The City Council made minor revisions to the regulation of taxicabs last week but delayed significant reform for two years.
Council approved a package of changes to Santa Monica's cab system but chose to make incremental changes to the system with an expectation that the industry would continue to evolve in the coming years due to increased competition and the arrival of the Expo line.
By the end of the night, Council extended all franchise agreements for two years, gave companies additional control over the logistics of their fleet, removed price floors to enable promotional pricing, transferred authority over cabs from the Police Department to Planning and Community Development, authorized participation in app programs and allowed for carpooling or ride sharing services by cabs.
Councilwoman Gleam Davis said the taxi industry had been disrupted by the likes of Lyft and Uber and expressed frustration at the City's lack of jurisdiction over the non-taxi companies.
“The State has made it clear they will occupy the field,” she said.
Davis said the council should be looking at ways to lower the financial burden on cabs and said rewarding companies with good records should be part of the franchise renewal discussion in the future.
Councilman Ted Winterer also supported using the quality of service to evaluate future franchise renewals.
“I think one of the ways the traditional cab companies best compete with the [Uber and Lyft] is to provide a better product, and I'm not so sure that's happening all the time with the franchises that we have,” he said. “I've used all these cab companies and they run the gamut in terms of the service they provide you.”
Council rejected several staff recommendations that would have altered the number of cabs on the street and limited the services they can provide.
Staff proposed reducing Santa Monica's cab fleet from 300 to 182. While one cab company, Taxi! Taxi!, did support reducing the number of cabs on the street, the proposal was opposed by the city's other four companies. Council eventually chose to keep the fleet at 300 and preserve the current distribution of cabs among the companies.
Council also rejected a proposal that would have banned package delivery by cabs.
Councilman Terry O'Day advocated for allowing cabs to deliver packages, saying the city should deregulate cabs, not impose additional restrictions on their business.
“Getting these cab companies to the point where they can compete means enabling local entrepreneurs to compete against this global trend,” he said.
Councilwoman Pam O'Connor agreed, saying the city shouldn't ban delivery of goods when Uber is already offering food delivery services.
According to the staff report, taxi use dropped by 27 percent in 2014 and year to date numbers for 2015 show additional declines. Part of the decision last week included direction to staff to evaluate the future of cab companies in town. Specifically staff was asked to research options that would make the taxicab franchise program more accountable to market forces.
“Cab companies are going to have to be far more innovative than they are today,” said Salvador Valles, assistant director of Planning and Community Development.
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