CITY HALL — In a move that will dramatically reduce the number of cabs on Santa Monica streets, the City Council Tuesday awarded five taxi franchises and put a cap on the total number of cabs operating within the city at 250.

The council also unanimously approved a fare structure with maximums set for trips to regional airports. Cab companies will still be able to offer discounts or special deals, something which Mayor Bobby Shriver lobbied hard for and was accepted by his colleagues as a way for cab companies to differentiate themselves and compete in the new, closed market.

Those who received a franchise are: Bell Cab Co., Independent Taxi, Metro Cab Co., Taxi Taxi and Yellow Cab Co. Metro and Taxi Taxi are based in Santa Monica.

Cab operators were selected by a City Hall committee with preference given to those companies that had the financial capability, business plan and experience to provide quality service, said Don Patterson, who oversaw the selection process for City Hall.

The new franchise structure, which must be finalized by a second reading by the council, is expected to take effect Jan. 3, 2011 with cab companies given six months to meet requirements to operate a certain number of ultra-low and super-ultra-low emission vehicles.

Cab companies not awarded a franchise will no longer be able to pick up passengers in Santa Monica after that date.

“We are pleased our successful business model has been approved by the city,” said Ayman Radwan of Taxi Taxi. “We are extremely happy that we will be able to continue serving our community.”

The proposal for a franchise structure came after the Task Force on the Environment in 2006 recommended the development of an ordinance that creates a franchise system awarding licenses to companies whose cars meet certain emission and mileage standards. A study by Nelson/Nygaard Consulting Associates followed two years later, finding that at the time, there were 412 cars operated by 55 companies in the city.

That number grew to 522 permitted cabs, all for a city that has about 91,000 residents.

City officials felt the number of cabs was too high, creating gridlock Downtown while contributing to global warming. They were also concerned that drivers were not able to make a living wage because of too much competition. Some drivers were said to be making only $24,000 annually for working six days a week.

Dozens of cab company operators and drivers fearful of losing their jobs crammed into the City Council Chambers Tuesday, pleading with elected officials to start the franchise selection process over, alleging it was flawed and lacked transparency.

Groups representing Armenian-Americans said the process discriminated against cab companies owned by Armenians. Others called on the council to give more weight to local companies as opposed to those based in Los Angeles with multiple franchise licenses, increasing the likelihood that drivers from these companies will spend more time outside Santa Monica, leaving residents and visitors without enough cabs to get them around town. Many operators pleaded with the council to allow more cab companies to operate within Santa Monica. As part of the agreement, cab companies are required to have 50 cabs in service at all times.

“We’re still in shock,” Vrej Alvandian, president of Beverly Hills Cab Co. said following the council’s vote. “We thought the council was going to throw out the staff’s recommendation and start over. … I can’t believe it.”

While the council did not want to increase the number of franchises awarded, it did increase the total number of cabs allowed to operate in the city.

Initially city staff proposed a cap on cabs of 250, with each of the five franchises operating 50. However, after considerable debate the council directed city staff to come back in the next few weeks with a new cap of 300, awarding each of the five franchises 10 more cabs for a total of 60 each, but city officials said the extra cabs would be optional.

That was in large part a response to Taxi Taxi’s plea to be allowed to operate more than 50 cabs given that it currently has a fleet of over 60 and would therefore have to layoff drivers. While Taxi Taxi currently has more cabs than will be allowed, the other four who won franchises will have to bring up the number of cabs they operate to comply with the new rules.

“I don’t think it’s fair to downsize a company that’s been working so hard to grow in a sustainable way,” said Wendy Radwan of Taxi Taxi.

Councilmembers Terry O’Day and Gleam Davis agreed with Radwan.

“I applaud the desire for equity, but the price of this equity feels too high for me,” Davis said of doling out 50 cabs for each franchise. “It doesn’t feel like equity to me to tell one company to reduce one-sixth of its business and tell others they get to increase their business.”

“To be the only company to have to cut its current level out of those recommended, and to be a local company, that gives me pause,” O’Day said.

Councilmembers were also not pleased with city staff’s recommendation to set the senior/disabled fare discount at 10 percent, and called on city staff to identify other financing options to increase that discount.

Councilman Richard Bloom said the council’s decision was difficult, knowing that some cab drivers would be laid off and companies forced to close. However, the need for a better system outweighed that concern.

“It was a given, by the very nature of what we did here tonight, that this would be disappointing to a large number of taxi operators currently serving the public because we decided at the outset that we had too many taxis in the city and had to reduce the fleet,” Bloom said. “At the same time we want to build up the standard of living for those working in this trade. There was a trade off. There are winners in this process and there are losers.”

Bloom, who met with represenatives of the cab companies, said complaints that the process was not fair or that there was discrimination in selection were unfounded. He said city staff could have provided more information during the course of the process, “but no matter what staff would have done there would have been controversy.

“This is a very positive step and an important one for our city.”

kevinh@www.smdp.com

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