SR 11-13-2018 7E
City Council
Report
City Council Meeting: November 13, 2018
Agenda Item: 7.E
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To: Mayor and City Council
From: David Martin, Director, Transportation Planning
Subject: Introduction for First Reading of Ordinance amending and extending a taxicab
franchise granted to TMAT Corp., dba Taxi! Taxi!
Recommended Action
Introduce for First Reading an Ordinance amending and extending the taxicab franchise
of TMAT Corp., dba Taxi! Taxi!
Executive Summary
Traditional taxi service and the regulations that govern the industry have been
dramatically challenged by the emergence of multiple competitors and changing
consumer choices. Now, as a result of recent changes in State law related to taxi
transportation services, the City updated its local taxicab franchise ordinance. State law
allows a jurisdiction to regulate taxicab companies that meet the state definition of being
“substantially located” in that jurisdiction. Taxi! Taxi! is currently the only taxicab
company that meets this requirement. Staff is recommending that Council modify and
extend Taxi! Taxi!’s current franchise for five years to December 31, 2023. This does
not preclude other companies from seeking a local franchise if they meet the new
standards.
Background
Since the taxicab franchise was established by City Council in June 2009, several
actions regarding the taxicab franchise have been taken given the dramatic changes
affecting the taxi industry. In November 2010, Council granted taxicab franchises to
Bell Cab, Independent Taxi, Metro Cab, Taxi! Taxi! and Yellow Cab for five years.
Subsequently, Council granted a 2-year extension in 2015 and a 1-year extension in
2017 to all five taxicab companies. Currently, there are only four companies providing
taxicab transportation services in Santa Monica due to Metro Cab forfeiting their
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franchise in January of this year.
Past Council Actions
Meeting Date Description
June 30, 2009 Introduction and first reading adding Chapter 6.49 to establish
taxicab franchises
November 10, 2010 Introduction and first reading of five ordinances of the City of
Santa Monica granting a taxicab franchise to Bell Cab, Metro
Cab, Independent Taxi, Taxi! Taxi! and Yellow Cab
November 10, 2015 Introduction and first reading of Ordinances extending the taxicab
franchise of Bell Cab, Independent Taxi, Metro Cab, Taxi! Taxi!
and Yellow Cab
November 14, 2017 Introduction for first reading of Ordinances extending taxicab
franchises of Bell Cab, Independent Taxi, Metro Cab, Taxi! Taxi!
and Yellow Cab
At its last meeting, the City Council authorized an ordinance amending Chapter 6.49 of
the Santa Monica Municipal Code modifying provisions of the taxicab franchise
regulations in response to State law.
Discussion
The Municipal Code allows the City to grant nonexclusive franchises for the operation of
taxicab services within the City. Newly updated State law substantially limits a city’s
regulatory and permitting authority in order to reduce the regulatory burden on
companies operating in multiple local jurisdictions. Most local regulatory and permitting
requirements now may only apply to those taxicab companies that are substantially
located in the jurisdiction. Substantially located is defined by State law as: a taxicab
company that has a primary business address within the jurisdiction or the total number
of prearranged and non-prearranged trips that originate within that jurisdiction account
for the largest share of the taxicab company’s total number of trips within the county
within the past year. State law continues to allow companies permitted in Los Angeles
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County to service prearranged trips.
Currently, City Franchisees Bell Cab Company, Independent Cab Company, and Yellow
Cab Company are not substantially located within Santa Monica and as such, their
franchises agreements will terminate effective January 1, 2019. These companies are
not substantially located due to their primary business locations and the largest share of
their trips are in other jurisdictions. Bell Cab Company’s offices are located in the city of
Hawthorne. With a fleet of 320 taxicabs, Bell Cab provides trips in the cities of El
Segundo, Hawthorne, Hermosa Beach, Lawndale, Redondo Beach, Manhattan Beach,
Torrance, Palos Verdes, Rolling Hills, West Hollywood and Los Angeles. Independent
Cab Company’s offices are located in Los Angeles. With their fleet of over 400
vehicles, their service area encompasses cities from San Pedro to Granada Hills and
Los Feliz to Malibu, including Los Angeles, Beverly Hills, and West Hollywood. Yellow
Cab Company’s offices are located in Gardena. Their service area includes Bel-Air,
Brentwood, Calabasas, Century City, Hollywood, Inglewood, Pacific Palisades, Century
City, San Fernando, and Los Angeles.
Taxi! Taxi! is currently substantially located in Santa Monica and as such, they are the
only franchisee that continues to qualify for a franchise with the City. In order to
maintain its Taxicab Franchise with the City, Taxi! Taxi! must also provide
documentation, which must be maintained throughout the term of the franchise, of the
following as outlined in the Municipal Code:
1. Taxicab company is substantially located in the City;
2. Established fares, fees, or rates to be charged to customer;
3. Participation in the pull-notice program (regularly check the driving records of all
taxicab drivers);
4. Financial responsibility;
5. A safety and disabled access education and training program;
6. Motor vehicles to be used for taxicab transportation services are in safe
operating condition and have passed inspection by the City;
7. Address of an office or terminal where all documents pertaining to taxicab
transportation services may be inspected by the City; and
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8. Provision of a taxicab driver fingerprint-based criminal history check and
mandatory drug and alcohol testing program.
All of these requirements, with the exception of being substantially located, are part of
the current terms and conditions of Taxi! Taxi!’s franchise ordinance and are monitored
regularly by staff. The major modification to Taxi! Taxi!’s franchise ordinance relates to
the number of vehicles in their taxicab fleet. In the past, City Council authorized the
number of vehicles required in a taxicab company’s fleet. Now, Taxi! Taxi! will be
responsible for determining the number of vehicles in their fleet giving them the flexibility
to modify the number of taxicabs with demand for service.
Taxicab Franchise Fees
Table 1 summarizes the current fees that would be paid by Taxi! Taxi! based on the
current number of permitted vehicles and drivers. As the only franchise holder that will
be able to continue operating in the City on both a non-prearranged basis (i.e., taxi
stands and street hails) and prearranged basis, it is projected that Taxi! Taxi! may need
additional vehicles to meet demand. Table 1 includes a projection of potential fees with
the capacity of drivers and vehicles anticipated to be needed to provide efficient taxicab
service.
Table 1. Taxicab Franchise Fees
Fee Quantity
(current)
Total
(current)
Quantity
(projected)
Total
(projected)
Franchise Fee $5,000 1 $5,000 1 $5,000
Vehicle Fee $452 39 $17,628 50 $22,600
Renew Vehicle Fee $61.62 39 $2,403 50 $3,081
Driver Permit
Renewal Fee
$48 49 $2,352 70 $3,360
TOTAL REVENUE $27,383 $34,041
The current and projected revenue would not recover the full cost of administering the
taxi program. Just one taxicab company will be subject to the fees, resulting in
substantially reduced revenues. While program administration will be reduced,
reductions are not strictly proportional to the number of companies or vehicles because
there is a baseline administration for the program overall. However, increasing fees to
fully recover costs is not recommended at this time. Taxicab services continue to meet
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the needs of specific users, taxicab revenue has been on the decline for the past six
years and the future of the taxicab industry is still uncertain even with new state
regulations.
Financial Impacts and Budget Actions
Staff anticipates revenues to decrease by approximately $79,860 due to the reduction in
the number of permitted taxicab companies allowed to operate in Santa Monica.
Revenues will be adjusted during FY 2018-19 Mid - Year Review.
Prepared By: Cheryl Shavers, Senior Administrative Analyst
Approved
Forwarded to Council
Attachments:
A. Ordinance - PCD - Taxicab - Taxi Taxi Franchise - First Reading - 11132018
B. Ordinance to Establish Franchise System of Taxicab Operations June 30, 2009
(Web Link)
C. Award of Taxicab Franchises November 2010 (Web Link)
D. First Reading Extending Taxicab Franchises November 10, 2015
E. First Reading Extending Taxicab Franchises November 14, 2017
F. Modification to Taxicab Franchise October 23, 2018
G. Powerpoint Presentation
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City Council Meeting: November 13, 2018 Santa Monica, California
ORDINANCE NUMBER _________ (CCS)
(City Council Series)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SANTA MONICA AMENDING AND EXTENDING A TAXICAB FRANCHISE
GRANTED TO TMAT CORPORATION DOING BUSINESS AS TAXI! TAXI!
WHEREAS, on November 23, 2010, in accordance with City Charter Article XVI
and Santa Monica Municipal Code Chapter 6.49, the City Council adopted Ordinance No.
2332 (CCS) granting a taxicab franchise to TMAT, Inc. (dba TAXI! TAXI!), which was
subsequently amended by Ordinance Nos. 2342 (CCS), 2375 (CCS), 2506 (CCS), 2532
(CCS), and 2561 (CCS); and
WHEREAS, the term of the taxicab franchise is currently set to expire on
December 31, 2018; and
WHEREAS, Assembly Bills 1069 and 939 were enacted to modernize and
streamline the regulation of taxicab transportation services to better compete with other
modes of transportation and to move taxica b permitting from the patchwork of various
local requirements to limit permitting to the city or county in which the taxicab company is
substantially located; and
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WHEREAS, on November 13, 2018, the City Council adopted an ordinance to
amend Santa Monica Municipal Code Chapter 6.49 relating to taxicab franchises in
response to the changes in State law; and
WHEREAS, for over 30 years, Taxi! Taxi! has been and is currently substantially
located in the City and desires to continue providing taxicab transportation services within
the City; and
WHEREAS, considering that Taxi! Taxi! is in compliance with all provisions of
Government Code sections 53075.5 and 53075.52, Santa Monica Municipal Code
Chapter 6.49, and the terms and conditions of its current franchise, t he City Council
desires to extend the term of the franchise granted to Taxi! Taxi! for an additional five
years; and
WHEREAS, certain terms and conditions of the taxicab franchise must be adjusted
to conform to legislative changes in State law and improve taxicab operations and
efficiency within the City.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1. DEFINITIONS. Unless it is apparent from the context that it has a
different meaning, each of the following wor ds and phrases has the meaning stated in
this Section wherever it is used in this Franchise:
(a) CITY means the City of Santa Monica, a municipal corporation duly
organized and validly existing under the laws of the State of California with the power to
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carry on its business as it is now being conducted under the statutes of the State of
California and the Charter of the City;
(b) CO-OPERATIVE, ASSOCIATION or MEMBERSHIP means an
independent taxicab enterprise or organization owned and operated by its Memb ers for
the financial benefit of its Members. Each authorized taxicab fleet slot correlates to a
share or ownership in the Co-operative, Association or Membership;
(c) COUNCIL means the City Council of the City of Santa Monica;
(d) DRIVER/MANAGER means any Member of a co-operative, association or
membership Grantee, who drives, controls, and manages taxicabs for Grantee;
(e) FRANCHISE YEAR means the calendar year from January to December to
which the annual franchise fee is applied. May also be referred to as “Permit Year”.
(f) GRANTEE means TMAT Corporation (dba Taxi! Taxi!), a California
corporation qualified to do business in the State of California and to which this Franchise
has been granted;
(g) INVESTOR/SHAREHOLDER means any Member of a co -operative,
association or membership Grantee, who does not drive, control or manage taxicabs for
Grantee;
(h) LEASE DRIVER means a person who is an independent contractor
possessing a valid Taxicab Driver’s Permit and who drives a taxicab for Grantee;
(i) MEMBER means any individual person or Subchapter S corporation, as
defined in the United States Internal Revenue Code Section 1361, who owns one or more
taxicabs or shares, but not more than the maximum number authorized by this Ordinance,
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in Grantee. Only those individuals applying for Investor/Shareholder membership status
may apply as a Subchapter S corporation;
(j) STREETS means the public streets, roads, highways, freeways, lanes,
alleys, sidewalks or parkways which now exist or which may hereafter exist within the
City;
(k) TAXICAB DRIVER means any person possessing a valid Taxicab Driver’s
Permit driving and in possession of a taxicab for the purpose of providing taxicab
transportation services in the City. A taxicab driver may be an employee of, a lease driver
of, or a Member of Grantee;
(l) TAXICAB DRIVER’S PERMIT means a non-transferable authorization for a
taxicab driver to provide taxicab transportation services in the City;
(m) TAXICAB FLEET means the total number of authorized taxicabs that is
managed and controlled completely by Grantee, and not by a Member of Grantee;
(n) TAXICAB RULES means the administrative rules and regulations
established for taxicab operations in the City;
(o) TAXICAB VEHICLE PERMIT means a non -transferable authorization for a
specific taxicab to be driven or operated within the City for the purpose of providing
taxicab transportation services, whether as owner, lessor, lessee, or otherwise.
SECTION 2. GRANT OF FRANCHISE.
(a) Nature of Grant. The franchise hereby granted by City authorizes Grantee,
subject to all the terms and conditions contained in this Ordinance, the Santa Monica
Municipal Code, the Taxicab Rules, and all other applicable local, state, and federal law,
rules and regulations pertaining to taxicab operations, to provide taxicab transportation
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services within the City, including picking up persons and property by taxicab within City
boundaries, transporting such persons and property for hire over any streets from within
or to the City, and standing taxicabs at designated taxicab stands within the City.
(b) Term of Franchise. This Franchise shall become became effective on as of
January 1, 2011, provided that and Grantee has filed with the City Clerk, within 10 days
after the adoption of this Ordinance No. 2332 (CCS) granting this Franchise, a written
instrument, addressed to Council, accepting and agreeing to comply with all the terms
and conditions of this Franchise. Failure to timely accept this Franchise as set forth in
this Section may make this Franchise null a nd void. This Franchise shall expire at 11:59
P.M., PST, on December 31, 2018 2023, unless revoked or terminated earlier by City, or
unless extended by City in its sole and absolute discretion.
(c) Suspension of Franchise. City may, after due notice and an opportunity to
be heard, suspend Grantee’s operations under this Franchise for one or more days
pursuant to Santa Monica Municipal Code Section 6.49.050 6.49.040, under any of the
following grounds:
(1) Material noncompliance with any term or condition of this Franchise,
the Santa Monica Municipal Code, Taxicab Rules, or other City orders or directives, when
such noncompliance has not been cured after reasonable written notice thereof and
opportunity to cure;
(2) Grantee accumulates penalty points in a specified period of time in
an amount greater than the allowed threshold level as provided by resolution of Council
pursuant to Santa Monica Municipal Code Section 6.49.150 6.49.170;
(3) Grantee fails to pay any monetary penalties in accordance with the
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procedures set forth in Santa Monica Municipal Code Section 6.49.150 6.49.170 and any
resolutions or schedules adopted thereto; or
(4) Any of the grounds set forth in Santa Monica Municipal Code Section
6.49.050 6.49.040.
Any suspension of Grantee’s taxicab operations may affect any extension of the
term of this Franchise and may lead to assessment of monetary penalties in addition to
or as an alternative to suspension, or recommendation for revocation of this Franchise.
