City Council Meeting: November 9, 2010
Agenda Item: 9-A
To: Mayor and City Council
From: Carol Swindell, Director of Finance
Subject: Award of Taxicab Franchises
Recommended Action
Staff recommends that City Council:
1) Hold a Public Hearing and Introduce for first reading ordinances granting franchises to Bell Cab Company, Independent Taxi Owners Association, Metro Cab Company, Taxi Taxi, and Yellow Cab Company;
2) Adopt the attached resolution setting annual taxicab franchise fees and taximeter rates; and 3) Adopt the attached resolution setting the penalty structure and schedule of fines.
Executive Summary
A 2008 study by Nelson\Nygaard Consulting Associates of taxicab operations in Santa Monica found that the City’s open-entry taxicab permitting system allowed the operation of too many cabs for the market, and prevented the City from reducing vehicle emissions created by taxicabs, setting uniform fares, enforcing requirements that taxicab companies meet specific operating standards, and providing discounts for seniors and persons with mobility impairments. Based on the study’s recommendations, on July 28, 2009, Council adopted an ordinance establishing a franchise-based system for the regulation of taxicabs, which limits the number of taxicab companies to no more than eight companies, limits the total number of vehicles in the taxicab fleet to 250, requires franchisees to meet standards for their vehicles and drivers, and 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, with a response deadline of 3:00 pm on March 19, 2010. Thirteen qualified proposals were received and evaluated based on the criteria specified in the ordinance and the RFP. Based on the evaluation, staff recommends the award of franchises by ordinance authorizing the operation of 50 vehicles each to Bell Cab Company, Independent Taxi Owners Association, Metro Cab Company, Taxi Taxi, and Yellow Cab Company, for a citywide total of 250 taxicabs. The attached resolution sets the annual taxicab franchise fees and rates and reflects amounts published in the Request for Proposals (RFP) document. The second attached resolution sets the penalty structure and penalties for violation of the taxicab rules and regulations.
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Background
In October 2006, the Task Force on the Environment recommended to City Council that it direct staff to develop an ordinance initiating a franchise system and awarding franchises only to taxicab companies whose fleets met specific emission and mileage standards. At their February 10, 2009, meeting City Council commented on the excessive number of taxicabs, especially in the downtown area, and the need to reduce their impact on the City and on the environment. The City also received complaints regarding taxicabs: cruising for business, poor customer service from drivers, confusing and high fees, lack of discounted services for senior and disabled residents, and taxicabs with Santa Monica permits operating illegally as “bandit” taxis in Los Angeles and other cities.
Traffic is an increasing concern and in the 2009 resident survey, traffic continued to be at the top of the list of issues of most concern to Santa Monica residents. Limiting the number of taxicabs and establishing enforceable standards would promote the City’s sustainability and traffic management goals.
In 2008, the City retained the services of Nelson\Nygaard to assess options for regulating taxicab operations. The study concluded:
· Santa Monica has too many taxicabs and too many taxicab companies for the population; · The City’s present open-entry form of regulation, which relies on market forces, does not ensure either quality taxicab service or a healthy taxicab industry; · The City should establish a taxicab franchise system which uses a competitive Request For Proposals (RFP) process to award franchises to at least four but no more than eight cab companies, each with a minimum fleet size of at least 25 vehicles, and which limits the total number of authorized cabs to between 200 and 300; and
· Franchised taxicab companies should be required to meet financial, technical and service standards for themselves, their vehicles and their drivers as a franchise condition in order to ensure quality services.
On July 28, 2009, Council adopted an ordinance establishing a franchise-based system for the regulation of taxicabs, which limits the number of taxicab companies to at least one but no more than eight companies, limits the total number of vehicles in the citywide taxicab fleet to 250, requires franchisees to meet standards for their vehicles and drivers, provides for rules/regulations for enforcement of franchise requirements and be self-supporting through franchise, vehicle permit and driver permit fees.
Discussion
On January 14, 2010, staff released a Request for Proposals (RFP) (Attachment A) for taxicab franchises and held a pre-proposal conference on January 21, 2010, which was attended by representatives of 33 taxicab firms/operators. Two subsequent rounds of written questions and answers (Attachment B) clarifying the RFP requirements were conducted and the initial response Public Hearing & Award of Taxicab Franchises - City of Santa Monica https://www.smgov.net/departments/council/agendas/2010/20101109/s2... 2 of 14 7/7/2019, 11:38 AM
deadline of February 22, 2010 was extended to 3:00 pm on March 19, 2010, to provide all potential responders adequate time to meet the RFP requirements. Thirteen proposals were received by the RFP response deadline.
