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State regulators have a mandate to let new taxi companies compete

Rocky Mountain News

Published August 19, 2008 at 12:05 a.m.

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Sometime today, Coloradans might learn whether this year's legislature wrested control of the state's taxi regulations from the grip of existing cab companies - or if lawmakers will have to try again in 2009.

The Public Utilities Commission has scheduled deliberations that will decide whether House Bill 1227, passed at the end of the legislative session, truly scrapped the noxious doctrine of "regulated competition" along much of the Front Range, opening the taxi market to new companies. Or if the new law really isn't much different from the old one.

If the commission pays heed to the new law's plain language, it will reject the outrageous entreaties of current cab operators and open the market to startup companies.

HB 1227 kept previous taxi regulations intact for the remainder of Colorado, but established a new environment in eight counties along the Front Range, stretching from Boulder County in the north to El Paso in the south. Any would-be taxi operator who can prove he is "operationally and financially fit to provide public service" is supposed to be granted a taxi license unless current cab companies can show that allowing this new competitor in the market is "detrimental to the public interest."

In other words, the new competitor must be poised to actually harm the public (not existing cab companies) in some way for the application to be denied. It's not enough to demonstrate that a new company isn't needed, as in the old days.

The three incumbent cab companies, led by Metro Taxi and Yellow Cab, don't seem to read the law that way (in other words, literally) at all. They argue, in effect, that regulated competition still applies in a slightly different form. Incumbents claim they can prove that new competition would harm the public interest, and want to see aspiring companies forced into the sort of costly process that has stymied cab startups in the past.

Since wealthy cab companies can afford to hire attorneys and experts, and entry-level entrepreneurs often can't, the incumbents would maintain a stranglehold on the taxi business if the PUC sides with them.

If a PUC order issued July 18 offers a preview of today's findings, consumers may again be stuck waiting at the curb.

Three new companies have applied to offer service in the metro area - Union Taxi in Denver, Castle Rock in Douglas County and Iron Cab in Broomfield/Boulder. The PUC has neither approved nor rejected their applications. But the July 18 order noted, ominously, that Castle Rock and Iron Cab were not represented by attorneys when they filed; by law, the PUC maintained, corporations must hire legal counsel at judicial or administrative proceedings before regulatory bodies.

As attorney Philip Roselli, who's representing Union Taxi, told us, the PUC isn't issuing national security clearances. It's licensing taxi operators. An entrepreneur shouldn't need much more than a safe vehicle, clean driving record and a hefty policy of liability insurance to start hauling fares. Indeed, Castle Rock wondered why a corporation owned and operated by one person could not be represented by its owner before the PUC.

HB 1227 ended regulated competition in this region. If the PUC has the best interests of consumers at heart, it will let incumbent cab companies win their business on the streets, rather than in the halls of government.

Comments

  • August 19, 2008

    8:13 a.m.

    Suggest removal

    uncledave writes:

    Time for the PUC to stop protecting the money gouging cab companies ($75 to DIA) and let a little competition into the picture just like the legislature mandated. Wanna take any bets that's not what happens? The PUC rolls over to the big business interests it is supposed to regulate. Xcel rates ring a bell?

  • August 19, 2008

    8:39 a.m.

    Suggest removal

    woodwose writes:

    I'm no expert in running a cab company, but I know what restraint of trade is, and the PUC is definitely engaging in it at the behest of cab companies. Erecting barriers to competitors to enter the market, and regulating fares just benefits the cab companies that CAN do business, not the average guy looking for a cab.

    Don't even ask about getting to the airport. Why is RTD's sky ride $12 when the most any of their regional routes is $4?

  • August 19, 2008

    8:57 a.m.

    Suggest removal

    wisdomwriter writes:

    Why does the Public Utilities Commission has jurisdiction over taxi companies is still a mystery to me, but it is what it is. I agree with Mr. Roselli - all you should need is a clean driving record, a car in decent condition, and a good insurance policy. After that, let the market do its job, decide what works and who to give the business to.

    I can't blame the incumbents for defending their business...this is something that happens all the time in every city, county, and state as well as at the federal level. It only takes someone with courage to change the current environment in order to give the little guy a chance...

  • August 19, 2008

    9:05 a.m.

    Suggest removal

    mmannino writes:

    The PUC is similar to a union. Its goal is to stop competition thereby raising prices and reducing quality of service. I have a feeling that RTD and the PUC are colluding. RTD does not want the competition either. A rejuvenated private transportation industry is bad news to RTD as well as existing cab companies. This situation has happened in the northeast where the public transportation monopoly has tried to stop private competition.

    For once, I applaud the legislature for trying to fix a bad situation with the PUC. I am afraid that the only effective remedy is to disband the PUC or pass a state amendment stopping restraint of trade practices. The PUC restricts competition in other areas such as moving services.

  • August 19, 2008

    12:06 p.m.

    Suggest removal

    blacksho89 writes:

    mmannino:

    Perhaps you can explain to me why RTD would be against competition when most of their funding is from taxes, not fares?
    In fact, RTD's bottom line gets blacker when the drivers strike, because of the decrease in expenses!
    Competition would increase RTDs net revenue.

  • August 19, 2008

    2:01 p.m.

    Suggest removal

    Denverite91 writes:

    Wisdomwriter is correct, all you need is a clean driving record, a car in decent condition, and a good insurance policy. The issue at hand here is the fact that the group who is trying to start their own company does not feel that these three requirements are needed. The PUC actually did background checks on these individuals and they found out that most of them could not provide any of the above. Some of which were terminated by current companies due to an extremly large number of complalints. There was also a study done that determined that when you decrease the size of a fleet that wait times were longer and outlying areas did not get serviced at all. When other cities have done the same thing fares actually increased and driver quality and service decreased. Yes competition is good, but unless you strictly regulate the individual who will be transporting your intoxicated daughter home on a Friday night then you are doing the city no good.

  • August 19, 2008

    2:37 p.m.

    Suggest removal

    555 writes:

    denverite I have told you to show your colors. stop acting you are cab company owner who hates comptetion. look without competion there will be no olympics. let us talk about what you do for business. you charge drivers $120 a day to serve the public. since most of them are new comers to america you have them sign for you one sided contracts that when you do them wrong they alrerady give up their rights. you treat them worse than the warlolds they scaped.this
    drivers want their American dream that you made it hell back now.