The Taxi Permit Cap is Lifted

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Nov 11. 2014 (San Diego) The San Diego City Council passed the end of ordinance 500-02, which lifts the cap on taxi permits for the city of San Diego. What was passed will prohibit vehicles in the taxi fleet that are over 10 years. It will also prohibit operators from using vehicles with a salvage tittle. It will allow both citizens and immigrants to apply. It will permit operators to apply with six months experience in the business, and it will become effective 30 days after the Metropolitan (MTS) Transit Board passes it though their board.

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This is not the first time that San Diego flirts with an open system. In 1979 the city had no cap. According to staff, there were 928 permits, and it did increase competition, but also increased overcrowding at key areas such as the Airport.

This time the city is trusting that technology, such as GPS, will help to avoid some problems. We are also in a very different competitive environment with Uber and Lyft, which are private services not as highly regulated as the Taxi Industry.

Moreover, there were problems and a moratorium was started in 1984. That restrained growth in the industry and as of 2000 there was an experimentation with very limited number of permits that were granted. Because of this, the drivers and United Taxi Workers of San Diego, said that permits entered a black market where they were bought and sold for upwards of a $100,000 dollars in some cases.

MTS will continue to administer the program. This includes things like safety checks. What is also interesting is that one of the arguments made by the permit holders is that the system is working right now and that we do not need any more taxis. According to the numbers from the city, we have 992 permit holders in the city. In 1984 we had 928. The growth does not match the growth of the city’s population.

Supporters included a study titled “Driven to Despair” done by the Sociology Department at San Diego State and the Center for Policy Initiatives. Professor Jill Esbenshade told council that 90 percent of drivers in the city are lease drivers, who earn less than $5 an hour on average. There is practically no health insurance. The current system encourages drivers to drive while sick or tired. This alone poses a safety risk, and finally since the permits are bought and sold in the open market, the leases to drivers are extremely high.

However, the owners brought out the big guns. Not only did Tony Young, former President of the City Council, and currently a lobbyist, and the Chamber of Commerce came to bat for the owners. They also brought Alfred LaGasse, Chief Executive Officer of the Taxicab, Limousine and Paratransit Association (TLPA).

LaGasse explained to the council that they were about to make a serious mistake. He said that large cities cannot function with this system and that using Milwaukee as an example was silly. He accused the council of not having a good institutional memory.

In the end the council passed this eight to one with Council member Lorie Zapf the lone dissenter. Golden Hall, where the hearing was held, exploded into screams of USA, USA, USA, from the drivers, and two young women from the owners said, “tell her (Marti Emerald) she is making a mistake.”

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Though one of the drivers hugged one of the owners, hopefully as a sign of the needed reconciliation to come.

Outside the celebration continued, and the drivers in a raucous celebration welcomed Emerald and also Scott Sherman. Both were surrounded and thanked by drivers, some with tears in their faces. In the middle Reporting San Diego was able to ask Emerald about the future.

We asked what if the owners decided to sue? She was emphatic, “I would suggest they work with their drivers to make a good deal for everybody.” Emerald also said that this change would make the industry far more open and fair for everyone.

Sherman told Reporting San Diego that the Drivers would soon learn what it takes to create a business, which is not easy. But this was opportunity. David Alvarez echoed this by stating that this was now a way “to achieve the dream.”

Twitter: @nadinbrzezinski

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Categories: City Hall Politics, Taxis

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