Evaluation
An interagency committee evaluated the 13 proposals. The evaluation team included five members who scored and rated all aspects of the proposal and included two representatives from the Finance Department, one representative from the Office of Sustainability and the Environment, one representative from the Police Department, and one representative from the City of Los Angeles Department of Transportation Taxicab Regulation Division. The evaluation team also included other experts who were consulted regarding specific aspects of the proposal and included a representative from the Pier Restoration Corporation, Bayside District, additional Police Department staff, and the Human Services Division. The five raters evaluated the proposal based on the following criteria, contained in SMMC 6.49.040(b) and detailed in the RFP:
· Proof of financial viability, demonstrating ability to provide taxicab services in compliance with City ordinances and regulations and the bidder’s proposal. (20%) · Experience in providing taxicab services during the last 10 years, including demonstrated quality of service and safety. (20%)
· Proposed business and management plan. (20%)
· Fleet composition, including age and condition of taxicabs, annual minimum number of vehicles meeting Ultra Low Emission Vehicle and Super Ultra Low Emission Vehicle (ULEV/SULEV) and other low-emission standards. (15%)
· Local preference. (8%)
· Character of operator’s owners/members/principals/partners, verifying criminal/civil record, taxicab regulatory, franchising, licensing, insurance and litigation history. (5%) · Proposed discount fares for senior and mobility impaired customers. (3%) · Dispatch and communication system. (3%)
· Driver training, testing, supervision and life/health/disability benefit plans. (3%) · Operator/driver financial relationships including leasing, fees, memberships and all other relationships. (3%)
The evaluators independently reviewed each proposal prior to convening over two days to discuss and review the proposals in detail. During the discussion period, technical expertise and input was provided by subject matter experts, in areas including environmental and accessibility. Each evaluator calculated a composite score for each company using the score sheet (sample in Public Hearing & Award of Taxicab Franchises - City of Santa Monica https://www.smgov.net/departments/council/agendas/2010/20101109/s2... 3 of 14 7/7/2019, 11:38 AM
Attachment C). The final weighted composite score was entered into an Excel spreadsheet to calculate the total composite score (Attachment D). In a manner consistent with other City RFP processes, notes and individual scores from each evaluator were not retained. Also consistent with other City processes, only one original file copy of each proposal received was retained. Staff surveyed other cities regarding taxicab RFP processes and found a wide range of methods to communicate the resulting recommendation. Despite the wide variety of methods, one constant was the communication of composite scores and not individual rater comments or evaluations. The attachments to this report represent the material retained.
In summary, the 13 proposals received were:
TABLE 1
Taxicab Franchise Proposal Summary
PROPOSER # Current
SM
Taxicabs
# Proposed
SM Taxicabs
Now operating in
SM?
Based in
SM?
All Yellow Taxi
Inc
6 30 Yes No
Bell Cab 43 60 Yes No
Beverly Hills
Cab Co
29 80 Yes No
Euro Taxi 28 60 Yes Yes
Independent
Taxi Owners
Assoc.
12 50 Yes No
LA Checker Cab
Co/VIP Yellow
0/40 40/40 No/Yes, under
new joint venture
No
Lady's Yellow
Cab dba Yellow
United
27 40 Yes Yes
Metro Cab Co. 20 100 Yes Yes
SM Yellow Cab 9 30 Yes No
San Gabriel
Transit Inc/City
Cab
0 36 No No
SMCC Yellow
Cab
0 100 No No
Taxi Taxi* 59 100 Yes Yes
Yellow Cab 40 60 Yes No
*TMAT Corporation also includes Lotus Taxi with 6 licensed taxis.
As of March 2010, the 13 proposers operated 316 taxicabs in Santa Monica. Collectively, they proposed to operate a total of 826 taxicabs, more than three times the statutory maximum of 250 taxicabs permitted to operate by all franchise holders. Two proposers do not currently operate any cabs in Santa Monica. One additional proposer does not currently operate any taxicabs in the City Public Hearing & Award of Taxicab Franchises - City of Santa Monica https://www.smgov.net/departments/council/agendas/2010/20101109/s2... 4 of 14 7/7/2019, 11:38 AM
but put forth the formation of a new joint venture with a current operator, dependent on award of a franchise. Four proposals were received from operators with business operations currently based in Santa Monica.
