderly 1 prohibits asking about payment $8 per book. May be used for up to sold for $6 per book. Paid
disabled. by coupon a $12 per ride. Companies are paid back to companies at 90%.
90% of face value.
# of companies 80, including 42 single-cab operators and 9 4 n/a
before the 16 two-cab operators
current
re ulations.
# of companies 8 9 7 (4 existing plus 3 new) 3
after the current
re ulations
e "...operator or its employees/order takers/dispatchers shall not ask a customer requesting taxicab service his/her destination nor if payment wilt be by
transportation coupons ...issued by the City or its agents, unless guidelines for such ..:questions have been ... approved by the Department."
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CITY ®F SANTFl MONICA
~~~~ Sao[amento 4.osAn el~s ~ ~ WestHoll ~~sod ~ . ~ Beverl Hills.
Can cabs be Yes. Mostly occurs with SITOA, which Yes. Yes. (75% are jointly permitted in Yes, but only with W.
multi-
' holds the airport concession. These cabs Los Angeles or Beverly Hills.) Hollywood..
urisdictional? are licensed in Count .
How many taxis 353, which fell through attrition during the 2,183 421 n/a
before new moratorium to about 320
rocess?
How many taxis 371 $2,303 530 120
toda ?
How number of By companies City authorized 120 new vehicle 109 new taxicab vehicle permits to Established in the
taxis established permits before the process. be allocated to Group 2. Staff certificate, which can be
per-company? Each proposer required to recommended that these 109 increased by further
indicate the optimum number of taxicab vehicle permits be application or decreased if
taxicabs that will be deployed to allocated in the following manner: not used or if there is a
provide the most efficient 54 permits granted to the highest finding of too many taxis
operation and a high level of scoring proposal. by the City.
service to the public in the 30 permits granted to the second
zones bid on. The bid also to highest scoring proposal
include adequate 25 permits granted to third highest
documentation on the number of scoring proposal
taxicabs needed to meet bidder If only two proposals score 80%or
objectives in each Service Zone above then 25 additional permits
re uested. slit 13/12.9
Minimum fleet 25 70 25 13
size
re uirement?
Permit caps? No caps. City council allocates new Every year can apply but must Same as an application for
How increase? permits, demonstrate need, Has not anew certificate.
ha ened,
Wheelchair 1':25 ratio required. Associations must: 2%of total fleet. Vehicle service At least 10%of each authorized A minimum of three (3),
vehicle "Acquire and maintain a minimum of one level verification and fleet ...and City may specify and City may require that a
requirement? accessible taxicab, as defined by federal documentation capture for vehicle service availability for maximum of ten (10), of
and state re ulation, in each taxicab fleet wheelchair accessible vehicles eneral wheelchair accessible the taxi vehicles shall be
s The City Council reserves the right to allocate all 109 permits to the top ranked proposer, or alternatively, to divide the available permits among the proposers.
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CITY pF SANT.A MONICA
l ! Sacramentp ° Los An else WestHoll ood Bwerl Hilis
within six months of issuance of fleet and other types as may be trips. Phase in allowed 5% start, wheelchair accessible and
management permit. Further, each approved by the Board of 5% after 1 st year. ADA certified.
taxicab fleet must acquire and maintain a Taxicab Commissioners.
ratio of one accessible taxicab, as defined Currently they are capturing if
by federal and state regulations, per vehicles are in service, but
twenty-five (25) vehicles within eighteen response time is based on
(18) months of issuance of fleet "meter on"and therefore
management permit. Accessible vehicles includes "load and lock" times.
must be in operational condition and Actual response time will be
available during fleet operating hours;" measured after required
dispatch enhancements take
lace.
Vehicle age or No age restriction, but stringent quality 8 years, plus some extensions All vehicles must be 7 years old or No vehicle in excess of five
miles limits? standards. San Diego vehicle standards beyond this for emissions. less, as calculated by the year of (5) years of age from the
were used as a model, See checklist at: the vehicle. year of its manufacture
http://www.cityofsacramento.org/finance/r unless such vehicle
evenue/documents(fC- undergoes a special
4TaxicabinspectionForm_write.ptlf inspection before the end
3rd part inspecting required. of the vehicle's fifth and
sixth ears.
