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Council considers taxicab agreements

Friday, April 24, 2015 by Elizabeth Pagano

On Thursday, the parking garage at City Hall was filled with taxicabs.

The reason was clear: For the first time, City Council members were considering the fate of the city’s three taxicab franchise agreements as a body. Ultimately, they voted unanimously to “pass a placeholder” and extend the current contract, with the understanding that the length could be set on second or third reading and may change before its final approval.

Despite the need to work out the details of the franchise agreements, Council Member Greg Casar noted that there was a consensus that it was time to rethink the way the city regulates ground transportation. He stressed the need for a regulatory framework for both cab companies and transportation network companies that “rewards consumers getting picked up and rewards our drivers, who are a valuable part of our community, by being well taken care of by those companies.”

Though Council voted to extend the current contract, it did so with the promise that there would be changes soon.

Council Member Delia Garza explained that the rush to pass something on first reading was an attempt to keep the process moving, not a desire to preserve the status quo long-term.

“We anticipate changes to what staff recommended. In fact, I would say that we anticipate significant changes,” said Garza. “I want to apologize for confusing everyone on this. We didn’t want to put a placeholder on any term, because we didn’t want either side to think we were going one way or another. It was purely to keep the conversation going.”

Without intervention, the current franchise agreements are set to expire in August of this year.

Among the topics on the table for discussion are additional permits for franchises, lease caps for drivers, the possibility of a worker-owned taxi co-op and a system that would allow permits to be sold directly to drivers.

Currently, the city has 756 taxicab permits, which are distributed to its three franchises: Yellow Cab Austin, Lone Star Cab and Austin Cab Company. Drivers then lease from these franchises. On Thursday, several of those drivers spoke in favor of a lease cap, which would limit the amount taxi franchises can charge drivers.

David Passmore, who is the president of the Taxi Drivers Association of Austin union, broke down the high cost of doing business as a taxi driver in Austin. Spurred by questions from Council Member Ellen Troxclair, he explained that at his company, the $450 annual franchise fee from the city transforms into weekly fees for drivers that range from $315 to $408, depending on whether drivers own their cars.

Taxi Drivers Association of Austin Vice President Merga Gemada said that, citywide, weekly fees could be up to $850, making it hard for drivers to earn a living without working long hours.

Though Thursday’s discussion was not explicitly about TNCs, their recent influence and the pressure they have put on traditional taxi services permeated the conversation.

Yellow Cab Austin President Ed Kargbo told Council that the service taxicab companies provide “doesn’t come cheap,” and asked for support in continuing to run their businesses “in the nondiscriminatory, accessible manner” that the city has required of them. He said they supported a 10-year renewal of the franchise agreements.

Kargbo explained that cab companies are responsible for providing a fleet of wheelchair-accessible vehicles, a 24-hour call center, insurance for drivers and safety features to deter crime.

“We’ve done our job for 30 years, we’ve done it well, and we look forward to continuing to do that,” said Kargbo.

Cab driver Neal Ahmad pointed out that, under the current system, cab companies “never lose money,” because they are paid by drivers regardless of circumstance. He advocated for a different system and said that drivers would offer $8,000 annually for direct permits with the city.

“(With) 756 permits, that’s you getting the City of Austin $320,000. We are offering you $8,000, and that’s going to bring the city $6.6 million,” said Ahmad. “Who are you for?”

The City Council Mobility Committee will take up the taxi franchises April 29. Council will discuss the agreements for second and third readings May 21 and June 4, respectively.

“NY-Taxis” by Licensed under CC BY-SA 3.0 through Wikimedia Commons.


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