Proof of Financial Viability
Proposals were evaluated on submitted documentation of equity funding, debt funding, balance sheets, cash flow statements, income statements, financial plan for operation of the proposed level and scope of services. Firm structure was reflective of the taxicab industry in general with proposals from cooperatives/associations, in which vehicles are owned by members and either operated by the member owner or leased to an independent contractor driver, and firms in which one or more partners own the vehicles and lease them to independent contractor drivers. Members of cooperatives/ associations are assessed annual fees to cover the organization’s operating costs and share in the organization’s profits. Taxicab drivers are rarely, if ever, bona fide employees.
Almost without exception, taxicabs are either driven by the vehicle owner or leased to an independent contractor taxicab driver. The recommended firms most clearly demonstrated financial capacity within their organizational structure to meet the franchise requirements, with financing commitments where necessary to meet expansion of their present fleet or acquisition of new technology.
Experience Providing Taxicab Services
Proposals were evaluated on submitted documentation of current ownership/ management’s experience in providing taxicab service during the last ten years in any jurisdiction where franchises/permits were held, scope of current taxicab operations and references from permitting jurisdictions. All but two proposers were experienced in providing taxicab services in Santa Monica. The two proposers which have not operated previously in Santa Monica have significant experience in other jurisdictions in Los Angeles and Orange Counties. The recommended firms demonstrated a history of quality operation both in Santa Monica and in other jurisdictions.
Proposed Business and Management Plan
Proposals were evaluated on submitted documentation of organizational structure and internal relationships of owners/members to leasing drivers, experience of management personnel, procedures for discipline of members and lease drivers, operating facilities and their location, staffing plan, experience of management personnel, vehicle maintenance and storage, plan for maintaining required taxicab service levels and procedures for addressing service deficiencies, vehicle maintenance personnel/ facilities, disciplinary program for drivers/members/employees, complaint resolution procedures, accident tracking/investigation, record keeping programs, and programs or agreements which might limit Santa Monica service availability.
Not all proposers provided business plans which clearly demonstrate compliance with the City regulations or the ability to provide the required increase in levels and quality of service. Several Public Hearing & Award of Taxicab Franchises - City of Santa Monica https://www.smgov.net/departments/council/agendas/2010/20101109/s2... 5 of 14 7/7/2019, 11:38 AM
proposals specified management personnel with minimal relevant experience in the taxicab industry. The recommended firms demonstrated their ability to provide appropriate and experienced staffing, meet technological requirements, monitor and enforce a uniform standard of service from all drivers, maintain detailed records and provide meaningful reports to the City, and to fund their proposed level of operation.
Fleet Composition
Proposers were required to specify a fleet of at least 25 vehicles, with a specific number of proposed vehicles in each of the SULEV/ULEV/other categories of fuel efficiency/emission rating.
In addition, each proposal was required to specify a number of wheelchair accessible vehicles equal to at least 10% of the proposed fleet size. Wheelchair accessible vehicles were not subject to the fuel efficiency/emission ratings requirements because the required side-loading vans are not currently available in economically viable high fuel efficiency/low emissions models. Proposed fleets ranged from 30 to 100 vehicles, with all proposals based on expansion of their existing fleet, no matter its present size in Santa Monica. Proposers were required to provide a specific deployment schedule with the full fleet in operation at the end of five months. The evaluation committee gave the most weight to those proposals which both proposed fleets with greater composition of the most fuel efficient/least polluting vehicles and with the most aggressive deployment schedule. In order to ensure that all franchise holders have an equal opportunity to access the available market and that no franchise holder has an advantage based on the number of vehicles available for service over other franchise holders, staff recommends that the number of vehicles authorized for each of the five recommended franchises be set at an individual fleet size of 50 vehicles, of which 5 are to be wheelchair-accessible vehicles. The minimum vehicle classification mix for each franchise fleet, as shown in Table 3 below, is recommended on the basis of the original fleet mix stated in the proposals submitted in response to the RFP, as summarized in Table 2.