(d) Revocation and Termination of Franchise. City may, after due notice and
an opportunity to be heard, revoke and terminate Grantee’s Franchise pursuant to Santa
Monica Municipal Code Section 6.49.050 6.49.040, under any of the following grounds:
(1) Grantee has illegally conducted any type of public transportation
operation within the City;
(2) Any term or condition of this Franchise becomes invalid or
unenforceable and Council expressly finds that such term or condition was a
consideration material to the grant of this Franchise;
(3) The public interest would be served by revocation and termination of
this Franchise; or
(4) Any of the grounds set forth in Santa Monica Municipal Code Chapter
6.49.
(e) Cumulative Remedies. City’s right to suspend, revoke or terminate this
Franchise pursuant to this Section are in addition to all other rights and remedies which
may otherwise accrue to City by reason of any failure or refusal of Grantee to perform
any obligation imposed by the terms and conditions of this Franchise.
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SECTION 3. CONSTRUCTION OF FRANCHISE.
(a) Interpretation. Unless otherwise specified, the following terms govern the
interpretation and construction of this Franchise:
(1) The singular number includes the plural, and the plural number
includes the singular;
(2) Time is of the essence of this Franchise. Grantee will not be relieved
of its obligation to promptly comply with any provision of this Franchise by any failure of
City to enforce prompt compliance with the same or any other provisions;
(3) Any right or power conferred, or duly imposed upon, any officer,
employee, or department of City is subject to transfer by operation of law to any other
officer, employee, or department of City;
(4) Grantee will have no recourse whatsoever against City for any loss,
cost, expense, or damage arising out of any provision or requirement of this Franchise or
the enforcement thereof;
(5) This Franchise does not relieve Grantee of any requirement of the
City Charter, the Santa Monica Municipal Code, or any local ordinance, rule, or regulation,
other than exceptions expressly set forth in this Franchise; and
(6) This Franchise does not constitute an exclusive grant of any right to
carry persons or property for hire within the City.
(b) Limitations upon Grantee.
(1) This Franchise does not grant or confer any privilege or exemption
upon Grantee except as otherwise specifically provided herein.
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(2) This Franchise is a privilege to be held in personal trust by Grantee.
Grantee shall not sell, lease, assign, hypothecate, or otherwise transfer or dispose of this
Franchise or any interest herein directly or indirectly, by operat ion of law or otherwise,
without the prior written consent of City, expressed by ordinance, and then only under
such terms and conditions as may be prescribed therein. Any debt secured with more
than 50% of the Grantee’s assets constitutes an hypothecation for the purpose of this
Franchise. Any attempt to do so without City’s consent shall be null and void, and any
purchaser, lessee, assignee, hypothecatee or transferee shall acquire no right or interest
by reason of such attempted sale, lease, assignment, hypothecation or transfer. Any such
sale, lease, assignment, or other disposition of this Franchise shall be evidenced by a
duly and jointly executed instrument in writing addressed to Council and filed with the City
Clerk. The sale, assignment, transfer or other disposition of any of the issued and
outstanding capital stock of Grantee or of any general partner or joint venturer or Member
of Grantee, if a partnership or joint venture or membership exists, which shall result in
changing the control of Grantee, shall be construed as an assignment of this Franchise.
Control means (50%) or more of the voting power of the organization.
(c) Rights Reserved to City.
(1) There is reserved to City every right and power that is allowed or
provided by any provision of the City Charter and the Santa Monica Municipal Code, as
may be amended from time to time. Grantee, by its acceptance of this Franchise, agrees
to be bound by and to comply with any action or requirement of City in its exercise of any
such right or power.
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(2) Neither the granting of this Franchise nor any of its provisions shall
constitute a waiver or bar to the exercise of any governmental right or power of City.
SECTION 4. COMPENSATION.
(a) By its acceptance of this Franchise, Grantee agrees to pay to City all
applicable fees and payments, including the annual franchise fee, Taxicab Vehicle Permit
fee, and Taxicab Driver’s Permit fee for each authorized taxicab in Grantee’s taxicab fleet.
(b) Grantee, at its sole expense, shall obtain and maintain during the term of
this Franchise all required business and professional permits, licenses and certificates.
SECTION 5. TAXICAB FLEET.
(a) Fleet Size. Grantee is authorized by this Franchise to provide taxicab
services in the City through a taxicab fleet consisting of a maximum of 40 as determined
by Grantee, subject to the requirements set forth in this Section. The number of vehicles
authorized in Grantee’s taxicab fleet shall be set until modified by Council.
(b) Fleet Makeup – Wheelchair Accessible Vehicles. At least 10% of the
authorized Grantee’s taxicab fleet vehicles, proportional to its full time and part time
vehicles, must be side-loading wheelchair accessible vehicles in compliance with the
Americans with Disabilities Act (“ADA”), in accordance with 49 Code of Federal
Regulations (CFR) Part 38, Society of Automobile Engineers (SAE) J2249 standard,
applicable Federal Motor Vehicle Safety Standards (FMVSS), and Taxicab Rules. The
City Manager or his or her designee may require that Grantee increase the minimum
number of wheelchair accessible vehicles within its authorized taxicab fleet and may
specify vehicle service availability for general wheelchair accessible trips notwithstanding
any existing contractual arrangements.
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(c) Fleet Makeup – Emissions. Grantee shall provide vehicles that are at the
top of their class in terms of green house gas and smog ratings as demonstrated by a
SmartWay or SmartWay Elite designation by the EPA. Vehicles approved by the City
prior to January 1, 2016, are subject to the rules in effect at the time of the approval.
(d) Grantee’s taxicab fleet must be fully operational in accordance with this
Ordinance as of the effective date of this Franchise, unless otherwise authorized in writing
by the City Manager or his or her designee, in his or her sole and absolute discretion.
(e) Continuous Operation. After Grantee shall have established taxicab
services pursuant to this Franchise, Grantee must ensure that, except for necessary
repairs, all its taxicabs are available for service at all times. Grantee may, with advance
notice to the City, suspend the services of a taxicab, including the removal of that vehicle
from its insurance policy, only during the period of time that the vehicle will be suspended
from service. Grantee must provide written notice to the City no less than 5 business
days prior to the requested date that suspension of service would begin for each vehicle
that will be suspended from service, and include the end date for each such suspension.
An updated copy of the proof of insurance must be submitted to the City within 5 business
days following the suspension of a vehicle, and within 2 business days following the
reinstatement of any vehicle under this provision. The City must be notified of any
changes to the dates a vehicle will be susp ended from service 5 business days prior to
any such changes. Grantee’s failure to comply with these provisions shall constitute a
material breach of contract under which the City may immediately suspend or revoke and
terminate this Franchise. Monetary penalties may also be assessed.
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(f) Request for Reduction in Taxicab Fleet. Whenever Grantee may file a
written application with the City Clerk alleging that the public convenience and necessity
no longer requires Grantee to furnish taxicab services with the number of vehicles
authorized under this Franchise, Council will take evidence at a public hearing upon that
question and make a finding with respect thereto. Notice of such hearing will be given for
a period of at least 15 days prior thereto by posting such notice in each of Grantee’s
taxicabs; such notices, in a form satisfactory to City, are to be posted by Grantee. If
Council finds after the public hearing that the public convenience and necessity no longer
requires Grantee to furnish taxicab services with the number of vehicles authorized under
this Franchise, Council may authorize suspension or abandonment of such service upon
such reasonable terms and conditions as may be prescribed therein.
SECTION 6. OPERATIONS AND SERVICE – GENERAL
(a) Compliance with Laws. All vehicles, equipment and appurtenances used
under this Franchise shall be operated and maintained in accordance with applicable
local, state and federal laws, rules and regulations. Grantee is responsible for the
compliance of its Members and drivers, whether employees, lease drivers, or otherwise,
with all such laws, ordinances, rules and regulations.
(1) The number of taxicabs, the manner and time of taxicab operations,
the transportation service provided, and the rates or fares charged, shall at all times
conform to such rules and regulations as may from time to time be fixed or prescribed by
the City.
(b) Supervision. Grantee shall provide 24-hour road and office supervision.
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(c) Discounted Fare Reimbursement. Grantee shall reimburse its drivers the
amount of the discount on any reduced taxicab fares that may be required to be provided
to seniors and passengers with disabilities, as set by resolution of Council.
(d) Complaint Resolution Procedure. Grantee shall establish a procedure,
subject to City approval, for the review and resolution of complaints from the public and
violations of company rules and Taxicab Rules by Grantee’s officers, Members,
employees, and drivers. Grantee shall maintain a monthly summary of the number of
public complaints received.
(e) Management Personnel Information. Grantee shall provide to City, and
keep current, a list of the following:
(1) The Board of Directors and officers;
(2) All Members, by class of membership and the number of shares held
by each Member;
(3) All management and administrative personnel and their job titles;
and
(4) All lease and employee drivers.
(f) Management Personnel. Grantee shall have full-time management, subject
to City approval, which approval shall not be unreasonably withheld, to direct activities of
the organization. City may review management credentials and background experience
of management personnel, including a criminal history and fingerprint check.
Responsibilities include, but are not limited to, establishing, maintaining and reporting the
taxicab operations and records; collecting and paying applicable fees; conducting day to
day activities, including but not limited to managing and operating the taxicab fleet;
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representing Grantee in disputes and discussions between regulatory agencies and
Grantee, its drivers and Members; and adhering to Grantee’s Management/Business
Plan. Management is not precluded from membership or ownership in Grantee.
(g) Grantee shall conduct itself in a professional manner at all times and resolve
all disputes with other franchisees taxicab companies, the business community, and the
general public, with a goal of maintaining a favorable public image for the taxicab industry
and the City.
(h) Management/Business Plan (“Plan”). Grantee shall provide to the City an
updated management plan annually on April 20th of each year, with a summary of all
changes. The Plan shall establish Grantee’s approach and methods to be used in
meeting the requirements of this Franchise, the Santa Monica Municipal Code, the
Taxicab Rules, and City, state and federal law, rules and regulations. The Plan will be
used as the basis for evaluating Grantee’s capability to provide taxicab services in
accordance with the service demands of the public and City standards, and in compliance
with applicable laws and regulations. Any specific sub-items and components under each
Plan category will be supplied by City, as may be amended from time to time. Minimum
categories to be addressed in the Plan include:
(1) Grantee Organizational Structure and Procedures;
(2) Management/Administrative Structure and Procedures;
(3) Financial Status and Related Information;
(4) Dispatch, Hailing, and Communications - Description of Facilities,
Personnel and Technology;
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(5) Taxicab rate programs, including flat, promotional or seasonal
programs, and event and corporate programs. Grantee must provide the City with
advance notice of any changes to taxicab rate programs;
(6) Operating Location(s), Storage/Parking of Vehicles, Maintenance
and Inspection - Description of Facilities and Personnel;
(7) Programs and Activities for Driver Training, Testing, Supervision and
Social Benefits;
(8) Vehicle Maintenance and Inspection;
(9) Procedures for Maintaining Service Levels, Programs for Addressing
Service Deficiencies;
(10) Service/Operation Procedures for Discipline, Driver Evaluation,
Complaint Processing and Accident/Safety Control;
(11) Special Programs, Agreements and Services;
(12) Record Keeping; and
(13) Grantee’s Plan Evaluation & Response to Changes or Additions.
(i) Grantee shall comply with its Plan at all times. City may review Grantee’s
adherence to the Plan at any time as deemed necessary by City. Grantee shall reimburse
overcharges to its customers.
(j) Passenger Property. Grantee, and its officers, Members, employees, and
drivers, may not charge a customer to return his or her property and must at a minimum
make the property available for the customer to retrieve his or her property from the
Grantee’s main office location.
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(k) Trip Data. Grantee shall maintain collect and submit trip data in accordance
with the Taxicab Rules, and this Franchise, and Government Code section 53075.52.
SECTION 7. OPERATIONS AND SERVICE – TAXICABS
(a) Taxicab Vehicle Permits. Grantee is responsible for paying the annual
taxicab vehicle permit fee for all taxicabs in its fleet, in accordance with the fee specified
by resolution of Council, as of the effective date of this Franchise may be amended from
time to time. Taxicab vehicle permits expire each December 31st thereafter, and Grantee
is responsible for paying the annual taxicab vehicle permit fees and obtaining annual
taxicab vehicle permits for all taxicabs in its fleet in accordance with Santa Monica
Municipal Code Section 6.49.040(i)(2) 6.49.060.
(b) Taxicab Operations. All taxicabs used by Grantee within the City must be
operated in accordance with, and Grantee shall not permit any taxicab to be driven which
is in violation of, this Franchise, the Santa Monica Municipal Code, the California Vehicle
Code, Taxicab Rules, and any other applicable law or regulation.
(c) Registration and Acquisition of Vehicles. All taxicabs operated under this
Franchise must be registered to either Grantee or a Member of Grantee. Taxicabs must
either be owned by Grantee, a Member, a commercial lending agency, or leased from a
licensed leasing agency whose primary business is the sale or leasing of vehicles. Any
taxicab utilized by Grantee which is owned by it or one of its Members shall have been
acquired by way of bona fide purchase, lease, or other transaction approved by the City.
Grantee or Member shall submit to City, upon request, the method utilized for vehicle
acquisition. Members may sell or transfer a share or taxicab under these same provisions.
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(d) General Vehicle Maintenance and Repairs. Grantee shall maintain its
taxicabs in a safe operating condition, in compliance with the Vehicle Code, subject to
annual inspection by the City, at a facility that is certified by the National Institute for
Automotive Service Excellence or a facility registered with the California Bureau of
Automotive Repair. Grantee shall, at its sole expense, monitor and be responsible for all
maintenance, repair, and replacement of Grantee’s and any driver/manager Mem ber’s
managed taxicabs. Preventative maintenance must be performed at least in accordance
with manufacture recommendations for each taxicab or by an Automotive Repair Dealer
(ARD) licensed by the California Bureau of Automotive Repair. Grantee shall have i n
place and continuously keep up to date all inspection, preventative maintenance,
maintenance repair, and any other vehicle service records for each taxicab, filed by
taxicab. A copy of maintenance inspection reports, including any repair documentation,
shall be maintained by Grantee. Vehicles must be kept clean and in good repair as
defined in the Taxicab Rules.
(e) Age of Vehicles. No taxicab fleet vehicle authorized by operating pursuant
to this Franchise shall be in excess of the years of age set forth in the Taxicab Rules
unless otherwise authorized in writing by City in its sole and absolute discretion.
(f) Advertising. Grantee may display commercial advertising in or on its
taxicabs, provided that any such advertisement is in compliance with all appl icable local,
state, and federal law related to advertising.
(g) Off-Street Parking Facilities. Grantee shall provide garaging or other off-
street parking facilities within one-half mile of its main operating location(s), or as
specified by the City, where Grantee’s taxicabs are to be parked when not in service or
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when not being repaired or when not in the possession of a taxicab driver. Grantee shall
have sufficient vehicle parking capacity within the main operating location(s) or the
garaging or off-street parking facilities to meet the requirements for Grantee’s operations,
including but not limited to vehicle inspection and maintenance, administrative functions,
and training.