Emissions No. At least 5% of vehicles certified Similar to Los Angeles No.
requirements or as Ultralow Emission Vehicles
incentives? (ULEV) within 12 months of
franchise date. 1.4 Low
Emission Vehicles (LEVs) may
substitute for each ULEV.
Additional points could be
awarded for proposing higher
than any minimum standard in
the RFP.
ULEVs also received one extra
ear 9 ears instead of 8 and
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CITY OF SANTA MONICA
Sacramento - Los An elea ' West Holl ood . '° Beverl Hills::` '
18 months of Sunday airport
access @ airport free and these
credits can be applied to other
vehicles in fleet.
Does the city or Inspected by a third party - Paratransit, City. City and company. Company.
the company Inc.
.inspect
vehicles?
Driver training None The training program including A program for training its drivers No.
requirements? curriculum and delivery shall be pursuant to a training manual
approved by the Board and shall developed by Franchisee. The
include City and State rules and program content shall be subject to
regulations; geography including review and approval by City and
map reading, major points of shall include, but not be limited to,
interest in Los Angeles, and the following: City Rules and
familiarity with the City of Los Regulations, Social Service and
Angeles and surrounding area; Senior programs, vehicle
driver safety and defensive inspection, vehicle safety
driving; vehicle safety and procedures, knowledge of traffic
maintenance/inspection checks; laws, passenger assistance and
customer service and relations; customer service, effective
sensitivity guidelines for communication skills, and
disabled, frail and elderly knowledge of Franchisee's
passengers; behind the wheel authorized service area and
driver training; and accessible passenger fares,
vehicle operation training and
CPR certification or equivalent
for accessible vehicle drivers.
Driver testing Controlled substance/alcohol testing The City completes official Examination, developed and Passing an examination
driver testing for driver administered by the Director, which which shall be developed
permitting functions. The tests whether the applicant and administered by the
companies provide training to possesses the qualifications transportation official in
the new potential drivers, and necessary to operate a taxicab. which the applicant
ma rovide them with uizzes The examination shall test the demonstrates the
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CITY OF SANTA MONICA
Saclamento~~ ~~'~ ~ ;: ~ '~ Los Ari eie~ ~"~~~~Vlfest Holl ~ qod ~ Heed Hills~~
to make sure they are ready to applicant's ability to communicate qualifications necessary for
take ourtest for a driver permit.. in English, to locate, with the aid of the operation of a public
a street atlas, street addresses and transportation vehicle. The
intersections, to communicate examination shall test the
points of interest and shall test his ability of the applicant to
or her knowledge of the laws of the perform the operator
road. Also drug and alcohol test. services authorized by the
permit, including, but not
limited to, the applicant's
ability to communicate in
English, to locate with the
aid of a street atlas, street
addresses and
intersections, and the
ability to communicate
points of interest,
Applicants must pass a
DOT dru and alcohol test.
Drivers service Typical non-refusal of service, taking Many requirements on company Extensive points system-for various Very basic: "Good
requirements most direct route, keeping vehicle clean, from their proposals. In addition, facets. grooming." No
such as etc. detailed rules. overcharging. No cruising.
response to
calls, etc?
How are Association must establish a complaint Company is primary and must Company requirements and city if Phone # for both regulator
complaints procedure and post number in cab. City submit plans on handling. City complaints not resolved or and company in cab. Most
handled? fields complaints if these are not keeps detailed records and uses contacted directly. go to company.
resolved. these in erformance re ortin .