TABLE 2 - ORIGINALLY PROPOSED FLEET
TOTAL
FLEET
SULEV ULEV Wheelchair
Accessible
Bell Cab 60 16 38 6
Independent Taxi Owners Assoc 50 45 0 5
Metro Cab Co. 100 56 29 15
Taxi Taxi 100 50 40 10
Yellow Cab 60 25 25 10
TOTAL PROPOSED VEHICLES 370 192 132 46
TABLE 3 - RECOMMENDED FLEET
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TOTAL
FLEET
SULEV ULEV Wheelchair
Accessible
Bell Cab 50 16 29 5
Independent Taxi Owners Assoc 50 45 0 5
Metro Cab Co. 50 45 0 5
Taxi Taxi 50 45 0 5
Yellow Cab 50 25 20 5
TOTAL RECOMMENDEDVEHICLES 250 176 49 25
The raters scored each company based on the proposed fleet distribution between SULEV, ULEV and accessible vehicles (Table 2). In support of the Task Force on the Environment and Council’s priorities, the recommended total fleet (Table 3) would consist of 70% SULEV or higher standard vehicles, 20% ULEV vehicles, and 10% wheelchair accessible vehicles. Franchisees will be strongly encouraged to increase the number of SULEV or greater class vehicles in their individual fleets. The franchise ordinance provides for the City and recommended taxicab companies to negotiate the final fleet composition and provides for the final ratio between SULEV and ULEV to not go below the original proposed fleet composition.
By recommending an equal fleet size for each of the five recommended franchise firms, no one firm is given an advantage in size over another and all franchised firms are offered an equal opportunity to serve the Santa Monica taxicab customer. The recommended fleet size also represents an increase for all but one firm and eases the financial burden which might be encountered by those firms which proposed the greatest expansion of their existing fleet.
Local Preference
Each proposer was required to declare the address of their principal business location as a means of determining whether the firm’s principal location was in Santa Monica or another location. Firms which declared a Santa Monica location as the principal place of business as were provided the full local preference point advantage in the final scoring over firms declared principal business locations outside of Santa Monica.
Character of Operator’s Owners/Members/Principals/Partners Proposals were evaluated on submitted and other documentation accessed by the City of criminal convictions, anti-competitive practices, violations of state/federal laws regarding false or misleading advertising, revocation/suspension of business license, violation of operator licenses/franchises, litigation against franchising authorities, and citations of operators/drivers for operating in jurisdictions without required permits/licenses (bandit cab operations). Through criminal background checks conducted by the California Department of Justice fingerprinting review, all proposers demonstrated that their ownership and principal investors of record were of good character and Public Hearing & Award of Taxicab Franchises - City of Santa Monica https://www.smgov.net/departments/council/agendas/2010/20101109/s2... 7 of 14 7/7/2019, 11:38 AM
background, appropriate to the operation of a taxicab franchise. Of the recommended firms, most demonstrated compliance with regulatory requirements jurisdictions in which they were authorized to operate.
Proposed Discount Fares
All proposers specified some form of fare discount for senior citizens (persons age 65 or older who present proof of age, such as a DMV ID card) and persons with disabilities (persons with a Los Angeles County Transit Operators Association [LACTOA] Metro disabled ID card). While proposed discounts ranged from 10% to 25%, some proposed discount schemes were determined to be problematic. Several required advance purchase of a pre-paid “debit” card with no information as to how the card was to be read or validated. One committed to accepting discount media for which the City would be required to fund reimbursement. Others placed the full burden of the mandated discount on the driver with no support or reimbursement from the franchise holder. These approaches fail to guarantee a transparent fare discount that is easily understood by the target customer groups and is easily monitored by the franchise holder and the City.
The evaluation committee recommends that a discount of 10% off of the metered fare for eligible passengers, with a reimbursement to the driver by the franchise holder, should be required of all franchise recipients. The committee determined that higher discounts are not financially viable without funding by some entity other than the franchise holders and their independent contractor drivers.
Dispatch/Communication System
Proposals were evaluated on submitted documentation of the taxicab companies’ staffing/deployment plan, dispatch and communication systems, procedures for dispatching vehicles and capturing records of services operations, dispatch facilities and locations, technology for serving speech/hearing impaired customers and non-English speaking customers, and procedures and formats for reporting service data to the City. Digital dispatching systems are a required feature of the RFP and all proposers committed to acquiring this technology if it was not already in place in the company’s operations. Additionally, digital systems utilize GPS to provide the most efficient dispatching of available taxicabs and also improve the safety of passengers and drivers by providing the vehicle’s location to the central dispatch. The recommended firms more clearly demonstrated their understanding and use of this technology and its ability to both communicate with drivers from a centralized computerized dispatch location and to provide a backup communication system in case of emergencies or failure of the digital system.
