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February 28, 2007 10:14 PM UTC

2+2 = 7

  • 18 Comments
  • by: Colorado Pols

Anybody who has ever tried to find a taxi in Denver can certainly relate to a story in today’s Rocky Mountain News:

“I fight every day,” said [Psalm] Shaw, 34, who has used a wheelchair or crutches since being hit by a truck nine years ago. “It used to take me seven minutes to get to school. Now it’s one to two hours each way.”

She said cabs sometimes fail to arrive, and she’s sometimes still there when campus buildings have closed for the evening. “I get left out in the cold, and the dark,” she said. “They put me in danger and leave me exposed and vulnerable.”

Metro Taxi officials didn’t have a response Tuesday when asked why Shaw, who called for a cab at 1:18 p.m., was not delivered to her home until 3:36 p.m.

State Rep. Jerry Frangas, D-Denver, said similar complaints about poor taxi service by disabled and elderly consumers moved him to introduce a bill requiring the Public Utilities Commission to deregulate the taxi industry and issue unlimited operator certificates…

…”The bottom line is I want competition, because competition is good for Colorado consumers, and frankly I think it’s good for current and future cab companies,” said Frangas, whose House Bill 1114 is scheduled for hearing Thursday.

But an advocate for one of the three taxi companies serving the metro area warned that 21 cities that attempted taxi deregulation in recent decades met with disaster and soon re-regulated. “What happens when they deregulate cab services is we have a lot more cabs, but not much more business,” said Bill Imig, a lobbyist for Yellow Cab.

Whaaaaa?

One of the main ideas behind deregulating the taxi cabs is to create more competition and get more taxis on the street. But the Yellow Cab lobbyist says that even though there will be more taxis on the street, you actually won’t be able to use them. Which, of course, makes no sense at all – particularly when the cab companies can’t get taxis running correctly already.

The bill has drawn bipartisan support from the likes of Republican Rep. Spencer Swalm and Democratic Sen. Chris Romer, and a well-organized group of 200 cabbies descended on the State Capitol last week to do their own lobbying.

The cab companies are clearly making a last-ditch effort to save themselves from a huge loss of revenue if the industry is deregulated, but they may be in trouble if their best argument is to try to pretend that more is actually less.

Comments

18 thoughts on “2+2 = 7

  1. and that’s a city I assume is deregulated because there were something like 10 competing cab companies. I took taxis a few times (usually to the airport but sometimes to get across town when my wife had the car) and never had to wait more than 15 or 20 minutes (and that was when the traffic was bad, or there was some other reasonable explanation).

    I’ve never taken a Denver cab and it sounds like I should continue to avoid it unless this gets passed.

    1. The regulators should grant no more licenses to existing cab companies, because they all are abusing the market.

      New competitors are needed.

      Allow three or four new companies to enter the market. Make sure the companies are independent of each other and existing companies and that they are financially strong.

      Base license renewals on customer complaints. Too many complaints, and your licence is not renewed. Find a way to keep competitors from trashing each other’s reputations.

      If adding three companies and 100 cabs doesn’t solve the problem, add some more.

      If  cab rates were lower and cabs were easily available, more people would use them, expanding the market and bottomlines of the cab companies.

        1. The present cab system has a serious flaw.  It is the same one that I experienced many years ago working as a motorcycle courier in Los Angeles.  Because these companies, in reality, rent cars and dispatch services, they are under no compulsion to provide quality service, nor do they care how much money the cabbies make.

          In the case of my courier job, the limiting factor was how many two way walkie-talkies they had.  Otherwise, they hired anyone who met their specs: bike and insurance. The more people they had out there, the better their service.  Of course, we couriers ate it.

          I think that having too many cabbies in one company makes them desparate.  They refuse short trips because they NEED the long ones, always hoping that the next dispatch is to DIA.

        2. Why he often chooses to write simplistic platitudes at times is beyond me. He recently wrote that he was trying to stimulate debate but I know he’s capable of doing that without resorting to polarizing nonsense. Guess it just amuses him.

