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Wednesday, July 17, 2013

Taxicab Drivers Not Happy with City’s Study of New Regulations

Old, monopoly-style permit system is unconstitutional

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Now that the city’s strict cap on taxicab permits has been declared unconstitutional, the Milwaukee Common Council has an opportunity to develop new taxicab permitting regulations that could allow drivers to own their own cabs and operate independently.

But that may not be in the works.

Taxicab drivers blasted the city’s consideration of new regulations that would offer operating licenses to companies, not individual permit holders, saying that it was too much like the old monopoly system that was struck down.

Madison’s fleet-style permitting system, which offers operating licenses to taxicab companies, was discussed during Friday’s meeting of the Public Transportation Review Board, which heard testimony about taxicab systems in other cities.

Alderman Robert Bauman, chair of the Public Transportation Review Board, didn’t allow the cab drivers to speak during the meeting, but they told the Shepherd afterwards that a company-based permitting system wouldn’t satisfy Circuit Court Judge Jane Carroll’s ruling in April that the city’s strict permit cap and secondary-sale private market is unconstitutional.

The drivers want the city to move to an owner-operated system with unlimited numbers of permits for sale at a reasonable price.

“We are trying to prevent big companies from monopolizing the business,” said Ishmael Harun, president of Southeast Wisconsin Taxi Drivers Association. “Now they are going back indirectly and doing the same thing.”

But Alderman Bauman called a fleet system modeled on Madison’s taxi regulations a “radical departure” from the Milwaukee’s current permitting system even though it wouldn’t directly license individual drivers.

“This could be the drivers’ worst nightmare,” Bauman told the Shepherd, although he said it wouldn’t prevent the drivers from forming new companies that could obtain permits from the city.

 

Madison’s System a Model for Milwaukee

The city has not issued any new taxicab permits since 1991, when it decided to allow taxicab owners and drivers to sell their permits on the private market.

At the time, the cost of a taxicab permit was about $85.

A permit is now valued at $150,000.

The cap has also led to a low number of cabs in the city—just one taxi for every 1,850 residents—and artificially high fares, which the city also caps.

Roughly half of the 321 permits in existence are owned by Sanfelippo family companies American United Taxi Company and Joe Sanfelippo Cabs. Their permits are said to be worth more than $20 million.

The drivers who sued the city contended that the artificially low number of permits and the high cost of purchasing them has created monopoly owners with drivers working as “urban sharecroppers” who will never be able to go into business for themselves.

In April, Judge Carroll agreed with them and declared the city’s monopoly system to be unconstitutional, forcing the city to develop regulations that will hold up in court.

The city has until Aug. 2 to request an appeal of Carroll’s decision, but the city hasn’t announced if it will do so.

The Milwaukee Common Council had considered new regulations earlier this year that would put 100 new permits on the market within 10 years. But aldermen scuttled that idea so that the city’s Legislative Reference Bureau (LRB) could study other cities’ systems and make recommendations.

One model under review is Madison’s fleet permitting system, which offers an unlimited number of two-year operating licenses to taxicab companies. Each license and renewal costs $2,200, is not transferable, and can be revoked or suspended. A taxicab driver’s permit costs $25. An annual vehicle license costs $60.

Madison now has just a handful of taxicab companies, which employ the formerly independent taxicab permit holders.

Milwaukee’s drivers said Madison’s fleet permitting system was too much like the city’s unconstitutional monopoly system.

“In Madison, the big companies came in and the owners were forced to sell their permits,” said Saad Malak, a taxicab driver who attended Friday’s meeting. “The same thing will happen here in Milwaukee.”

 

Is the City Biased Toward Taxicab Owners?

Malak charged that the LRB was biased in favor of the taxicab companies and not interested in developing a solution that would benefit drivers who want to strike out on their own.

“They are collaborating with the companies,” Malak said. “They are trying to extend the time and trying to confuse the judge so that they can go to the judge and say, this is what we are doing.”

After Friday’s meeting, the taxicab drivers confronted Bauman about the perceived bias of the review board and the LRB’s study.

The drivers couldn’t participate in the meeting, but Red Christensen, who represents the cab owners but isn’t a member of the review board, was allowed to speak freely during the discussion.

Bauman told the drivers that they would be able to testify when the LRB’s written study is up for review in committee.

“You’ll have a chance to point these things out,” Bauman told them. “They may be biased, I don’t know.”

Bauman told them the fleet system was an “entirely different system” that would satisfy Judge Carroll and he defended the city’s ability to regulate the industry.

“The city is not in business to serve the drivers,” Bauman said. “We’re here to serve the public interest. And if moving to a fleet system better serves the health, safety and welfare of the public then we’ve got to look at that.”