Driver Training, Testing, Supervision and Benefit Plans Proposals were evaluated on submitted documentation of driver selection and training process, proposers’ English language testing procedures, driver training and re-training programs, and driver and employee benefit plans and costs. Taxicabs are either driven by the vehicle owner or leased to Public Hearing & Award of Taxicab Franchises - City of Santa Monica https://www.smgov.net/departments/council/agendas/2010/20101109/s2... 8 of 14 7/7/2019, 11:38 AM
an independent contractor taxi driver. Taxicab drivers are rarely, if ever, bona fide employees.
None of the proposals stated that they provide health insurance benefits to drivers. All but one of the recommended proposers provide a level of accidental death/disability benefit with some medical benefit at either the proposer’s cost or, in the case of those with the highest benefit, a nominal cost (e.g. $20 per month) to the driver. The recommended firms all had specific procedures for soliciting, selecting, hiring and training drivers and complying with City and state requirements for drug screening.
Operator/Driver Financial Relationships
Proposals were evaluated on submitted documentation of leasing costs and other fees charged by the operating entity to vehicle owners and taxi drivers, as well as any contribution required of drivers towards the cost of discounted fares. Membership entities assess their member’s annual fees to support the operation of the entity and share back any annual profit. Ownership entities, such as LLC’s and partnerships, own the firm’s assets and derive income from the lease payments for use of the vehicle and its equipment. Leasing fees charged by the Santa Monica-based firms were consistently higher than those charged by firms based elsewhere, but were within the range of fees generally charged in the industry.
Race, Ethnicity or Nationality of Taxicab Companies’ Ownership or Personnel The race, ethnicity, or nationality of owners, officers, members, or other personnel of the taxicab companies was not a factor in the evaluation process and played no role whatsoever in the evaluation committee’s recommendations for taxicab franchises. The evaluation committee was unaware of the specific race, ethnicity or nationality of individuals linked to specific taxicab companies until such race, ethnicity or nationality was pointed out by outside individuals and organizations subsequent to the evaluation process, and well after the publication of the taxicab companies recommended for an award of a franchise in the City.
Taxicab Rules
Section 6.49.020 of the Santa Monica Municipal Code authorizes the Santa Monica Police Department to adopt rules and regulations consistent with and necessary to implement Chapter
6.49 of the Code. In developing its taxicab franchise system, the City looked to the established taxicab rules in nearby franchised cities, including Los Angeles and West Hollywood, as the basis for developing the City’s rules. The rules were also reviewed against the adopted ordinance and the Santa Monica Municipal Code and to ensure that the rules furthered the stated goals for establishing the franchise system, including the goals of providing consistent, safe, high quality taxicab service; decreasing the environmental impact of taxicabs; and providing the opportunity for all franchised taxicab companies to have fair and equitable business practices.
Penalties for Violations of Taxicab Rules
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Consistent with Section 6.49.150 of the Santa Monica Municipal Code, a progressive penalty structure is established which:
· Sets a specific penalty for violation of each of the Taxicab Rules. Depending on the seriousness of the rule violation, penalties range from monetary fines to revocation or cancellation of the vehicle permit, driver permit, or franchise operations. · Imposes progressively increased penalties for repeat violations of the same rule within a set time period.
· Imposes penalties on both taxicab drivers and the franchisee for driver violations as a means of ensuring that franchisees exert control over and take responsibility for their drivers’ actions.
A taxicab driver or franchisee that has been cited for a violation of a taxicab rule or regulation may request an administrative hearing before a hearing officer, as set forth in Santa Monica Municipal Code Section 6.49.150.
Other Remedies
Franchisees are also subject to suspension of their taxicab operations or revocation of their franchise, and taxicab drivers are also subject to suspension or revocation of their driver’s permit, for violations of the terms and conditions of the franchise ordinance, and Santa Monica Municipal Code Chapter 6.49, as set forth in Sections 6.49.050 and 6.49.070(h). Notice and a hearing in accordance with the hearing procedures set forth in Chapters 6.16 and 6.49 will precede any action of suspension or revocation. Violations of Chapter 6.49 may also be prosecuted as infractions or misdemeanors in Los Angeles Superior Court, as set forth in Section 6.49.140.