SECTION 8. OPERATIONS AND SERVICE – DRIVERS
(a) Authorized Drivers. Grantee shall not issue or dispatch any taxicab
operated on behalf of this Franchise to any driver who is in violation of any terms of this
Franchise, the Santa Monica Municipal Code, Taxicab Rules, or any other applicable law,
rule or regulation. Grantee shall not allow any person to operate a taxicab without a valid
and current Taxicab Driver’s Permit.
(b) Taxicab Driver’s Permits. Grantee is responsible for paying the annual
taxicab driver’s permit fee for all its taxicab drivers, in accordance with the fee specified
by resolution of Council, as of the effective date of this Franchise may be amended from
time to time. Grantee is responsible for paying the taxicab driver’s permit fees and
obtaining taxicab driver’s permits for all its taxicab drivers in accordance with Santa
Monica Municipal Code Sections 6.49.070(e) 6.49.050 and 6.49.060.
(c) Work Shifts. Drivers must check in with Grantee at the beginning and end
of each shift, and such activity shall be recorded by Grantee. Grantee must maintain daily
logs to indicate the vehicle and driver assignments for each shift at all times. Grantee or
a driver/manager Member shall make all such assignments. Grantee shall issue and
collect waybills in the manner and within the time limits established by the Taxicab Rules.
Grantee shall review waybills upon collection to ascertain that the required information is
18
fully and accurately provided.
(d) Independent Contractor Drivers. Grantee and its driver/manager Members
are authorized to provide taxicab services through a contracting or leasing type of
operation with an independent contractor driver. No independent contractor driver may
subcontract or sublease the vehicle, or the right to operate the vehicle, to another person.
All contracting or leasing arrangements shall be evidenced in writing and subject to City
approval. Such lease contract shall provide for the collection and documentation of lease
fees by Grantee and driver/manager Members. The lease contract shall not be instituted
or changed without City approval. The independent contractor driver shall not use a
taxicab as the driver’s personal vehicle within the City except when driving to or from the
beginning or ending of a work shift. Grantee shall maintain current files of all lease
contracts in a central location, filed by driver, to verify compliance with these
requirements.
(e) Training Program. Grantee shall provide a comprehensive screening,
testing and training program for all its drivers, including independent contractor drivers.
The training program, including curriculum and delivery, must be approved by City and
must include City and state rules and regulations; geography, including map reading
and/or GPS navigation, major points of interest in the City, and familiarity with the City
and surrounding areas; driver safety and defensive driving; vehicle safety and
maintenance/inspection checks; customer service and relations; sensitivity guidelines for
disabled, frail and elderly passengers; behind the wheel driver training; disabled access
education on compliance with the federal Americans with Disabilities Act (42 U.S.C. Sec.
12010 et seq.) and State disability rights laws; and accessible vehicle operation training
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and CPR certification or equivalent for accessible vehicle drivers. City may authorize or
require additional training program components, a change in delivery of program
components, or a training facilitator or program outside of Grantee’s program at Grantee’s
or driver’s cost if City deems such change will best serve the public interest.
(f) Drug and Alcohol Testing. Grantee must have in place a drug and alcohol
program that meets the requirements of California Government Code Section 53075.5
and the United States Department of Transportation, Prevention of Prohibited Drug Use
in Transit Operations (49 CFR 653), Prevention of Alcohol Misuse in Transit Operations
(49 CFR 654), and Procedures for Transportation Workplace Drug and Alcohol Testing
Programs (49 CFR 40), and maintain compliance with these provisions. A copy of this
program must be provided to the City. Modifications to the program must be provided to
the City in advance of taking effect, or if not practicable, within 5 business days. Testing
shall be conducted as a condition for initial driver permit authorization. Annual testing
shall be conducted as a condition of the permit and renewal of the permit. Random testing
may be conducted and additional tests may be required, including post accident testing,
rehabilitation and return-to-service testing, and reasonable suspicion testing. Drivers
must show a valid California driver’s license at the time and place of testing.
Grantee shall contract with a consultant (program administrator) and authorized
lab approved under the Federal Register to facilitate the program and shall provide a copy
of the contracts to City. In the case of self-employed independent drivers, information
shall be supplied directly to the City pertaining to test results. In all other cases, test
results shall be reported directly to the Grantee who shall notify the City of positive test
results, which notice shall include driver name, identifying information, and driver permit
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status, including any entry into a rehabilitation program. Specific driver test results shall
remain confidential, on file by driver with Grantee, but testing information, including date
of annual test and random test, and positive or negative results, shall be available for the
City’s review. Cost of testing shall be the driver’s responsibility, if the driver is an
independent contractor of Grantee, or Grantee’s responsibility, if the driver is an
employee.
In accordance with the Federal Code of Regulations, Grantee’s certification
program must include information regarding the controlled substance and alcohol use
policy and procedures as well as educa tional materials made available to all drivers and
other pertinent staff. Grantee or its authorized agency must advise drivers of the
resources available to them to resolve problems associated with misuse of alcohol and
controlled substances. Materials for education and company policies must be made
available to all current and potential drivers and a signed statement of their receipt shall
be in every permitted driver’s file and retained by Grantee.
Grantee shall train supervisory personnel in accordance with federal guidelines in
order to determine whether reasonable suspicion exists to require a driver to undergo
additional testing. Grantee shall use custody and control forms similar to that used under
the federal testing guidelines. Any changes in the f ederal program guidelines or other
state mandates will be considered by City for modification to Grantee’s program.
(g) Pull Program. Grantee shall enroll all permitted drivers in the DMV Pull
Notice Program and shall review and maintain such records for all drivers for compliance
with all requirements of the Santa Monica Municipal Code, Taxicab Rules, this Franchise,
and Grantee’s policies at least annually and as additional updates are received. Grantee
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shall file such records, by driver, in a central location. Grantee shall notify the City if a
driver’s record or ability to operate a taxicab fails to meet the Taxicab Driver’s Permit
requirements in accordance with the reporting requirements of this Franchise and the
Taxicab Rules.
(h) Social Benefits Programs. Grantee shall comply with all applicable local,
state and federal law, rules, and regulations and statutes concerning mandated social
benefits programs for employees. It shall be the sole responsibility of Grantee to
determine whether legislation concerning these social benefits applies to Grantee's
operations.
SECTION 9. OPERATIONS AND SERVICE – DISPATCH, COMMUNICATION
AND SERVICE REPORTING.
(a) Radio Frequencies. Grantee shall have authorized usage of an FCC-
assigned radio frequency(s) and shall maintain the capability of two-way voice radio
communication in working order in each taxicab operating within the City under the
authorized frequency(s). Grantees operating within the same areas of the City must use
separate frequencies within the same areas. Grantee shall notify the City in writing of
such frequency(s) to be used in all areas of the City.
(b) Trip Data. Grantee shall implement and maintain a computer dispatch
system capable of digital data communication and geographically identifying each service
call. The computer dispatch record keeping system must also be capable of determining
who is driving a particular taxicab at any time. Grantee shall record and store service data
using computer dispatch time stamping for each request for service received and include
time request was received, time of order reservation, time of order acceptance by driver,
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time of arrival at service location, time of taximeter activation, time of taximeter
deactivation, and length of trip in miles in accordance with the Taxicab Rules.
Grantee shall provide total telephonic or other equivalent service order data to the
City monthly, within the first week of the following month in which data was collected, in
a transfer and data format as prescribed by the City. This requirement does not preclude
City personnel from reviewing Grantee’s dispatch records via a modem or equivalent
connection, or an online interface, and browsing or retrieving information.
Grantee shall also supply summary monthly data reports from telephonic or oth er
equivalent service calls as prescribed by the City, and as may be changed from time to
time by the City, with minimum reporting requirements required at the beginning of this
Franchise to include service response data summaries by the following categori es:
service area; vehicle; wheelchair accessible vehicle; and wheelchair accessible vehicle,
for wheelchair accessible requested trips, aggregated for all vehicles in service. Each of
the foregoing categories will include the total number of trips separate d into response
categories, including response time up to 15 minutes, between 16 and 30 minutes,
between 31 and 60 minutes, greater than 60 minutes, and no show or no load.
The City may require that trips completed through requests from outside contracts
or agreements be reported separately.
Response time is defined as the period of time from dispatch of the fare (when the
trip is first offered or designated by dispatcher) to activation of the taximeter as denoted
in the dispatch record. Arrival time may be used in lieu of taximeter activation if the taxicab
is equipped with an automatic vehicle location system that can identify and verify in the
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dispatch record that the vehicle was within one -quarter (1/4) mile of the arrival target, or
as otherwise defined, established and authorized by the City.
(c) Telephonic Service Order Response Data. Grantee shall provide a
computerized method or telephone company switching program to obtain information
pertaining to telephonic or other equivalent order response. The sys tem must be capable
of identifying and storing information pertaining to each call received, including the length
of time required to answer the call and the length of time each call was placed on hold, if
at all.
Grantee shall provide total telephonic or other equivalent service order response
data to the City monthly, within the first week of the following month in which data was
collected, in a transfer and data format as prescribed by the City.
Grantee shall also supply summary monthly data reports aggregated from total
telephonic or other equivalent service order response data, as prescribed by the City, with
minimum reporting requirements required at the beginning of the Franchise to include:
(1) Total number of telephonic or other equivalent service calls received;
(2) Total number of telephonic or other equivalent service calls
answered in more than 45 seconds; and
(3) Total number of telephonic or other equivalent service calls placed
on hold longer than two minutes during any period of the reservation process.
(d) Statistical Operating Data. Grantee shall provide summary statistical
operating data to the City monthly in written form pertaining to all taxicabs and types of
service requests provided within the City. Summary data shall include at minimum the
total number of all trips provided, total miles driven, total paid miles driven, total gross
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revenue received, total shifts assigned, and total number of telephonic or other equivalent
service orders received. The City may in its discretion direct Grantee to supply additional
information.
SECTION 10. INSPECTION OF PROPERTY AND RECORDS.
(a) At all reasonable times at the City’s request, Grantee shall permit any
authorized officer, employee or agent of the City to inspect all property of Grantee, and
to examine and transcribe any and all books, accounts, papers, maps, and other records
kept or maintained by Grantee with respect to Grantee’s operations, affairs, transactions,
property or financial condition. If any of the books, accounts, papers, maps, or other
records referenced in this Section are kept outside the City and the City determines that
an examination of such materials is necessary or appropriate, then all travel and
maintenance expenses necessarily incurred in making such examination shall be paid by
Grantee.
(b) Grantee shall prepare and furnish to the City, at all times and in the form
prescribed by the City, such data with respect to Grantee’s operations, affairs,
transactions, property or financial condition as may be reasonably necessary or
appropriate. Requested data may include but is not limited to: membership, lease driver,
and employee records; waybills; maintenance records; financial records and statements;
loan agreements; insurance policies; taxicab fleet schedules; dispatch records and
passenger trip data, including GPS and data from smartphone applications; complaint
records; advertising and promotion records; vehicle acquisition, loan, registration, and
maintenance records; affirmative action records; and contracts.
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(c) Failure to comply with any City request for any information may in the City’s
sole and absolute discretion result in temporary suspension of Grantee’s operations.
(d) All records shall be maintained in accordance with generally accepted
accounting principles and clearly identified and readi ly accessible. Representatives of
the City or its designees shall be allowed free access to Grantee’s books and records,
and have the rights to examine, audit and make transcripts therefrom as necessary, and
inspect all work, data, documents, proceedings and activities related to this Franchise.
(e) Grantee shall provide the City with an address of an office or terminal where
the property and records pertaining to all matters addressed in this Franchise may be
inspected by the City at all reasonable times.
SECTION 11. INSURANCE REQUIREMENTS
(a) In accordance with the requirements of the Santa Monica Municipal Code
and Taxicab Rules, Grantee shall procure and at all times maintain an insurance policy
covering all vehicles operating under this Franchise. Insurance premiums must be paid
in advance for a minimum six-month period. Any vehicle operating without the required
coverage shall be considered under suspension, regardless of whether the City is aware
of the lack of coverage.
(b) Grantee shall obtain comprehensive general liability insurance, to include
contractual liability, in such amounts as the City’s Risk Manager may from time to time
require, insuring against any claims arising out of the activities of Grantee and its
Members, employees and drivers.
(c) Grantee shall file evidence of insurance with the City, along with proof of
payment of the minimum six-month premium, in such form as required by and subject to
26
the approval of the City’s Risk Manager, prior to the commencement of operations under
this Franchise. Grantee shall maintain such evidence on file with the City throughout the
term of this Franchise.
(d) Grantee’s failure to procure and maintain the required insurance shall
constitute a material breach of contract under which the City may immediately s uspend
or revoke and terminate this Franchise. Monetary penalties may also be assessed.
(e) Grantee shall submit to the City a quarterly summary of all taxicab accidents
including date of accident, driver name and identifying information, and vehicle number.
The City may direct Grantee to supply additional information or specify a form for such
reporting.
SECTION 12. INDEMNIFICATION, DEFENSE, HOLD HARMLESS. Except for
the sole and active negligence or willful misconduct of the City, Grantee agrees to defend,
indemnify and hold harmless City (including but not limited to the City’s departments,
members of its Council, boards and commissions, officials, officers, agents, employees,
volunteers, assigns, and successors in interest) from and against all suits and causes of
action, claims, losses, demands and expenses, including but not limited to: attorney’s
fees and cost of litigation; damage or liability of any nature whatsoever; death or injury to
any person, including Grantee and any of Grantee’s Members, employees and age nts; or
damage or destruction of any property of either party hereto or of third parties, arising in
any manner by reason of, or incident to, the performance of this Franchise on the part of
Grantee or subcontractor of any tier.
Grantee shall give the City prompt and timely written notice of any claim made or
suit instituted coming to Grantee’s knowledge which may in any way directly or indirectly,
27
contingently or otherwise, affect either party, and both shall have the right to participate
in the defense of same to the extent of its own interest. Approval of insurance policies by
the City shall in no way affect or change the terms and conditions of this indemnity
agreement.
SECTION 13. NONDISCRIMINATION. Grantee shall not discriminate in its
membership or employment practices against any Member or employee or applicant for
membership or employment, and shall not discriminate in providing taxicab services
under this Franchise, because of race, color, religion, national origin, ancestry, sex, age,
sexual orientation, gender, gender identity, gender expression, military or veteran status,
marital status, genetic information, medical condition, HIV/AIDS or disability, and shall
comply with the requirements of City, state and federal law, rules and regulations.
SECTION 14. WAIVER. A waiver by City of any breach of any term, covenant, or
condition contained in this Franchise shall not be deemed to be a waiver of any
subsequent breach of the same or any other term, covenant, or condition contained in
Franchise.