Recordkeeping Drivers must maintain trip lags: Extensive record keeping Membership and lease driver Very limited reporting
or repoding Association must maintain the following including computer dispatching records, waybills, maintenance requirements. No driver log
requirements records for at least one year, available for records, record keeping records, maintenance plan, requirements.
inspection by the City: program for driver, member, financial statements, insurance,
"All records pertaining to the taxicab fleet employee, and operator fleet schedules, dispatch records,
association's o eration and mono ement, inclutlin rocess, location, and vehicle records, affirmative action
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CITY pF SANTA MpNICA
Sactamento ,l Las An ales ' : West Mall and Beverl Hills:
including but not limited to: dispatch logs, retention duration; complaints;;. records, and employment records,
vehicle inspection records, driver training accidents/claims; special 141. Each taxicab franchisee shall
records, passenger complaints, citation programs and agreements; drug maintain and provide to the
records, leasing records, insurance testing contracts, agreements; Department of Transportation and
records, copies of taxicab permits, driver Public Works (DOT) on request
permits, taxicab vehicle repair and order and dispatch record
service records, passenger comment information for each service
cards, existing and new driver training request.
records, vehicle insurance policies,
vehicle registrations, and taxicab sign out The driver is not required to record
log or equivalent, and other information flag down orwalk-up style trips.
as required by the city manager's rules
and regulations for the operation of
taxicab fleets."~o
Dedicated No dedicated officers. Handled by code Dedicated Code enforcement No. Police force only but they are None truly dedicated, but 3
enforcement enforcement with assistance from police officers. very involved. that also do parking, valet
officers? department, regulations and disabled
Six investigators and one senior placards.
investigator for bandit and illegal
taxicab enforcement.~~
Also three investigators and one
senior investigator for normal
taxicab regulation, inspection
and enforcement activities.
Orie chief investigator in charge
of all 15 other investigators.
10 In addition to the dispatch records, the driver is required to include all trips taken as part of his daily waybill record (dispatch, flag down, personal calls, airport
pickups, hotel pickups, etc.).
LAPD is now providing bandit taxicab enforcement activities as part of an overtime based activity with no charge for equipment or other fees. They provide
various sting activities each month and spend approximately $750,000 per year. As provided in the rates, each driver charges $0.20 additional in the flag drop.
They are then assessed $30 per month per "in service" cab. This money goes to a fund for extra I.APD and LADOT overtime bandit enforcement.
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._,... _...... _.d..._ .............. ...,...,...
CITY OF SANTA MONICA
~~~ , ; ~ ~~ ~ ~ ,~; ~ ~ .Sacramenta~~~ ; ~~~ ~ . ~ E,os~gn ele~~ . ~~ ~ ~::' 1Nest Holt ood .~ . ~ ~ ~ : ~.. ~ ~~~~verl Hllls>.
Evaluation; "Overall it s been a huge success." The Service quality has improved. Objectives met: opening entry and Very thorough driver
recent issues; industry formed associations without too Stand cabs in news, Gypsy or service quality. The system works. background checks, low
future plans much grief - all of them met the deadline unauthorized cabs is a problem. complaints. Driver
(Dec'06). The association model is Senior service is still a big problem. background checks take
working well because the managers are Consider system that gives Not enough emphasis on driver too long to get from police
trying to clean up the associations. They existing franchise advantage regulation /requirements, versus department. One day of
are complying with everything that we are over new entrant. companies fingerprint by appointment.
asking for. The main aims have been
achieved. Parking is still a big problem, but Big problem is parking:
without new requirements would be there is just nowhere for
Just from driving around town, the cabs worse. cabs. Taxi stands are
look a lot better and are more clearly Senior service is still a problem; needed in the business
identified. much to blame on coupon program district.
paying only 90%and grocery store
The City made a concerted enforcement trips. Some service complaints.
effort in association with the Code When meter fares are not
changes. A lot of Code Enforcement staff Grocery store service is a problem. set as they are in IA, cab
were assigned and "riding shotgun on meters have 2 rates and
these guys:' More emphasis next time on driver drivers can charge higher.
controls in company such as hiring,
May still be oversupply. Cab numbers qualifications, training. Trying to change to
have increased by about 25% since the franchise. Stated reasons:
moratorium was lifted. It's unclear how Next time make requirements even protect citizens, service
the industry or drivers are doing more stringent including standards, authority to
economically. performance. Overall however, regulate standards.
very good impact.
Next RFP will be stricter on
existin com anies to remain.
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