Photo by Ross Furukawa

Santa Monica could soon end its current taxicab franchise system in favor of a permit system, but City Council wants to protect the benefits that residents enjoy with the local company Taxi Taxi.

Councilmembers voted unanimously last week to adjust the municipal code that relates to a number of transportation services but they were hesitant to direct staff to initiate steps toward enacting a permit system and instead recommended the city find ways, within the limits of the law, that will encourage Taxi Taxi to continue conducting business in Santa Monica.

Under the current model, only franchise holders can access taxi stands or accept hailed rides. A permit model would broaden the number of companies able to do business locally.

The discussion came in light of the city’s recent restructuring due to the financial effects of Covid-19, which resulted in the elimination of various staff resources. Staff also considered the changing market dynamics of taxicab services and the fact there is no longer a concern of oversupply when it recommended the city move toward a regional permitting solution, according to Chief Mobility Officer Francie Stefan.

“The city has had a franchise system for taxi cabs since 2009. We established it to deal with an oversupply of taxis and operating issues and we all know that since then, the market has changed pretty dramatically,” Stefan said, referring to the rise of companies like Uber and Lyft. “The state has also intervened more recently to limit local regulation of taxi cabs and encouraged regional permitting solutions.”

As a result, Stefan added, “We would seek to align with LADOT or other regional agencies and find ways to permit more efficiently than we do currently. It has the potential of increasing flexibility and other customer services but not precluding existing operators. The one downside for existing operators would be the potential for competition in the marketplace.”

The city could still require accessibility requirements, fare maximums and other core benefits of the franchise system in a permitting model.

Some cities are transitioning their franchise systems to permit systems including the City of Los Angeles, which may be able to facilitate permitting on Santa Monica’s behalf through a Memorandum of Understanding or other agreement once Los Angeles’ permitting system is operational, according to a staff report.

Currently, any taxi company can pick up residents as long as they pre-arranged the ride on a phone, app or other way, Stefan said.

“The only thing they can’t do is other companies cannot sit in the city’s existing taxi stands and they cannot accept a hailed ride on the street,” she said.

Taxi Taxi is the last remaining franchise holder in the city after Council approved a streamlined system in 2018 that reduced the franchise holders from five to one. However, the local company has still had to reduce the number of active vehicles.

Several councilmembers said they wanted to protect the Santa Monica based business.

“We have only one company left in town who said its fleet is diminished. But it’s important to protect (the fact) we have that asset in town,” said Mayor Kevin McKeown. “Is there some way we can protect Taxi Taxi from the competition at taxi stands or hailing under a permit system?”

Stefan said staff could look into it but it’s often difficult for a city to prefer a certain commercial provider over another.

Councilmember Ted Winterer said he concurs with McKeown’s standpoint on Taxi Taxi.

“I think Taxi Taxi has been a great partner with us for many, many years, and as we know, they have a fleet of low emission vehicles… They provide excellent service and I think we should, within the limits of the law, be trying to encourage them to continue to be able to do business here in Santa Monica,” he said.

“I agree,” Mayor Pro Tem Terry O’Day added. “Taxi Taxi has provided a lot of great service for us. That’s how we elected to franchise them. And it’s those benefits that they provided that allowed them to win the franchise. Though, I might just say, let’s not protect the company but rather those additional features that we’ve earned for Santa Monica residents as a result of the franchise system.”