SECTION 15. MONETARY PENALTIES FOR VIOLATIONS OF FRANCHISE
ORDINANCE TERMS AND CONDITIONS. The City may levy a monetary penalty on
Grantee for failure to abide by the terms and conditions of this Franchise, as an alternative
to, or in addition to, suspension or revocation of this Franchise. Any of the following
activities constitute a violation of the terms and conditions of this Franchise and may
subject Grantee to a monetary penalty. The City’s monetary assessment for a second,
28
third and subsequent offense, as noted in the schedule herein , may be applied to any
combination of offenses.
(a) Failure to submit to the City any requested or required information as
specified in this Ordinance.
(b) Fraudulent reporting to the City of any requested or required information,
including any tampering of files, data, or reports necessary to provide the required
information.
(c) Operation of unlicensed or unauthorized vehicles as taxicabs in the City,
including but not limited to the operation of previously approved taxicabs with suspended,
canceled or revoked vehicle permits and the use of vehicles licensed as taxicabs only in
other jurisdictions.
(d) Conducting any illegal or unauthorized type of public transportation
operation.
(e) Unauthorized sale, lease, assignment, hypothecation, or other disposition
of this Franchise.
(f) Falsification of or failure to inform membership/share ownership changes.
(g) Operation of a taxicab without approved insurance on file with the City.
(h) Failure to timely submit required taxicab insurance documents to the City.
(i) Failure to provide taxicab preventative maintenance service.
(j) Failure to provide drivers, Members or personnel with training as specified
in this Ordinance or as detailed in Grantee’s Plan.
(k) Failure to adhere to the policies and procedures in Grantee’s Plan.
(l) Failure to provide City personnel access to Grantee’s property and records.
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The City may levy the following schedule of monetary penalties for these violations
against Grantee:
(a) Up to $10,000 for the first offense.
(b) Up to $25,000 for the second offense within a 12 -month period.
(c) Up to a maximum of $50,000 for third and subsequent offenses within
subsequent 12-month periods.
Monetary penalties that may be imposed are pursuant to the foregoing schedule
adopted pursuant to and are subject to the hearing procedure specified in Santa Monica
Municipal Code Section 6.49.150 6.49.170, as may be amended from time to time
SECTION 16. REQUIREMENTS OF A CO-OPERATIVE, ASSOCIATION OR
MEMBERSHIP ORGANIZATION. If Grantee is a membership organization, the following
restrictions apply:
(a) The number of Members and shares shall each be limited to the total
number of taxicabs authorized for Grantee under this Franchise. Joint Memberships are
prohibited.
(b) Members shall be limited to owning a maximum of 5% of the total taxicabs
and shares authorized for Grantee with the maximum figure determined by rounding the
number of vehicles and shares equivalent to 5% of the fleet to the nearest whole number.
(c) An Investor/Shareholder Member shall not drive, control or manage any
taxicab in Grantee. All taxicabs owned by an Investor/Shareholder shall be controlled
and managed completely by Grantee, on the Investor/Shareholder’s behalf, pursuant to
a City-approved contract, between the Investor/Shareholder and Grantee. The
30
Investor/Shareholder shall have no control over or perform any function for a taxicab
under the control of Grantee other than being the registered owner of the taxicab.
(d) A Driver/Manager Member may not control or manage more than 3 taxicabs
in Grantee. All taxicabs owned by a Driver/Manager in exc ess of 3 and any others that
the Member does not control or manage shall be classified as Investor/Shareholder
memberships and shall be controlled and managed completely by Grantee, on the
Member’s behalf, pursuant to a City-approved contract, between the Member and
Grantee. Grantee shall ensure that all Driver/Manager Members comply with all City laws,
rules and regulations and this Ordinance relating to the number of vehicles managed.
(e) Members must qualify for a Taxicab Vehicle Permit under the curren t
standards established by the City.
(f) If any Taxicab Vehicle Permit is revoked, any Driver/Manager Member who
was the cause of such revocation or cancellation will be subject to revocation or
cancellation of his or her Taxicab Driver’s Permit and will b e precluded from operating a
taxicab or exercising any other rights granted by such Taxicab Driver’s Permit. Any
Driver/Manager Member whose Taxicab Driver’s Permit is revoked or canceled must
convert all Driver/Manager memberships into Investor/Shareholde r memberships or
transfer membership and any other taxicabs owned by the Member shall be operated,
controlled and managed by Grantee on the Member’s behalf, pursuant to a City -approved
contract, between the Member and Grantee.
(g) Grantee shall ensure that each Driver/Manager Member is aware of and
complies with any requirement of the City regarding the filing of an annual profit and loss
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statement. Grantee shall submit the required statistical information quarterly or as
directed by the City.
(h) Grantee shall require all Members to enter into a security agreement,
subject to City approval, as a condition of membership in Grantee. By such agreement,
the Member grants to Grantee a security interest in the Member's taxicabs to ensure the
Member's compliance with his or her obligations as a Member.
(i) Grantee shall establish a procedure for the approval, transfer, and sale of
memberships and a procedure for dismissal of Members. Grantee shall provide
information to each Member pertaining to the Member’s role in the organization, the City
and the taxicab industry, basic record keeping and reporting requirements, the City’s rules
and regulations, and any other information required by the City.
(j) All agreements, including any security or membership agreem ents, and all
contracts, including those under which the co-operative operates vehicles on behalf of its
Members, that affect the method by which taxicabs are operated or service is provided,
shall be subject to review and approval by the City.
(k) Grantee shall obtain vehicle liability insurance for all vehicles in the taxicab
fleet; contract with lease drivers for all vehicles in the taxicab fleet; provide maintenance
for all vehicles in the taxicab fleet; provide a computer dispatch service; collect and
maintain all records, including waybills, trip data, pertinent to its taxicab operations; collect
vehicle lease fees for vehicles in the taxicab fleet; notify Driver/Manager Members and
drivers of violations and hearings; and make all vehicle and driver as signments for all
vehicles it controls on behalf of Members.
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SECTION 17. Any provision of the Santa Monica Municipal Code or appendices
thereto inconsistent with the provisions of this Ordinance, to the extent of such
inconsistencies and no further, is hereby repealed or modified to that extent necessary to
effect the provisions of this Ordinance.
SECTION 18. If any section, subsection, sentence, clause, or phrase of this
Ordinance is for any reason held to be invalid or unconstitutional by a decision of any
court of competent jurisdiction, such decision shall not affect the validity of the remaining
portions of this Ordinance. The City Council hereby declares that it would have passed
this Ordinance and each and every section, subsection, sentence, clause, or phrase not
declared invalid or unconstitutional without regard to whether any portion of the ordinance
would be subsequently declared invalid or unconstitutional.
SECTION 19. The Mayor shall sign and the City Clerk shall attest to the passage
of this Ordinance. The City Clerk shall cause the same to be published once in the official
newspaper within 15 days after its adoption. This Ordinance shall become effective 30
days from its adoption.
APPROVED AS TO FORM:
_________________________
LANE DILG
City Attorney
City Council
Report
City Council Regular Meeting: November 10, 2015
Agenda Item: 7.E
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To: Mayor and City Council
From: David Martin, Director, Planning and Community Development , Planning and
Community Development
Subject: Introduction for First Reading of Ordinances Amending Chapters 6.48, 6.49,
and 6.50 of the Santa Monica Municipal Code Modifying Provisions of the
Vehicle for Hire Regulations, Taxicab Franchise Regulations, and Definition of
Pedicab; Ordinances Extending the Taxicab Franchises of Bell Cab,
Independent Taxicab Owners Association, Metro Cab, Taxi! Taxi!, and Yellow
Cab; Adopt a Resolution Establishing Taxicab Franchise Fees, Permit fees,
and Taximeter Rates; and, Direct Staff to Research Options that Would
Consider Changes to the Taxicab Franchise Program that Would Make
Companies More Accountable to Market Forces Rather than City
Regulations.
Recommended Action
Staff recommends that the City Council:
1) Introduce for first reading the attached ordinance amending Chapters 6.48, 6.49,
and 6.50 of the Santa Monica Municipal Code modifying provisions of the
vehicle for hire regulations, taxicab franchise regulations, and definition of
pedicab (Attachment K);
2) Introduce for first reading the attached ordinances modifying and extending the
taxicab franchises of Bell Cab, Independent Taxicab Owners Association, Metro
Cab, Taxi! Taxi!, and Yellow Cab (Attachments L, M, N, O, P);
3) Adopt the attached resolution modifying taxicab franchise fees, permit fees, and
taximeter rates (Attachment S); and
4) Direct staff to research options for changes to the taxicab franchise program that
would make companies more accountable to market forces rather than City
regulations.
Executive Summary
On March 1, 2011, the City implemented a new taxicab franchise system in response to
concerns with the open licensing system. The current franchises expire on December
31, 2015. Due to the disruptive nature of Transportations Network Companies (TNCs)
on the vehicle for hire market, staff is recommending changes to regulations to assist
with competing with TNCs, a reallocation of taxicab vehicles to more accurately
represent the needs, impacts, and service delivery, and extension of the five existing
franchise agreements for two years. Staff is also recommending clarifying the definition
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of vehicle for hire operations that operate solely in Santa Monica and adding minimum
insurance requirements on all non-taxi vehicle for hire operations; and clarification of the
definition of pedicabs to include motorized pedicabs.
Background
Based on the recommendations of a 2008 study by Nelson \Nygaard Consulting
Associates (see Attachment A) of taxicab operations in Santa Monica, on July 28, 2009,
Council adopted an ordinance establishing a franchise-based system for the regulation
of taxicabs (see Attachment B), which required the program to be self-supporting
through franchise, vehicle permit, and driver permit fees. In compliance with the
ordinance requirements, a Request for Proposals (RFP) for citywide taxicab franchises
was issued on January 14, 2010.
On November 23, 2010, the Council awarded franchises by ordinance to Bell Cab
Company, Inc. (Bell Cab); Independent Taxi Owners’ Association (ITOA); Metro Cab
Company, LLC (Metro Cab); TMAT Corp., dba Taxi! Taxi! (Taxi! Taxi!); and L.A. Taxi
Cooperative, Inc., dba Yellow Cab Company (Yellow Cab) (see Attachment C). The
ordinances established the terms and conditions of the franchise for each company,
which set the effective date for the franchise for January 1, 2011. The terms and
conditions were subsequently agreed to by each company. On January 11, 2011, an d
October 11, 2011, Council adopted amendments to the terms and conditions to
increase the fleet size for each franchisee and to adjust the permit year from a fiscal
year to a calendar year (see Attachments D and E respectively). On May 22, 2012,
Council transferred the taxicab franchise of Metro Cab Company, LLC to All Yellow Taxi
dba Metro Cab (Metro Cab) (see Attachment F).
In preparation for the expiration of the Taxicab Franchise agreements on December 31,
2015, staff held a study session with Council at its March 17, 2015 meeting on the
taxicab franchise and the impact of Transportations Network Companies (TNCs), such
as Uber and Lyft, on the transportation market (see Attachment G). Council directed
staff to review changes to the regulatory program to assist taxicab companies in light of
the arrival of TNCs.
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Discussion
Due to the disruptive nature of TNCs on the vehicle for hire market, staff is
recommending changes, as outlined in this report, to the taxicab franchise program.
Staff is also recommending that the franchises for all five companies be extended for
two years with some modifications. The two year agreement will allow for an
incremental approach to changes to a highly volatile market and will allow more time to
evaluate the impacts of the arrival of Expo in 2016.
Staff is also recommending that:
1. Minimum insurance requirements be established for vehicles for hire that operate
solely within Santa Monica and that are not regulated by the State of California,
and
2. A minor clarification be made to the pedicab definition to include pedicabs with
small motors, similar to a motorized bicycle.
Taxicabs - Outreach
In preparation for the March 17, 2015 study session, staff met jointly with all five taxicab
franchisees on January 8, 2015. All five companies where encouraged to provide their
recommendations to regulatory changes to assist with competing with TNCs. Four of
the existing franchisees, Bell Cab Company, Inc., Independent Taxi Owners’
Association, Metro Cab Company, LLC, and L.A. Taxi Cooperative, Inc., dba Yellow
Cab Company (“Taxicab Coalition”)1 submitted a joint letter with detailed
recommendations on both regulations and vehicles for staff and Council to consider
(see Attachment C of Attachment G of this report). Taxi! Taxi! submitted its own letter
with its recommendations on vehicles (see Attachment D of Attachment G of this
report). During the study session, Council directed staff to consider options for reducing
taxicab regulations to assist companies with competing with TNCs and to consider if
regulations were necessary for in-city vehicles for hire.
1 . For simplicity, these four companies will be jointly referred to as the “Taxicab Coalition” in this report.
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On August 17, 2015 staff sent letters to each franchisee outlining a draft summary of the
proposed changes to the current taxicab regulatory scheme (see Attachment H ).
Franchisees were encouraged to schedule individual meetings with staff to discuss the
proposals. The primary area of concern with the draft proposal expressed by each
taxicab company in these meetings was the proposed reduction of taxicabs from 300 to
182, and the subsequent allocation of those vehicles between the five companies. The
Taxicab Coalition argued for more taxicabs and Taxi! Taxi! recommended fewer taxicab
vehicles and fewer franchisees. The taxicab companies were asked to submit written
responses to the draft recommendations. As before, the Taxicab Coalition submitted a
letter for its four members (see Attachment I) and Taxi! Taxi! submitted a letter on its
own to staff and to Mayor Kevin McKeown with a petition from drivers (see Attachm ent
J). The companies outlined their positions on the total number of vehicles that should
be authorized and why. With the outline of staff’s recommendations below, alternatives
are presented based on the recommendations offered by the Taxicab Coalition and
Taxi! Taxi! for Council’s consideration.
Taxicabs - Long Beach Taxicab Regulatory Changes
The Long Beach City Council recently adopted new regulations in response to a request
from Yellow Cab Long Beach (now Yellow Long Beach) to address the compe titive
pressures of TNCs. Long Beach is also currently served by only one taxicab company
(i.e. Yellow Cab). According to a May 13, 2015 Los Angeles Times article, Long Beach
Mayor Robert Garcia said that the new regulations to help taxis stay competitive was
not a knock on TNCs, but a way to protect a "community partner" that provides a
service for tourists, the elderly and the disabled.
The city removed price floors on rates (which allows Yellow Cab to offer lower rates and
coupons) and approved the addition of 24 new taxis to the fleet, bringing the total to
199, even though there was a reported decline of approximately 15% in business with
the 175 taxis already licensed. Long Beach also approved new rebranding for Yellow
Cab with a new name Yellow Long Beach, a new logo, and a mobile app called Ride
Yellow, which appears to be a rebranded version of their app called Curb, which was
formerly called TaxiMagic.
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The company claims that the lower rates would increase the demand, however this
would not directly assist drivers, unless the company absorbed the cost of the discount.
The addition of more taxicabs provides for an opportunity for the company to lease
more vehicles regardless of whether or not taxicab drivers have access to more
customers.
Taxicabs - Proposed Amendments
The staff recommendations for taxicabs are outlined later in two sections of this report:
Regulations - Rules and procedures for how the program is implemented.