Taxicab Franchise Fees
On June 30, 2009, staff recommended that the franchise fee and vehicle and driver permit fees be established at rates both comparable to surrounding cities as well as at a level that fully recover the costs of administering the franchise operations.
At that time, staff presented the following fees:
Annual franchise fee per taxicab firm: $10,000
Annual vehicle permit fee per taxicab: $ 875
Annual driver permit fee per driver: $ 150
After receiving input from Council and in order to better encourage the use of environmentally superior vehicles, staff developed a new proposed annual franchise fee schedule that was published in the RFP documents, as follows:
Annual franchise fee per taxicab firm: $5,000
Annual SULEV/ULEV/Wheelchair vehicle permit fee: $1,200 Annual non-SULEV/ULEV/Wheelchair vehicle permit fee $1,800 Public Hearing & Award of Taxicab Franchises - City of Santa Monica https://www.smgov.net/departments/council/agendas/2010/20101109/s2... 10 of 14 7/7/2019, 11:38 AM
Annual driver permit fee $ 150
The revised fee structure was developed to incentivize the use of low emission vehicles and is expected to generate approximately the same revenue as that previously recommended and encourages the use of SULEV, ULEV and accessible vehicles.
Taximeter Rates
The Nelson\Nygaard Taxicab study generally set forth two recommendations for setting taxicab rates: (1) set a maximum rate; or (2) set a rate that is equal to LADOT which is widely used in the sub region. Staff recommends that the most effective taxicab meter rate would be option 2, which would minimize confusion for the public that often travels between jurisdictions and for enforcement to ensure a consistent rate. Therefore staff recommends the following taximeter rates, which are consistent with the current LADOT 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) The study further recommended that passengers be given the option of electing at the beginning of a trip to either the Bob Hope Airport or Los Angeles International Airport (LAX) to pay the metered rate or a flat rate, and with different flat rates for travel to LAX originating north or south of the I-10 Freeway. Staff recommends the following airport flat rates:
North of I-10 to Los Angeles International: $45
South of I-10 to Los Angeles International: $35
Santa Monica to Bob Hope Airport: $75
Response to Communications
Staff received a number of letters with questions pertaining to the RFP process as well as the recommended allocation of taxicabs. These letters and all communications received are attached.
Alternatives
Council has several alternatives available for the award of taxicab franchises:
1) Adopt staff’s recommendation as presented in this report. No additional action would be required by Council beyond adoption of the attached 5 franchise ordinances on second reading at the next Council meeting. Upon each taxicab company’s consequent written acceptance of the awarded franchise, the five franchises could be operational beginning January 3, 2011.
2) Modify the distribution of the 250 taxicabs among the five recommended taxicab companies. If Council modifies the distribution, Council would need to modify the attached 5 franchise ordinances to reflect the desired distribution of the 250 taxicabs for each taxicab company. Staff would confirm with the affected taxicab companies their interest in securing a franchise under the revised number of taxicabs they would be authorized to operate in the City. No additional action would be required beyond adoption of the attached five franchise Public Hearing & Award of Taxicab Franchises - City of Santa Monica https://www.smgov.net/departments/council/agendas/2010/20101109/s2... 11 of 14 7/7/2019, 11:38 AM
ordinances on second reading at the next Council meeting. Upon each taxicab company’s consequent written acceptance of the awarded franchise, the five franchises could be operational beginning January 3, 2011. 3) Direct staff to return with a recommendation to award up to three additional franchises to additional taxicab companies who submitted proposals in response to the RFP, for a total of up to eight taxicab franchises, and redistribute the 250 taxicabs among the eight recommended taxicab companies. This option would require Council to adopt another resolution declaring its intent to grant franchises, naming up to eight proposed grantees, and notice a new public hearing to introduce for first reading and then adopt on second reading up to eight franchise ordinances awarding franchises to eight taxicab companies. 4) Increase or decrease the maximum number of taxicabs in the City, which number is currently 250 taxicabs, by amending the law. This option would require Council to notice and hold a public hearing to introduce for first reading and then adopt on second reading an ordinance modifying Ordinance No. 2292 (CCS), which created the taxicab franchise system, and Santa Monica Municipal Code Section 6.49.040(d), which states that the “maximum number of taxicabs permitted to operate under the terms of all franchises granted by the City shall not exceed two hundred and fifty taxicabs, which number may be adjusted by City Council from time to time.” Council then has two options:
(i) Modify the distribution of the new total number of taxicabs among the five recommended taxicab companies. This option would require Council to adopt another resolution declaring its intent to grant franchises to the five taxicab companies, and notice and hold a public hearing to introduce for first reading and then adopt on second reading the five attached franchise ordinances with the modified distribution of the new total number of taxicabs for each taxicab company. (ii) Direct staff to return with a recommendation to award up to three additional franchises to additional taxicab companies who submitted proposals in response to the RFP, for a total of up to eight taxicab franchises. This option would require Council to adopt another resolution declaring its intent to grant additional franchises and notice and hold a new public hearing to introduce for first reading and then adopt on second reading up to eight franchise ordinances awarding franchises to eight taxicab companies.
