By Kate Cagle
Taxicab drivers say they need a lifeline to stay afloat as the city slashes the number of cabs licensed to pick up locals and tourists in Santa Monica.
During the Tuesday, Dec. 6 council meeting, the city moved to reduce the number of cabs by 32 percent, from 300 to 199. The drop in cabs is a last-ditch move from cab companies struggling to stay competitive amidst growing options to get around.
A coalition of companies wrote to the city asking for permission to take dozens of drivers off the road, promising they will still be able to meet the current demand for service. Eliminating 101 cars will result in a $142,000 reduction in taxi fees that get paid to the city.
But cab companies and drivers want those fees dropped by even more.
“It is with a heavy heart that (I say) business isn’t good,” said Daniel Klein, the Director of Business Development and Governmental Affairs for Bell Cab. “We’re asking for a little financial assistance in help in reducing the fees.”
While each franchise operates differently, drivers who own and operate their own cabs typically pay the licensing fee to drive in the city. Most Santa Monica cabs have a dual license to drive here and in Los Angeles.
As requests for ridesharing services like Uber and Lyft surge, cabs are in a sad state of affairs. Over the past year alone, city staff reported a 44 percent reduction in cab use. However, Klein says those loyal to the cab industry are also the most vulnerable: the kind of people who typically do not own smartphones.
“If you have a 85-year-old man who is in a wheelchair and needs to go to the market, he’s going to call a cab.”
To help drivers stay afloat, the Taxicab Coalition has requested the city also reduce franchise fees by 50 percent and eliminate the Business License Tax. Eliminating the tax would cost the city another $62,250, in addition to the fees lost by eliminating 101 cabs.
The city pushed back making a decision on the fees until closer to the end of the current taxicab agreement, which ends December 2017.
“This is a rapidly evolving situation where the business model is, frankly, deteriorating,” said Mayor Pro Tem Ted Winterer, who suggests reducing the number of cab companies in the city to further reduce competition. Right now, five companies are licensed to operate in Santa Monica: Bell Cab, ITOA, Metro Cab, Taxi! Taxi!, and Yellow Cab. Those companies each pay a $5,000 base fee to operate in the city with an additional $1,100 per vehicle.
The fees paid by the companies to operate in the city in turn pay for the costs of regulating the industry. Cab companies are required stick to set pricing, provide handicap-accessible cars, drug test drives and perform background checks. A reduction fees may upset a delicate balance in the budget, according to Councilmember Kevin McKeown.
“I suppose we could, in the future, consider whether we should be subsidizing the industry in this town,” said McKeown, who added there is still a need for taxicabs in modern cities, even with the growth of rideshare aps and the promise of autonomous vehicles. “We’re saying goodbye to something that was a part of American life for almost a century.”