Vehicles - The total number of vehicles authorized to operate and the allocation
of those vehicles
Franchise and Permit Fees
Taximeter Rates
The recommended changes to the regulations are based mostly on the specific
recommendations made in a January 27, 2015 letter jointly signed by the “Taxicab
Coalition”.
In addition to minor administrative changes to the taxicab programs rules and
regulations, such as minor changes to address technological changes in the
marketplace, staff proposes the following material changes to the program. These
changes are governed by Chapter 6.49 of the Santa Monica Municipal Code (SMMC),
the Taxicab Franchise Agreement, and the Taxicab Rules.
The draft ordinance amending Chapter 6.49 of the SMMC is included as Attachment K
and the draft ordinances extending the franchises are attached as follows:
Bell Cab Company, Inc. - Attachment L
Independent Taxi Owners’ Association - Attachment M
All Yellow Taxi (dba Metro Cab) - Attachment N
TMAT Corp., dba Taxi! Taxi! - Attachment O
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L.A. Taxi Cooperative, Inc (dba Yellow Cab) - Attachment P
Because of the rapidly changing vehicle for hire market in California, staff is proposing
an incremental approach, instead of a full revamping of the program, to assist taxicab
companies in competing with TNCs while still advancing the City’s priorities.
Staff is recommending that the franchises of all five taxicab companies be extended for
two years to allow for consideration of further changes in the near future to the program
as the market adapts, as well as to allow time for impacts to the local Santa Monica
vehicle for hire market from the arrival of Expo. This recommendation is not based on
the performance of the companies. Instead staff is recommending that this decision be
delayed for two years. The expiration date of the two year franchise agreements would
be midnight December 31, 2017. This date is also consistent with when the City of Los
Angeles franchise agreements expire.
Regulations
Following are regulatory changes to the program proposed by staff. The taxicab
companies have not expressed any significant disagreement with these proposals
which are in in most cases based on the recommendations from the taxicab companies.
Later in this report, under the section of vehicles, staff outlines recommendations for the
total number of vehicles to be awarded and how these vehicles should be allocated
among the five franchisees.
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Proposed Regulatory Change Governed By
SMMC Franchise
Agreement
Rules
1 Establish two types of vehicle permits: Full Time
Permit and a Part Time Permit. A full time vehicle
permit allows a company to dedicate the vehicle to
Santa Monica. The full time vehicle may not be
permitted to also operate in the City of Los Angeles;
however, full time vehicles may be permitted in other
jurisdictions with approval. A part time vehicle
permit requires the vehicle to also be permitted by
the City of Los Angeles. A Part Time vehicle counts
as 50% of a vehicle when calculating Full Time
Equivalency (this is discussed further in the Vehicle
section below).
x X
2 Vehicle Flexibility - Allow each of the franchises to
remove from service vehicles based on demand.
This would allow companies to suspend auto
insurance on the vehicle while it is out of service.
This would allow them to reduce costs by not having
to pay for insurance during slower demand periods,
allowing the fleet to “ebb and flow”. The Taxicab
Coalition requested that they be allowed to remove
25% of their fleets from service. Staffs proposal
does not include a limit.
X X
3 Pricing Flexibility - Remove pricing floors. Maximum
rates would still apply. The change would allow
companies to establish promotional pricing including
flat rates, package deals with groups, employers, etc.
This proposal does not change the existing ban on
companies establishing exclusive deals with hotels.
The Taxicab Coalition requested this change. An
additional provision has been added to make it illegal
for a company to charge discounted or flat rates
other than that which has been advertised or agreed
to in advance with the passenger.
X X X
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Proposed Regulatory Change Governed By
SMMC Franchise
Agreement
Rules
4 Driver Permits - Change the permit period from one
year to a prorated permit that would expire at
midnight on December 31, 2017. The proposed
permit would be prorated so that a driver paid an
amount equal to the number of months remaining in
the franchise agreements. The Taxicab Coalition
requested a two year driver permit. Staff has no
objections to a two year permit, which is consistent
with Los Angeles, however, since the proposal is for
a two year franchise, all driver permits must expire at
the end of the franchise period, so providing a
prorated permit fee would accomplish the same goal.
Permit fees are based solely on cost recovery, so the
permit fees would be the same, with standard CPI
increases or changes based on fee studies. Drivers
pay the driver permit fees. If Council should extend
the franchises beyond two years, driver permit
expiration dates would be adjusted accordingly.
x X
5 Transfer rule making authority from the Police
Department to Planning and Community
Development (PCD). All other aspects of the
Taxicab program have been transferred to PCD,
such as permitting and enforcement. Transfer of the
rule making authority would complete this transition.
x
6 LADOT Smartphone App - Allow participation in any
Los Angeles Department of Transportation electronic
hailing Smartphone app and reciprocity program that
may be launched.
x
7 Carpooling - Clarification of “full use of taxicab” to
allow for carpooling or ride sharing types of services
by taxicabs.
x
8 Delivery of Goods – Ban taxicab companies and
drivers from providing non-passenger delivery
services (e.g. food, gods, marijuana).
x
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Other Requests
The Taxicab Coalition requested that the City waive the business license tax fees,
claiming that no other city requires a payment of franchise fees and business license tax
and that the City’s franchise fees are the highest in the region. The Taxicab Coalition
claims that the franchise fee is based on the value that the franchise brings to the
franchisee. In their letter dated September 23, 2015, the coalition states “[W]here our
business is drastically down due to the encroachment of unregulated businesses who
pay no fees to the City, the value of our franchises have dropped considerably.”
Because of the incremental approach to the changes that staff is proposing, staff does
not recommend a waiver to the business license fee of $250 per vehicle at this time. A
waiver could be considered in a future modification to the program with any franchise
fee changes.
All five companies have requested that the processing time for permits be reduced.
Most of the processing time is for background checks and driver testing. Staff will
review options for driver testing to reduce the amount of time it takes to obtain a permit
however, staff is not recommending the elimination of testing at this time. Background
checks are dependent on both the California Department of Justice to process
fingerprints and the Police Department to complete a thorough background check. It
has been requested by the taxicab industry to provide provisional permits until the
background check has been completed. Staff does not recommend any changes to the
background check requirements or the implementation of provisional driver permits at
this time.
Rules
Attached is a redline version of the rules with changes that staff expects to make
pending adoption of the attached amendments to Chapters 6.48, 4.49, and 6.50 of the
SMMC and the Taxicab Franchise Agreements (see Attachment Q).
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Vehicles
Taxicab Trips Originating in Santa Monica
Santa Monica taxicabs have experienced a 27% reduction in trips in 2014 when
compared to 2013. See Chart A below.
Chart A
2013 Trips 2014 Trips
Percent Change
Trips
2013 to 2014
Market Share
2015
Bell Cab 69,806 48,987 -30% 9%
ITOA 156,279 115,127 -26% 20%
Metro 179,289 129,139 -28% 23%
Taxi! Taxi! 277,293 197,835 -29% 35%
Yellow Cab 93,196 76,325 -18% 13%
All Taxicab Companies 775,863 567,413 -27% 100%
The industry continues to report declines in overall trips in 2015 with a 51% reduction in
the first seven months of calendar year 2015 over the first seven months of calendar
year 2013. See Chart B below.
Chart B
2013 Trips
Jan-Aug
2015 Trips
Jan-Aug
Percent Change
Trips
2013 to 2015
Jan-Aug
Market Share
2015
Jan-Aug
Bell Cab 46,381 18,315 -61% 7%
ITOA 107,030 52,910 -51% 20%
Metro 118,794 54,947 -54% 21%
Taxi! Taxi! 193,195 93,391 -52% 35%
Yellow Cab 83,203 47,542 -43% 18%
All Taxicab Companies 548,603 267,105 -51% 100%
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Since flag downs are considered by some companies to be an unreliable reflection of
the number of trips a company completes, even when excluding flag down trips, and
instead only considering dispatched trips through the companies dispa tching systems
reported by the companies, there has been a decrease in requests for service calls of
57% from January to August for 2013 to 2015. Chart C below shows a breakdown by
company of the decrease in reported dispatched trip, which also demonstrates a clear
decline in trips.
Chart C
2013
Dispatched
Trips
Jan-Aug
2015
Dispatched
Trips
Jan-Aug
Percent Change
2013 to 2015
Dispatched Trips
Jan-Aug
Market Share
2015
Jan-Aug
Bell Cab 13,813 6,832 51% 6%
ITOA 15,833 7,058 55% 6%
Metro 53,220 28,292 47% 24%
Taxi! Taxi! 135,210 65,248 52% 55%
Yellow Cab 60,432 11,274 81% 9%
All Taxicab
Companies
278,508 118,704 57% 100%
Although it is not possible to know specifically the cause of the decline, it clearly
coincides with the arrival of Transportation Network Companies (TNC); Uber officially
launched in Los Angeles on March 8, 2012. It is also unclear if other factors may be
contributing to the decline.
Determining the Number of Vehicles
The current number of vehicles authorized to operate is 300. However, the allocation of
vehicles did not take into account whether or not a vehicle serves Santa Monica on a
full time basis or on a part time basis. The 2008 Nelson/Nygaard Taxicab study
recommended 210 Full Time Equivalent vehicles, meaning that a fa ctor should be taken
into consideration in establishing the authorized number of vehicles based on whether
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or not vehicles are operating in Santa Monica on a full time basis or part time basis.
Therefore taxicab companies have full discretion to determine if a vehicle is operating in
Santa Monica on a full time or part time basis. The Taxicab Coalition has requested
that they maintain this discretion. Staff is recommending that vehicle allocations be
awarded specifically for full time or part time vehicles to ensure greater control over the
total number of vehicles that impacting local streets.
Staff is recommending that Council authorize no more than 182 full time equivalent
taxicabs based on factors outlined in Attachment R which has taken in to account the
number of full time leases, dedicated vehicles, and market share of the company. The
analysis is based on 2014 trip data, the most recent full year of data available.
Vehicle Allocation by Company
For the purpose of this discussion, Full Time Equivalency (FTE) is the amount of time a
vehicle operates in Santa Monica as compared to a full time bas is. FTE distinguishes
between vehicles that are spending 100% of their time serving Santa Monica and those
that are license in both Santa Monica as well as Los Angeles, thereby serving a much
broader market. These vehicles are present in Santa Monica far less than vehicles that
are only permitted by Santa Monica but would be authorized to operate in Santa Monica
during peak periods. For example if a taxicab company is authorized to operate 100
FTE vehicles, the taxicab company could be issued 50 full time vehicle permits and 100
part time vehicle permits for a total of 100 FTE Vehicles. The formula would be:
50 F/T vehicles + (100 P/T vehicles x 50%) = 100 Full Time Equivalent Vehicles
The use of 50% as the part time factor is used for convenience since it is difficult to
determine how much time a vehicle that is permitted in both Santa Monica and Los
Angeles actually operates in Santa Monica. Additionally, many Los Angeles permitted
vehicles are also permitted in other jurisdictions, such as Beverly Hills, West Hollywood,
Culver City, and Los Angeles County. Staff is recommending that companies continue
to have the discretion to offer 12-hour or 24-hour leases in any mix it chooses.
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The following chart outlines the proposed Full Time Equivalent vehicles and breakdown
by Full Time and Part Time permits. Column E represents the actual number of
vehicles that would be permitted to operate.
Company
(A)
Proposed
Full Time
Equivalent
Vehicles
(B)
Proposed
Full Time
Vehicle
Permits
(C)
Proposed
Part Time
Vehicle
Permits*
(D)
Actual
Proposed
Total
Vehicles
Permitted
(E)
Bell Cab 16 2 28 30
ITOA 38 32 12 44
Metro Cab 42 32 20 52
Taxi! Taxi! 62 62 0 62
Yellow Cab 24 2 44 46
Totals 182 130 104 234
*Vehicles in this category are also permitted to operate in the City of Los Angeles for
Bell Cab, ITOA, and Yellow Cab. For Metro Cab these vehicles are permitted to
operate as Access vehicles outside of Santa Monica.
Based on this proposal, the total change in the number of vehicles would be reduced by
66 or 22%. The actual change to the current allocation is minimal considering the
significant drop in vehicle trips and when compared to the original number of FTEs
recommended by Nelson/Nygaard in its 2008 study. The key change is that by
adjusting the permitting to include specific full time and part time vehicle permits, the
allocation will provide more control than the current system over how many vehicles are
dedicated to operating only in Santa Monica and is more consistent with the original
recommendations by the 2008 Nelson/Nygaard study recommendations.
The following chart provides a comparison of the change in vehicle allocation to the
current allocation:
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Company
Current
Authorized
Vehicles
Current
Full
Time
Proposed
Full Time
Current
Part
Time
Proposed
Part Time
Proposed
Total
Authorized
Vehicles
Change in
Total
Vehicles
from
Current
Allocation
to
Proposed
Allocation
Percent
Change
in Total
Vehicles
Bell Cab 58 12 2 46 28 30 -28 -48%
ITOA 58 47 32 11 12 44 -14 -24%
Metro Cab 63 43 32 20 20 52 -11 -17%
Taxi! Taxi! 63 63 62 0 0 62 -1 -2%
Yellow Cab 58 43 2 15 44 46 -12 -21%
Totals 300 208 130 92 104 234 -66 -22%
Taxicab Coalition - Vehicle Allocation Alternative Proposal
As noted earlier in this report, the taxicab companies were encouraged to provide
written responses to the proposals outlined by staff in the August 17, 2015 letter sent to
each company. The recommended allocation by the Taxicab Coalition was originally to
maintain the current level of vehicles with no changes to allocation. In response to the
August 17, 2015 letter and subsequent individual meetings with each company, the
Taxicab Coalition of four companies have proposed reducing the total number of
vehicles to 266 (32 more than staff’s proposal) with a total of 213 FTE vehicles (31 more
than staffs proposal). The recommendation also proposes a distribution of vehicles that
does not take into account market share, but instead proposes essentially a numerically
an equal division of vehicles between companies.
The chart on the next page shows the breakdown recommended by the Taxicab
Coalition.
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Taxicab Coalition Recommendation
Company
Proposed
Full Time
Equivalent
Vehicles
Proposed
Full Time
Vehicle
Permits*
Proposed
Part Time
Vehicle
Permits*
Actual
Proposed
Total
Vehicles
Permitted
Bell Cab 33 15 35 50
ITOA 41 32.5 17.5 50
Metro Cab 48 38 20 58
Taxi! Taxi! 58 58 0 58
Yellow Cab 33 15 35 50
Totals 213 158.5 107.5 266
*Fraction resulted due to the proposal containing percentages instead of actual
numbers. The final numbers would need to be rounded to reflect a whole number.
Taxi! Taxi! - Vehicle Allocation Alternative Proposal
Taxi! Taxi! made several recommendations in its response to the August 17, 2015 letter
and subsequent individual meeting with the company. Taxi! Taxi!’s original request was
to reduce the number of franchisees to two and to reduce the total number of vehicles t o
125 with no distinction between full time and part time vehicles, which is 57 fewer
taxicabs than recommended by staff. The two charts below provide a breakdown of
Taxi! Taxi!’s proposals. The first is based on market share and proposes a total of 125
vehicles; the second is based on performance and proposes a total of 121 vehicles.