      1. when the barrier to entry is low and the available competitors are numerous. Your proposal keeps those benefits while alos respecting the public safety issues of “car for hire”. Very nice

  2. I keep waiting for one of these cab companies to get nailed by a lawsuit because someone called from a bar to get picked up, waited 2 hours, finally gave up and drove home with expected results….  We’ve already seen bartenders sued etc.  Its about time with Denver developing real big city traffic, public transportation, and infrastructure that they had big city like cab service.

  3. the whole point of regulating taxis in the first place is that customers often have no real opportunity to negotiate with cab companies, or even grow familiar with the local market.  And, when you have lots of consumers who aren’t knowledgable, inevitably, some companies will exploit customers.

    In contrast, in a regulated market, in theory, complaints can be directed to a regulator and improve the situation, without a full fledged lawsuit at customer expense.

    The problem may be that the PUC fell down on the job, and not that the market shouldn’t be regulated.

    If you want competition, it is easy enough to issue “must grant” taxi licenses to eligible companies.  We do essentially the same thing in most professions.  Real estate agents, for example, are regulated, but we don’t impose quotas on how many of them are permitted.  The same thing could be done in the taxi market.

      1. The cab companies are not interested in remaining regulated per se, they are interested in maintaining their oligopoloy.  If ohwillike’s suggestion were implemented, they would have the worst of both worlds – regulation and competition.

    1. Essentially the bill removes the “Public Convenience and Necessity” barrier to enter into the market.  The PUC still retains control over driver fares, safety, driver conduct, and inspection. 

      While I am personally in favor of full deregulation, this bill is certainly not that.  I don’t see how anyone could oppose this bill unless you were personally profiting from the outrageous leasing fees that the existing cab companies are charging the drivers.

      The cab industry can shout about the dangers of deregulation all they want, but no matter how many times they say it, this is not deregulation.

  4. My biggest complaint againt Denver cabs is the cost. If they were de-regulated pehaps the competition would get the rates down a bit.

    I’m a travel agent and I have traveled all over. Almost every time I take a cab someplace else I am struck at how little it costs compared to what we pay in Denver.

    When I was last in DC a couple of years ago, I really liked their flat rate zone system. If you knew what zone you were going to/from you always knew the rate. I would think a zone system would be easy to institute here.

    I also hate that it sometimes hard to use a credit card for taxis. You have make sure the dispatcher knows you plan to use plastic and even then they send you a “cash only” cab. If I need a cab it usually a last minute decision because I am running late and don’t have time for the bus. I don’t carry much cash on me so I rely on my debit card a lot. “Cash only” cabs serve me no purpose.

    1. ….as always:-)

      My family and I attended a national trade conference in DC a couple years ago and the zone fair felt right at the time. Thanks for confirming.

  5. HB 1114 is not deregulation. 1114 is only anti-monopoly.
    The cab drivers have put together an amazing coalition.
    This one is going to be close
     

  6. It’d help if the cab companies could provide some FACTS as to why deregulation was so bad, and what the “disasters” were that caused 21 cities to re-regulate after deregulation. That’s a pretty compelling statistic – but you know what they say about statistics.

    1. The study that Imeg is citing was one that was conducted by Price Waterhouse for the International Taxicab Foundation (trade org for the industry).  The methodology was horrendous and misstates facts.  The cities that they focused on typically had stagnant or shrinking populations.  Cities with growing populations, like Denver, have much better luck with dereg.  Still, Imeg misses the big point.  This is not deregulation as were the cities in the “study” he cites.  None of the 21 cities limited their actions to simply opening up entry barriers. 

      When you stand to lose obscene profit margins, I guess you begin to resort to any measure necessary.

  7. This man would sell his mother if he got enough money.

    I attended a community meeting back when we were changing from no-faul to tort insurance.  Bill was a flack for the insurance companies, which were, of coure, pushing to tort reform.

    Bill talked about how to cut car insurance costs.  One was to cancel your medpay, after all, now Kaiser and other providers will pick that up.  (For $60 a YEAR I should expose myself for lawsuits from passengers, etc.?)

    The other profound suggest was….OK, you ready for this?…..hold onto your hats at this moment of genius….

    Shop around.

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