City Council
Report
City Council Meeting: November 13, 2018
Agenda Item: 7.E
1 of 5
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 2 of 5
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 3 of 5
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 4 of 5
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 5 of 5
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