Both of Taxi! Taxi!’s proposals assume that the companies would determine how many
vehicles would be full time or part time; however, only Bell would have the ability to
make a vehicle part time. If Council were to choose to adopt Taxi! Taxi!’s proposal to
reduce the number of vehicles to 121 and only grant franchises to Bell Cab and Taxi!
Taxi, since the total number of vehicles would be very low, staff would have no
objections to allowing Bell Cab the flexibility to determine how many vehicles in its fleet
were full time vs. part time. For example, even if Bell Cab opted to make all of its
vehicles full time, the total number of full time vehicles would still be less then staffs
current proposal of 182 full time equivalent vehicles.
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Taxi! Taxi! Proposal – Based on Market Share
Company
Proposed
Full Time
Equivalent
Vehicles
Proposed
Full Time
Vehicle
Permits
Proposed
Part Time
Vehicle
Permits
Actual
Proposed
Total
Vehicles
Permitted
Bell Cab n/a n/a n/a 8
ITOA n/a n/a n/a 8
Metro Cab n/a n/a n/a 26
Taxi! Taxi! n/a n/a n/a 63
Yellow Cab n/a n/a n/a 20
Totals n/a n/a n/a 125
Taxi! Taxi! Proposal – Based on Performance
Company
Proposed
Full Time
Equivalent
Vehicles
Proposed
Full Time
Vehicle
Permits
Proposed
Part Time
Vehicle
Permits
Actual
Proposed
Total
Vehicles
Permitted
Bell Cab n/a n/a n/a 58
ITOA n/a n/a n/a 0
Metro Cab n/a n/a n/a 0
Taxi! Taxi! n/a n/a n/a 63
Yellow Cab n/a n/a n/a 0
Totals n/a n/a n/a 121
Franchise and Permit Fees
Staff is recommending that there be no changes to fees at this time except for vehicle
franchise fees for part time vehicles. Staff recommends that full time vehicle franchise
fees be consistent with the current franchise vehicle fee and that part time vehicles be
reduced to 50% of current vehicle franchise fees. Driver and vehicle permits are based
on cost recovery so these fees are not impacted by the two-year driver permit or part
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time vehicle permit. Any increase in permitting fees would be adjusted in accordance
with standard CPI increases.
The fee structure is outlined below and the proposed Resolution is provided as
Attachment S.
Franchise Fees:
Annual base franchise fee per taxicab company $5,000
Annual franchise fee per Full Time vehicle in taxicab fleet $1,100
Annual franchise fee per Part Time vehicle in taxicab fleet $ 550 (new)
Vehicle Permit Fees:
New vehicle permit fee $119.86
Transfer vehicle permit fee $119.86
Renewal vehicle permit fee $ 54.58
Replacement vehicle permit fee $ 38.53
Vehicle re-inspection fee $ 29.97
Taxicab Driver’s Permit Fees:
New and renewal taxicab driver’s permit application fee $208.69
Taxicab driver’s permit re-examination fee $ 66.35
Taxicab driver’s permit transfer fee $ 66.35
Taxicab driver’s permit replacement fee $ 29.97
Santa Monica Police Department Live Scan fee* $ 67.00
*Live Scan fee established by the Police Department. Additional fees may be required by the Police
Department if FBI search is required.
Rates
Staff is recommending that no significant changes be made to the existing rate
structure. If Council approves removal of the rate floors by allowing companies to
provide discounts beyond just airport flat rates, no changes are needed at this time
since the companies will have the flexibility to lower rates as needed. By maintaining
the existing maximum rates taxicab companies would not be able to implement price
surging, as TNCs such as Uber has. This provides more predictability for passengers.
A passenger may pay less than the existing rates, however, it would be illegal to charge
more than the base rates. Additionally, the proposed rate schedule would allow the taxi
companies to negotiate different rate s (higher or lower than the set rates) with another
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entity to provide specialty prearranged transportation services for events, such as
weddings, employee shuttles or carpooling services.
The current rates are outlined in the chart below and the proposed Resolution is
provided as Attachment S.
Mileage Rates
$2.85 flag drop (first 1/9th mile)
$0.30 for each additional 1/9th mile ($2.70 per mile)
$0.30 for each 37 seconds waiting/delay ($29.19 per hour)
Airport Flat Rates
North of I-10 to Los Angeles International Airport $35 maximum
South of I-10 to Los Angeles International Airport $30 maximum
Santa Monica to Bob Hope Airport $75 maximum
Senior and Disabled Discount
Senior citizens (persons age 65 and older) and persons with disabilities (including
persons with a Los Angeles County Transit Operators Association Metro Disabled
Identity Card) receive a ten percent (10%) discount.
Custom Rates
A taxicab company would be able to establish flat rates to any destination;
however, the flat rate may not exceed the maximum that would otherwise be paid
at the mileage rate established by this resolution. A taxicab company would also
be able to set mileage rates, flat rates or other negotiated rates pursuant to an
exclusive arrangement with any business establishment that is for the specific
purpose of providing prearranged transportation services for events with multiple
participants, employee shuttle services, carpooling services, or other
arrangements. These rates must be filed with the City five business days prior to
their implementation.
Driver Working Conditions and Income
The current business model used by the taxicab industry in Los Angeles is based on a
franchise system with the local jurisdiction where companies lease vehicles to individual
drivers. The taxicab company’s revenues are from vehicle leases and other services
provided to the drivers, and in some cases advertising on the vehicles. The taxicab
companies classify the relationship of the driver with the taxicab company as
independent contractor. Lease agreements include language that the driver agrees they
are self-employed and that the companies only provide vehicles and other services to
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them. Taxicab companies also claim that they are not able to exercise “control” over
drivers because of the independent contractor status, such as directing drivers where
and when to work.
Under the existing system drivers do not have access to statutory benefits including,
unemployment insurance, short-term disability insurance, workers compensation, or
legal protections against discrimination and a minimum wage.
Staff proposes to evaluate potential changes to the taxicab program that would create a
more direct connection between the taxicab companies and fare paying customers, as
well as evaluate structures that could potentially allow companies to be more directly
responsible to market forces instead of City regulations. By being more directly
responsible to the market, it is possible that the City could eliminate the need to set
vehicle limits, since companies would be incentivized by market forces to deploy only
the number of vehicles that the market would support. This approach has the potential
to make taxicab companies more directly responsible for customer service, safety, and
working conditions.
Staff recommends that Council direct staff to research options that would consider
changes to the taxicab franchise program that would make companies more
accountable to market forces rather than City regulations.
In-City Vehicle for Hire Regulations
Staff recommends only minor amendments to address in -city vehicles for hire, including
clarifying the definition of in-city vehicles for hire, prohibiting in-city vehicles for hire from
providing non-passenger delivery services (e.g. food, goods, etc…), and establishing
application approval/denial conditions for in-city vehicles for hire. In-City vehicles for
hire operate only within the City of Santa Monica city limits and are not regulated by the
CPUC. The draft ordinance amending Chapter 6.48 of the SMMC is included as
Attachment K.
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Pedicabs
California Vehicle Code (CVC) 312.5 defines "electric bicycle" as a bicycle equipped
with fully operable pedals and an electric motor of less than 750 watts . It establishes
the following three classes of electric bicycles:
1. “Class 1 electric bicycle,” or “low-speed pedal-assisted electric bicycle,” is a
bicycle equipped with a motor that provides assistance only when the rider is
pedaling, and that ceases to provide assistance when the bicycle reaches the
speed of 20 miles per hour.
2. “Class 2 electric bicycle,” or “low-speed throttle-assisted electric bicycle,” is a
bicycle equipped with a motor that may be used exclusively to propel the bicycle,
and that is not capable of providing assistance when the bicycle reaches the
speed of 20 miles per hour.
3. A “class 3 electric bicycle,” or “speed pedal-assisted electric bicycle,” is a bicycle
equipped with a motor that provides assistance only when the rider is pedaling,
and that ceases to provide assistance when the bicycle reaches the speed of 28
miles per hour, and equipped with a speedometer.
Class 3 electric bicycles are prohibited by the CVC from operating on bicycles paths or
trails. The City has the authority to prohibit, by ordinance, the operation of a class 1 or
class 2 electric bicycle on a bicycle path or trail, equestrian trail, or hiking or recreational
trail within its jurisdiction.
Staff recommends including CVC 312.5 defined electric bicycles as pedicabs to ensure
that any pedicab operator that utilizes a motor to assist the pedicab driver is subject to
all pedicab regulations. Pedicabs are currently prohibited on the beach bike path when
operating for hire due to due to the safety issues related to the size of the pedicab in
relation to the beach bike path.
The draft ordinance amending Chapter 6.50 of the SMMC is included as Attachment K .
Next Steps for Taxicab Program
1. Implement the administrative changes to the taxicab program.
2. Issue administrative rules no later than December 31, 2015.
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3. Monitor changes to the vehicle for hire market, particularly TNCs.
4. Prepare an analysis of driver working conditions and income as it relates to the
current taxicab business model, which relies on lease revenue, as opposed to
fares.
5. Return to Council by March 2017 with a status of the program and recommended
changes to the taxicab franchise program that would make companies more
accountable to market forces rather than City regulations, including the potential
of barring Taxicab companies from using independent contractors as drivers.
Alternatives
1. Extend the franchises, maintaining the existing franchise system as it exists with
no changes to the regulatory scheme or the number of vehicles authorized. This
option would not address concerns related to competition with TNCs or the total
number of vehicles authorized.
2. Extend the franchises, maintaining the existing franchise system with minor
changes to the regulatory scheme, including allowing companies to remove
vehicles from operation at their discretion to allow for flexibility and to remove
price floors, with no changes to the number of vehicles. This option would be
closer to the approach that Long Beach took addressing in a small way concerns
related to competition with TNCs, but would not address the total number of
vehicles authorized.
3. Extend the franchises of only two companies, maintaining the existing franchise
system with minor changes to the regulatory scheme, including allowing
companies to remove vehicles from operation at their discretion to allow for
flexibility and to remove price floors, with no changes to the number of vehicles.
This option addresses in a small way concerns related to competition with TNCS
and would reduce the total number of vehicles authorized.
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Financial Impacts and Budget Actions
There is no immediate financial impact or budget action as a result of the recommended
action. Staff will return to Council if specific actions are required in the future. Staff
anticipates an ongoing revenue reduction in the amount of $144,389 beginning in FY
2015-16 due to the reduction in the number of authorized vehicles and the reduced
vehicle franchise fees for part time vehicles, and an additional reduction in the amount
of $68,659 in revenue in FY 2016-17 due to the implementation of a two year driver
permit. Revenue changes are included in the FY 2015-16 Adopted Budget and the FY
2016-17 Budget Plan.
Prepared By: Salvador Valles, Assistant Director of PCD
Approved
Forwarded to Council
Attachments:
A. 2008 Taxicab Study (weblink)
B. Taxicab Franchise Adopted (weblink)
C. Public Hearing & Award of Taxicab Franchises (weblink)
D. Increase of Vehicles to 300 (weblink)
E. Amendments and Clarifications (weblink)
F. Assignment of Taxicab Franchise to All Yello Taxi, Inc., dba Metro Cab (weblink)
G. March 2015 Study Session (weblink)
H. August 2015 Letter to Taxicab Franchises
I. September 2015 Letter from Taxicab Coalition
J. September 2015 Letters from Taxi Taxi with Addendum and Petition
K. Chapters 6 48 6 49 6 50 AMENDMENTS
L. Taxicab Franchise Terms and Conditions BELL CAB AMENDMENTS
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M. Taxicab Franchise Terms and Conditions ITOA AMENDMENTS
N. Taxicab Franchise Terms and Conditions METRO CAB AMENDMENTS
O. Taxicab Franchise Terms and Conditions TAXI TAXI AMENDMENTS
P. Taxicab Franchise Terms and Conditions YELLOW CAB AMENDMENTS
Q. Taxicab Rules Eff 1-1-2016 DRAFT AMENDMENTS
R. Vehicle Allocation Criteria
S. Taxicabs Fee Resolution final
T. Taxi Presentation - Council November 10, 2015
City Council
Report
City Council Meeting: November 14, 2017
Agenda Item: 7.A
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To: Mayor and City Council
From: David Martin, Director, Transportation Planning
Subject: Introduction for First Reading of Ordinances Extending the Taxicab
Franchises of Bell Cab, Independent Taxi Owners’ Association, Metro Cab,
Taxi! Taxi! and Yellow Cab for one year; Extending City Taxi Cab Driver
permit expiration dates to December 31, 2018; and adopting a resolution
setting reduced taxicab driver permit fees
Recommended Action
Staff recommends that the City Council introduce for first reading the a ttached
ordinances 1) extending the franchises of Bell Cab, Independent Taxi Owners’
Association, Metro Cab, Taxi! Taxi!, and Yellow Cab for one year; 2) extending City Taxi
Cab Driver permit expiration dates to December 31, 2018; and 3) adopting a resolution
setting reduced taxicab driver permit fees.
Executive Summary
The City’s taxicab franchise system, established in March 2011 and renewed from time
to time, is currently set to expire on December 31, 2017. The taxi industry has been in
decline in recent years concurrent with the rise of Transportation Network Companies
(TNCs) such as Uber and Lyft across the country. California State Assembly Members
have been proposing revised taxicab regulations during recent sessions in response to
these challenges. The most recent iteration, AB 1069, was signed by the Governor on
October 13, 2017. While some AB 1069 regulations will take effect on January 1, 2018,
the most impactful changes will not take effect until January 1, 2019. Most notably, by
January 1, 2019, taxicab permitting will move from the current patchwork of various
local requirements to a countywide system that only requires taxicab drivers and
companies to obtain a permit in the jurisdictions that they are “substantially located.” A
number of implementation questions remain to be resolved with the new regulations,
including the interpretation of the “substantially located” requirement and which
agencies will assume the role of countywide taxicab regulation. Staff will work with
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surrounding jurisdictions and agencies and provide Council with an update on AB 1069
implementation by July 2018.
In the meantime, staff is recommending 1) a one-year extension of the original five-year
franchise, which expires on December 31, 2017; and 2) extension of all e xisting City
Taxi Cab Driver Permits until the end of 2018. The extensions, through December 31,
2018, will coincide with the implementation of AB1069. Since approval of AB1069 was
unknown at the time of the staff report preparation, staff went through th e process of
seeking input from the taxicab companies regarding the franchise regulations. Staff
received requests from all five taxicab companies to reduce the annual vehicle franchise
fee and eliminate the per vehicle business license fee as well as othe r changes. Given
the pending change to the whole regulatory system, Staff recommends the continuation
of all regulations for the remaining one-year franchise period but requests a reduction in
taxicab driver’s permit application and renewal fees.