5) Increase or decrease the maximum number of taxicabs in the City in accordance with Santa Monica Municipal Code Section 6.49.040(f) or 6.49.040(e), respectively. This option would require Council to notice and hold a public hearing to make certain findings that more or less taxicabs are required in the City. Council then has the two options as set forth in number four above.
6) Decline staff’s recommendation; provide further direction to staff in relation to additional evaluation criteria and direct staff to complete a new RFP process for taxicab franchises, which would allow for submission of proposals by taxicab companies that did not submit a proposal in the first RFP process. 7) Decline staff’s recommendation and maintain the current open-entry taxicab system. This option would require Council to notice and hold a public hearing to introduce for first reading and adopt on second reading an ordinance repealing Ordinance No. 2292 (CCS), which created the taxicab franchise system.
Next Steps
If the attached ordinances are adopted on second reading, the recommended franchisees have 10 days following adoption to file with the City Clerk a written acceptance of the terms of the franchise. (See Article XVI, Section 1603, of the Charter.) If one or more companies decline to accept the franchise, staff will return to Council with a reallocation of remaining taxicabs to those awarded firms which have accepted the franchise to bring the number of authorized taxicabs to 250.
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On January 3, 2011, only franchised companies will be allowed to operate within Santa Monica.
Staff is currently developing the details of the six month implementation period and will engage the awarded firms, if any, in finalizing the transition plan. Staff will provide quarterly updates on the implementation of the taxicab franchise program during the first year. After one year, staff will return to Council with an assessment and review of the first year of the taxicab franchise system and will be prepared to propose changes to the regulations, administration or number of cabs, if warranted.
Financial Impacts & Budget Actions
Administration of the proposed franchise system will consist of annual review of the franchiseholder’s performance, on-going processing of vehicle and driver permits, and supervision of the vehicle inspection/certification process by a City-designated facility. The full cost of these functions will be supported by the franchise fees and vehicle and driver permit fees paid by the franchise holders.
Prepared by: Pamela McGarvey, Revenue Collection Administrator Approved: Forwarded to Council:
Carol Swindell
Director of Finance
Rod Gould
City Manager
Attachments:
A. Request for Proposals for Taxicab Franchises
B. Request for Proposals Questions and Answers
C. Sample Score Sheet
D. Composite Score
E. Previous Council Items
a. February 10, 2009 – Study Session on Regulation of Taxicab Operations b. March 3, 2009 – Proposed moratorium on new taxicab permits (not approved) c. June 30, 2009 – Ordinance to Establish Franchise System for Regulation of Taxicab Operations and Modifying Existing Provisions Applicable to Taxis and Vehicles for Hire
d. July 28, 2009 – Second Reading on Ordinance to Establish Franchise System for Regulation of Taxicab Operations and Modifying Existing Provisions Applicable to Taxis and Vehicles for Hire
e. November 10, 2009 - Taxicab Franchising RFP Evaluation Factors f. October 12, 2010 - Resolution of Intention to Grant Taxicab Franchises g. July 5, 2010 – Information Item - Additional Information on Taxi Franchise Selection Process
h. October 21, 2010 – Information Item - Additional Information on Taxi Franchises – Public Hearing & Award of Taxicab Franchises - City of Santa Monica https://www.smgov.net/departments/council/agendas/2010/20101109/s2... 13 of 14 7/7/2019, 11:38 AM
Taxicab Rules
F. Letters Received
G. Ordinances Granting Taxicab Franchises
H. Resolution setting the annual taxicab franchise fees and rates I. Resolution setting the penalty structure and penalties for violation of the taxicab rules and regulations
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