Background
On July 28, 2009, the City Council established the taxicab franchise to regulate taxicab
transportation services operated within the City, including practices for licensing the
taxicab businesses, rates, and mandatory controlled substance and alcohol te sting. On
October 12, 2010, the Council granted franchises to five taxicab companies. The
original franchise was granted for five years through December 31, 2015.
On November 24, 2015, Council modified and extended the existing franchise
agreements for two years to December 31, 2017 for all five taxicab companies, and
maintained the number of authorized vehicles at 300. Council granted taxicab
companies the ability to “park” a taxicab, which allows the taxicab company to remove
the vehicle from its insurance plan, saving the company money during slower periods.
On October 10, 2016, Taxi! Taxi! submitted a request to reduce the number of taxicab
vehicles authorized to operate. Section 5(f) of the taxicab franchise agreement allows a
franchisee to request a reduction in the size of their fleet if the “public convenience and
necessity no longer requires Grantee to furnish taxicab services with the number of
vehicles authorized under this franchise”. On October 31, 2016, the four remaining
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taxicab companies, Bell Cab, ITOA, Metro Cab, and Yellow Cab (i.e., the “Taxicab
Coalition”) submitted requests to reduce the number of vehicles. At its December 6,
2016 meeting, the Council approved the taxicab companies’ request and reduced the
number of authorized vehicles from 300 to 199.
Discussion
The taxicab industry has been in a steady decline since the arrival of TNCs, including
Uber and Lyft, in 2012. From 2013 through 2016, taxicab trips in Santa Monica have
declined 68% and the gross revenue of the franchises has declined 54%. It is
estimated by the end of 2017 gross revenue will decline by 64% and total trips by 79%
since 2013. The following chart shows the decline in gross revenue and trips for each
year compared to 2013:
YEAR GROSS REVENUE DOWN SINCE
2013 YEAR TRIPS DOWN SINCE
2013
2013 $14,875,472 2013 750,555
2014 $11,355,224 24% 2014 571,037 24%
2015 $7,897,532 47% 2015 352,614 54%
2016 $6,858,816 54% 2016 238,648 68%
2017* $5,309,870* 64% 2017* 159,130 79%
A total of 199 vehicles have been authorized by Council, and currently 128 vehicles are
dedicated (providing taxicab services only in Santa Monica), of those 9 are ‘parked’ and
removed from service, and 41 provide Access Services. When taxicab vehicles provide
trips through the County’s Access program, they are not available to respond to calls in
the Santa Monica area. In August 2017, 108 (54%) of the 199 authorized vehicles
provided trips in Santa Monica.
STATUS OF AUTHORIZED VEHICLES
Company Authorized
Vehicles
Dedicated
Vehicles
Parked
Vehicles
Access
Vehicles
Vehicles
Providing
Service In
August
Bell Cab 43 3 2 0 25
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ITOA 30 18 0 0 18
Metro Cab 43 43 7 21 10
Taxi Taxi 40 40 0 0 39
Yellow Cab 43 24 0 20 16
TOTAL 199 128 9 41 108
Since 2015, the number of calls for service responded to within 15 minutes for each
taxicab company has not changed significantly even with the reduction of authorized
vehicles and vehicles removed from service by “parking”. Taxicab franchises with
licenses in surrounding cities (Bell, ITOA, and Yellow) continue to have lower response
times than Metro Cab and Taxi! Taxi!. The following chart provides a comparison
between 2015, 2016, and 2017 year to date through August.
AVERAGE PERCENT OF CALLS
REPONDED TO WITHIN 15
MINUTES
JANUARY – AUGUST 2015,
2016 AND 2017
Company 2015 2016 2017
Bell Cab
89% 87% 87%
ITOA
90% 87% 85%
Metro Cab
94% 91% 90%
Taxi! Taxi!
93% 94% 94%
Yellow Cab
83% 80% 74%
Taxi Regulation
The taxicab industry has been hit hard by the emergence of TNCs (Uber and Lyft) as an
alternative in the vehicle for hire transportation market. For the past two years,
California Assembly Member Low has introduced bills to attempt to level the playing
field between taxicabs and TNCs. In 2015, Low introduced Assembly Bill 650 which
attempted to modernize the regulation of taxicab transportation services in order for
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taxicabs to better compete with all for-hire modes of transportation. Governor Brown
vetoed this bill in September 2016.
In February of this year, Low introduced Assembly Bill 1069 to again modernize the
regulation of taxicab transportation services and it was signed by Governor Brown in
October. AB 1069 is effective January 1, 2018, though the bulk of its impactful changes
will not become effective until January 1, 2019. Senate Floor analysis of AB 1069 is
provided. (Attachment A)
Beginning January 1, 2018, taxicab companies and taxicab drivers are required to
collect and report trip data for 12 months in order to determine where taxicab
companies and taxicab drivers are substantially located.
Beginning January 1, 2019, AB 1069 removes the existing broad and relatively
unrestricted taxicab permitting authorities from local jurisdiction. It further requires all
local jurisdictions to permit and regulate taxicab drivers and companies that are
“substantially located” within their jurisdiction. Substantially located is defined as the
jurisdiction “where the primary business address of the company or driver is located” or
“in which trips originating in that jurisdiction account for the largest share of that
company or driver’s total number of trips within [the] county over the past year.”
AB1069 further grants permitting authority to certain joint powers authorities and transit
agencies. These grants of authorities will need further review by staff.
Even after 2019, AB 1069 still allows local jurisdictions to adopt operating requirements
unrelated to permitting or business licensing for taxicab companies and drivers,
regardless of whether such companies and drivers are substantially located within their
jurisdictions. Such authorized operating requirements include limits on the use of taxi
stands or street hails.
Approval of AB1069 was not anticipated given local agency opposition. Staff has begun
to look at what the bill means for Santa Monica’s franchise based on current trip making
patterns. Preliminarily, it appears that Metro Cab and Taxi! Taxi! would be considered
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substantially located within Santa Monica. Other taxicab companies, given their regional
reach, may not be substantially located in Santa Monica.
Staff will continue to analyze the bill, meet with other jurisdictions over the next several
months to determine how this bill will be implemented and its affect on our City’s taxicab
service. Staff will provide an update to Council on AB 1069 by July 2018 and return to
Council with any necessary changes to the taxicab franchise by November 2018.
Taxicab Franchisees – Requests
Since approval of AB1069 was unknown at the time of the staff report preparation, staff
solicited input from the five taxicab companies as part of developing the franchise
extension recommendations. The existing franchisees provided two letters, one
individual letter from TMAT Corp. (dba Taxi! Taxi!) and one joint letter from Bell Cab
Company, Inc., Independent Taxi Owners’ Association, All Yellow Taxi (dba Metro Cab),
and LA Taxi Cooperative (dba Yellow Cab Company) (Attachment B). Below is a
summary of the primary requests and responses. Given the impending substantial
change to taxicab regulation, staff is recommending continuation of current regulations
and practices until the new regulations take effect.
Taxi! Taxi! requests to increase number of authorized vehicles to 63
o Data does not support increasing the number of Taxi! Taxi! authorized
vehicles as trips are continuing to decline.
Cancel Weights and Measures Certificate
o The County of Los Angeles Department of Agricultural
Commissioner/Weights and Measures Bureau is responsible for the
regulation of taximeters. We require that taxicab vehicles have meters
and that the meter be inspected.
Reduce the annual franchise fee per vehicle and cancel the business
license fee;
o Staff recommends maintaining the current regulations and only change
the taxicab driver’s permit application fee in addition to the permit
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renewal fee for the remaining year of the current franchise, until the
impact of the new State legislation is fully evaluated. The cost of the
taxicab driver’s permit (new or renewal) would be reduced from
$112.86 to $48 for 2018.
Cancel printed waybills and use the digital record
o In November 2015, the Taxicab Rules and Regulations were updated.
Each franchisee shall maintain waybills and make them available for
inspection for up to 1 year from the date of the trip.
No monthly reports, only on demand
o Staff recommends that the franchises continue to submit monthly
reports. Timely monthly reports allow staff to analyze data, report
findings, make recommendations and ensure administrative efficiency.
Driver Permits
In November 2015, Council approved a two-year pro-rated taxicab driver permit as
requested by the taxicab companies. Pro-rating the driver permit fees enables drivers to
pay for only the proportion of months remaining in the year at the time of application. All
two year permits expire at the end of the current franchise period on December 2017.
Consistent with the proposed one-year Franchise extensions, Staff recommends
extending the driver permit expiration date to the end of 2018. Staff also recommends
that taxicab driver’s new and renewal permit application fees be reduced to $48 and
prorated monthly based on the number of calendar months remaining until the permit
expires in accordance with Santa Monica Municipal Code Section 6.49.070(e). Staff
believes that this reduction is necessary in light of the heavy competition that City
permitted taxi drivers face from Transportation Network Company drivers.
Next Steps for Taxicab Program
1. Work with county jurisdictions on the implementation strategy for AB1069
2. Provide Council with an update regarding implementation of AB1069 before July
2018, and return to Council with any necessary changes to the taxicab franchise
program by or before to November 2018.
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Financial Impacts and Budget Actions
Staff anticipates revenues to decrease by approximately $16,410 in Taxi Driver Permit
Fees due to the proposed reduction in permit fees. Staff will include consideration of
budget impact with updates on the implementation of AB1069 during the FY 2018 -19
Exception Based Budget.
Attachments:
A. Senate Floor Analysis of AB 1069
B. Franchisee Requests
C. Bell Cab Ordinance
D. Independent Taxi Ordinance
E. Metro Cab Ordinance
F. Taxi! Taxi! Ordinance
G. Yellow Cab Ordinance
H. Ordinance Modifying SMMC Chapter 6.49
I. Fee Resolution
Prepared By: Cheryl Shavers, Senior Administrative Analyst
Approved
Forwarded to Council
Attachments:
A. Senate Floor Analysis AB 1069
B. Franchisee Requests
C. Bell Cab Ordinance
D. ITOA Ordinance
E. Metro Cab Ordinance
F. Taxi Taxi Ordinance
G. Yellow Cab Ordinance
H. Taxi Permit Ordinance
I. Taxi Fee Resolution
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J. Powerpoint Presentation
City Council
Report
City Council Meeting: October 23, 2018
Agenda Item: 7.B
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To: Mayor and City Council
From: David Martin, Director, Transportation Planning
Subject: Modification to Taxicab Franchise for consistency with AB 1069 and AB 939,
and extension of Taxicab Franchise Agreement with TMAT Corp (dba Taxi!
Taxi!)
Recommended Action
1) Introduce for first reading of an ordinance amending Chapter 6.49 of the Santa
Monica Municipal Code modifying provisions of the taxicab franchise regulations;
2) Adopt a Resolution establishing maximum taximeter rates.
Executive Summary
As a result of recent changes in State law designed to simplify the permitting process
for taxicabs, the City must update its local taxicab franchise ordinance. Major
components of the new law include: 1) limiting broad based local regulations to only
those taxicab companies “substantially located” in the City, 2) allowing any taxicab
company permitted by another local governmental agency to provide prearranged trips
within the City, 3) allowing taxicab companies to establish rates, but authorizing a city to
set maximum rates, and 4) continuing to grant local authority to adopt limited taxicab
operating requirements unrelated to permitting or business licensing. Staff has
proposed updates to Santa Monica Municipal Code Chapter 6.49 (Taxicabs). Staff also
proposes eliminating the taxi driver permit test and establishing maximum taximeter
rates. Staff will return with a recommendation to amend and extend the current
franchise of TMAT Corp. (dba Taxi! Taxi!), the only taxicab company that currently
meets the criteria of being “substantially located” in Santa Monica. Two of the other
three taxicab companies are asking to be allowed to operate under Government Code
53075.5(d)(2). Staff is not recommending this option. The remaining company wants to
meet the criteria of being substantially located.
Background
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On July 28, 2009, the City Council established a taxicab franchise to regulate taxicab
transportation services operated within the City. The franchise created practices for
licensing the taxicab companies, permission to operate a specified number of vehicles,
maximum customer charges, driver testing and permitting, inspections, mandatory
controlled substance and alcohol testing, monthly reporting, and many other system
oversight and management practices.
In November 2010, the Council granted franchises to five taxicab companies: Bell Cab
Company, Metro Cab Company, Independent Taxi Owners’ Association, TMAT Corp.
(dba Taxi! Taxi!), and Yellow Cab Company. Council modified and extended the
franchise agreements for all five operators on November 24, 2015, and again on
November 14, 2017. The agreements and driver permits were given an expiration of
December 31, 2018, to coincide with Assembly Bill 1069 changes.
Demand for taxicab services has been steadily dropping in recent years, and in late
2016 all five companies submitted requests to remove vehicles from their fleet and to
stop paying associated per-vehicle fees. Section 5(f) of the taxicab franchise agreement
allows a franchisee to request a reduction in the size of their fleet if the “public
convenience and necessity no longer requires [the franchisee] to furnish taxicab
services with the number of vehicles authorized under this franchise.” On December 6,
2016, the Council approved the taxicab companies’ request and reduced the number of
authorized vehicles from 300 to 199. A year later, in 2017, Council also reduced the
annual franchise fee per vehicle from $1,100 to $452.
In January 2018, Metro Cab informed the City that it would not renew its franchise for
2018 due to the reduced demand for taxicab services and the loss of the majority of its
business to Transportation Network Companies (TNCs). In accordance with Santa
Monica City Charter Section 1602, the City considered Metro Cab’s non -renewal a
forfeiture of its taxicab franchise, which became effective immediately. Presently, four
taxicab companies, Bell Cab, Independent Taxi Owners’ Association, Taxi! Taxi!, and
Yellow Cab, continue to provide taxicab services through the franchise agreements set
to expire on December 31, 2018.
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Discussion
Santa Monica’s current franchise system of four taxicab companies provide
approximately 150,000 trips annually in Santa Monica. The annual trips are down from a
peak of 750,555 in 2013, but the continued large number of annual trips demonstrates
the on-going usefulness of taxicab services for certain users and types of trips
originating in Santa Monica. Recognizing that taxicabs serve an on-going customer
base, Council has acted in recent years to provide greater flexibility and fee relief.
The current franchise system allows the four companies exclusive access to service
prearranged taxi trips, street hails and utilize City taxi stands. The franchise requires
taxicab companies to pay fees, maintain their allocated fleet ve hicles and pass an
annual inspection, demonstrate compliance with metering and maximum charges,
submit to driver testing, provide an annual business plan describing their organizational,
management and administrative structure and procedures, submit monthl y trip data and
participate in other oversight practices.
As a result of national trends, the taxicab industry in Santa Monica continues to decline
as other vehicle for hire modes such as Uber and Lyft grow. The current franchise
monthly data reporting shows that trips and gross revenue of the taxicab operators
continue to drop. From 2013 through 2017, taxicab trips have fallen 80 percent and
gross revenue has declined 64 percent (Table 1). For January to July of this year, trips
are down 24 percent year-over-year, and revenues have dropped 25 percent (Table 2).
Table 1. Annual Trips & Gross Revenue
Year Trips Change Gross
Revenue Change
2013 750,555 n/a $14,875,472 n/a
2017 154,204 -80% $5,004,585 -64%
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Table 2. Recent Trips & Gross Revenue (Januar y-July)
Year (Jan–July) Trips Change Gross
Revenue Change
2017¹ 92,900 n/a $3,103,692 n/a
2018² 71,333 -24% $2,350,845 -25%
¹ - Five Taxicab Companies ² - Four Taxicab Companies
In response to the downturn in demand for taxicab services, taxicab op erators have
reduced the number of service vehicles. Council authorized a total of 199 vehicles in
2017, but the taxicab operators submitted renewal applications for only 137 taxicab
vehicles in 2018 as shown in Table 3. (Metro Cab’s franchise forfeiture included 43
authorized vehicles, which reduced the total authorized vehicles to 156 citywide.)
July is a busy month for taxicab operations, and companies would be expected to be
operating at or near their peak for the year. In July 2018, the companies were operating
only 94 of the 137 permitted vehicles. Taxi!Taxi! was operating the largest proportion of
the vehicles, with 39 of the 94, which is 98 percent of its authorized vehicles.
Table 3. Vehicles in Service
Company
Permitted/
Authorized
Vehicles
Vehicles in
Operation
(July)
Permitted
Vehicles in
Operation
(July)
Authorized
Vehicles in
Operation
(July)
Bell Cab 30/43 22 73% 51%
Independent 25/30 16 64% 53%
Taxi! Taxi! 39/40 39 98% 98%
Yellow 43/43 17 40% 40%
TOTAL 137/156(88%) 94 69% 60%
Of those vehicles that have been permitted/authorized, only 72 are dedicated to the
Santa Monica market. The remaining taxicabs have permits in one or more additional
jurisdictions, most commonly Beverly Hills, Los Angeles, and/or West Hollywood. For
example, 20 of the Yellow Cab vehicles are contracted to provide Access Services in
South Los Angeles and therefore spend most of their time in that area.
California State Assembly Bills 1069 and 939 – Changes to Taxi Regulations
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In light of the challenges facing the taxicab industry, and the relatively more numerous
and strict local rules applied to the taxicab industry relative to Uber and Lyft (TNCs) in
California, the state intervened to redefine local regulation of taxicab transportation
service. The new rules are intended to enable taxicabs to better compete with all for -
hire modes of transportation, and to relieve taxicab companies from the patchwork of
local requirements and instead focus on the requirements of the jurisdiction to which
they have the closest connection. TNCs in California are currently regulated by the
California Public Utilities Commission, with accountability only to a Statewide agency.
The new rules reduce local regulation to position taxicabs more on par with TNCs.
State Assembly Bill 1069 was approved by the Governor in October 2017, and
Assembly Bill 939 amended AB 1069 with administrative and clarifying changes in
September 2018. The major substantive changes to local regulation are:
1. Limiting broad based local regulations to only those taxicab companies
“substantially located” in the city.
2. Allowing a taxicab company that is permitted by another local governmental
agency to provide prearranged trips within the city.
3. Limiting local regulation of taximeter rates to a maximum rate, and allowing
taxicab companies greater rate flexibility.
4. Continuing to provide local jurisdictions with limited authority to adopt operating
requirements for all taxicab companies and drivers that are not related to
permitting or business licensing (for example, limiting street hails or use of
taxicab stands, and imposing public safety, health, and welfare regulations).
AB1069 further reiterates some of the core components of what local jurisdictions
already require, such as a mandatory controlled substance and alcohol testing
programs, DMV pull notices to check driver records, and ability to levy service charges,
fees or assessments to carry out an ordinance for taxicab services (see Attachment A
for an overview of the bill).
Updates to Santa Monica Regulations based on California State Law
AB1069 necessitates that the City update its taxi laws (Santa Monica Municipal Code
6.49 Taxicabs) and amend its franchise ordinances. Below is a discussion of each of
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the major changes in State law and proposed adjustments to Santa Monica’s franchise
rules and procedures.
1. Pursuant to AB1069, broad based local regulations are limited to taxicab
companies “substantially located” in the city. A taxicab company is substantially
located in a city if it meets either of the following: has its primary business
address within that city or, the total number of prearranged and non-prearranged
trips that originate within that city account for the largest share of the taxicab
company’s total trips.
TMAT Corp., dba Taxi! Taxi! has been providing taxicab services in Santa Monica for
over 30 years and is currently the only company that is currently “substantially located”
in Santa Monica. Staff proposes extending its franchise for an additional five years, and
it will remain subject to local regulations. Bell Cab and Yellow Cab are asking to be
allowed to operate under Government Code 53075.5(d)(2).
Going forward, the new state definition of “substantially located” will allow a
taxicab company to establish a primary business address in Santa Monica and
become “substantially located.” Independent Taxi Owners Association wishes to
continue its franchise with the City and is considering its options to become
substantially located.
2. Any taxicab company permitted within LA County may pick up prearranged trips
in Santa Monica.
State law allows any taxicab company permitted by a local governmental agency
to service trips within the County that have been pre-arranged through a
dispatch, phone application, or other booking. The proposed Ordinance
addresses this change in state law. Presently, Bell Cab, Independent Taxi and
Yellow Cab account for approximately 40 percent of all trips in Santa Monica and
it is expected they will continue to provide some prearranged service here. The
six companies operating in Los Angeles are likely to continue providing
prearranged trips, along with any others that are permitted in the County under
this provision of the bill.
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When the franchise was created, there was a concern regarding the over -supply
of taxicab companies and the impacts on traffic, congestion and curb space use.
Given the significant reduction in taxicab demand, this is not anticipated to
become a concern with changes in state law, unless demand or operating
conditions were to substantially change.
3. Taxicab companies may set fares or charge flat rates. However, the city may set
a maximum rate.
Currently the fees and rates that a taxicab franchisee may charge are set by
Council resolution. This bill allows companies to set their fees and rates, and
adjust prices with demand, much like TNCs. Cities may still set a maximum rate
to protect customers from excessive or disproportionate fees.
In discussions with Taxi! Taxi! regarding this provision, staff was informed that
Taxi! Taxi! would like to maintain the current rates as a maximum with the option
of adjusting them at a later date. The proposed resolution reflects the
maintenance of current rates. Additionally, staff has been in discussions with
regional taxicab administrators regarding setting a maximum rate that is the
same throughout the county. As additional data is available, and regional
discussions progress, staff would return to Council with potential adjustments to
the maximum rate.
4. City may limit the number of taxis that may use stands or pickup street hails.
The four taxicab companies currently permitted in Santa Monica have exclusive
access to the existing City taxi stands for walkups and street hails. Companies
permitted within LA County but not permitted in Santa Monica may end trips and
conduct prearranged trips, but not hail or use the stands. Taxi! Taxi! would be
able to continue providing services to customers using existing City stands.
Staff discussed reciprocity regarding this provision with the Los Angeles Taxicab
Administrator. Staff was informed that Los Angeles is not considering sharing
their stands or allowing street hails by taxicab companies not permitted in their
jurisdiction. As such, staff is recommending that taxi stands be utilized
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exclusively by taxicab companies substantially located in and permitted by Santa
Monica.
Bell Cab and Yellow Cab wish to continue servicing Santa Monica residents and
visitors through Section 53075.5 (d)(2) of the Government Code, which reads “A
city or county may accept a taxicab company or driver permit issued by another
city or county as valid, and may issue to that taxicab company an inspection
sticker or photo permit that authorizes that taxicab company or driver to operate
within the county. All companies can serve prearranged trips in Santa Monica,
which is 52% of all trips. This sticker would only affect access to the taxistands
and hailing. The law requires issuance of a sticker or photo permit to each allow
driver and company. Due to the limited benefit from the sticker and the
potentially burdensome administrative requirements, staff is recommending not
to pursue this option.
Eliminating Written Driver Tests
Currently, drivers who submit an application for a new taxi driver permit are required to
take a written exam to test his or her ability to operate a taxicab; ability to communicate
in English; knowledge of and ability to locate addresses and intersections in Santa
Monica and surrounding Los Angeles County; and knowledge of the laws of the road.
The City of Los Angeles no longer requires new taxicab driver applicants to pass a
written examination. The number of new Santa Monica taxicab driver permit
applications has been declining since June of last year. This year, the driver
examination has been administered for only six applicants, all of whom passed.
Additionally, taxicab drivers have phones and/or monitors with map applications that
provide directions to a location. Staff recommends removing the written exam
requirement for new taxi driver permit applicants.
The terms and conditions of the franchise mandate that taxicab companies provide
programs and activities for driver training. Taxi! Taxi! provides classes that assist
drivers with their overall knowledge of the taxi profession and road skills, including
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regulations and laws, driver professionalism and customer service, effective use of
navigational devices, and local area appreciation and geography.
Changes to the Santa Monica Municipal Code
Santa Monica’s current taxicab franchise system is currently implemented through
components of Municipal Code Section 6.49, the Ordinances approving each taxicab
franchisee, and the Administrative Regulations for the program. Proposed updates to
Santa Monica Municipal Code Section 6.49 are included as Attachment B. For
example, the existing Section 6.49.040(b) requires franchises to be awarded through a
competitive bidding process initiated through a request for proposals issued by the City.
Under the recommended new taxi regulations, Santa Monica will no longer have a
competitive bidding process and will only grant a franchise to a taxicab company that is
substantially located in the city and meets requirements consistent with State law.
As discussed above, Taxi! Taxi! is the only taxicab company currently locate d in Santa
Monica, and eligible for a franchise which is granted by ordinance. Staff will be
returning with updates to the terms and conditions of the franchise ordinance language
to be consistent with State law changes.
Changes to Taxicab Rules and Regulations
The rules and procedures for how the taxi franchise program is implemented have
historically been summarized in the Taxicab Rules and Regulations. This document is
being updated to reflect changes in State law and will be updated with Council direction.
The revised document will be reposted online and provided electronically to taxicab
companies for distribution to their drivers.
Taxicab Franchise Fees
The franchise requires each company to pay a franchise fee, a vehicle fee, and renewal
fees for vehicles and drivers. Council reduced fees in 2017 in response to operator
concerns. Table 4 summarizes the current fees that would be paid by Taxi! Taxi! based
on the current number of vehicles and drivers. As the only franchise holder, it is
projected that Taxi! Taxi! may need additional vehicles to meet demand. Table 4
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includes a projection of potential fees with the capacity of drivers and vehicles
anticipated to be needed to provide efficient taxicab service.
Table 4. Taxicab Franchise Fees
Fee Quantity
(current)
Total
(current)
Quantity
(projected)
Total
(projected)
Franchise Fee $5,000 1 $5,000 1 $5,000
Vehicle Fee $452 39 $17,628 50 $22,600
Renew Vehicle Fee $61.62 39 $2,403 50 $3,081
Driver Permit
Renewal Fee
$48 50 $2,400 70 $3,360
TOTAL REVENUE $27,431 $34,041
The current and projected revenue would not recover the full cost of administering the
taxi program. Just one taxicab company will be subject to the fees, resulting in
substantially reduced revenue. While program administration will be reduced, reductions
are not strictly proportional to the number of companies or vehicles. The incremental
resources to regulate additional companies is reduced, but not baseline program
administration. However, increasing fees is not recommended a t this time. Taxicab
services continue to meet the needs of specific users, taxicab revenue has been on the
decline for the past six years and the future of the taxicab industry is still uncertain even
with new state regulations.
Next Steps for Taxicab Program
1. Return to Council by November 13, 2018 to propose extending Taxi! Taxi!’s
franchise ordinance for another 5 years with changes that complies with State
Law.
2. Return to Council by or before November 27, 2018 to propose revisions to
applicable administrative citation fines consistent with State law.
3. Implement the regulatory and administrative changes to the taxicab program.
4. Issue administrative rules no later than December 31, 2018.
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Financial Impacts and Budget Actions
Staff anticipates revenues to decrease by approximately $79,860 due to the reduction in
the number of permitted taxicab companies allowed to operate in Santa Monica.
Revenues will be adjusted during FY 2018-2019 Mid – Year Review.
Prepared By: Cheryl Shavers, Senior Administrative Analyst
Approved
Forwarded to Council
Attachments:
A. Major Provisions of State Taxi Legislation
B. Ordinance - PCD - Taxicab - 10232018
C. Resolution - PCD - Taxicab Fees - 10232018
D. Written Comments
E. Powerpoint Presentation
Aw ard of Franchise
Council Item
November 13, 2018
Introduction
Ø City Council recently amended Santa Monica
Municipal Code Chapter 6.49 in compliance with
State law.
Ø Current Franchise Agreements will terminate
effective January 1, 2019.
Ø State law allows Santa Monica to regulate taxicab
companies that meet the definition of being
“substantially located” in the city.
Current Franchisees
Ø Bell Cab, Independent, and Yellow Cab do not
meet the definition of “substantially located”.
Ø Ta xi! Taxi! is the only taxicab company that
currently meets the definition of “substantially
located”.
Current Franchisees
Company Business
Location
Areas Served
Bell Cab Hawthorne LA, WH, Redondo
Beach,Manhattan
Beach, PV, Rolling
Hills, ES, Hawthorne,
and Lawndale.
Independent Los Angeles San Pedro to Granada
Hills, Los Feliz to
Malibu, LA, BH, WH.
Taxi! Taxi!Santa Monica Santa Monica
Yellow Cab Gardena LA, Bel-Air, Century
City, Hollywood,
Brentwood, Pacific
Palisades, Calabasas,
Inglewood
Requirements in Franchise Agreement:
1.Maintain “substantially located” status;
2.Establish fares, fees, and rates;
3.Participate in pull-notice program;
4.Financial responsibility
5.Safety and disabled access and training program;
6.Ve hicles in safe operating condition and pass City inspection;
7.Address where documents may be inspected; and
8.Driver fingerprint based criminal history check and
mandatory drug/alcohol testing program.
Ø Major modification to Ta xi! Taxi! franchise
agreement is their responsibility to determine
the number of vehicles in their fleet.
Taxi! Taxi! Franchise Agreement
Requirements
Ø Fees to remain the same.
Ø Reduction in revenue of $79,960 due to number of
permitted companies.
Revenue and Fees
Fee Quantity
(current)
Total
(current)
Quantity
(projected)
Total
(projected)
Franchise Fee $5,000 1 $5,000 1 $5,000
Vehicle Fee $452 39 $17,628 50 $22,600
Renew Vehicle Fee $61.62 39 $2,403 50 $3,081
Driver Permit Renewal Fee $48 50 $2,400 70 $3,360
TOTAL REVENUE $27,431 $34,041
Ø Return to Council in January 2019 to propose
revisions to administrative citation fines consistent
with State law.
Ø Implement regulatory and administrative changes.
Ø Update Administrative Rules and issue no later than
December 31, 2018.
Next Steps
Recommendation
Ø Modify and extend Ta xi! Taxi!’s current franchise
for five years to December 31, 2023