New city taxi study could reduce taxi companies from 80 to two
Paramjit Bajwa’s workday began shortly after midnight. Now, it’s 10 in the morning, and his cab is seventh in line outside the Hyatt hotel across from the Capitol. Though we’ve been chatting for half an hour, the line hasn’t moved, and Bajwa figures it will be another two hours before he gets a fare—if he’s lucky.
“Today I have made not a penny,” the 44-year-old Pakistani says. “This is not unusual.” One of his fellow drivers at the H.P. Cab Co., Sukhchain Singh, has done somewhat better. For 13 hours worth of work, he’s collected the princely sum of $45.
The problem, they say, is that there are far too many cabs in Sacramento vying for too few customers, a perception that is backed up by the findings of a $50,000 study ordered by the city council to find out why cab service in Sacramento is so expensive, and so spotty. Incredibly, about 80 licensed cab companies work the streets, according to the study, the majority of them solo owners. (There are also a couple of dozen more that are unlicensed.) As a result, price gouging is frequent and uncontrolled. Idle cabs clog downtown streets and take up scarce parking places, while suburban residents rarely see a cab. Fares are among the highest in the country and are completely at the whim of the cab’s owner. A trip of a few blocks can cost $10 or more—and it’s perfectly legal.
“If I wanted to charge $100 a mile—if I wanted to charge $100 a foot—I could,” said Fred Pleines Jr., president of the Yellow Cab Co. of Sacramento, the city’s biggest cab company.
The problem, according to the city’s transportation consultants, is deregulation, the same economic thinking that brought us the electricity crisis and the savings-and-loan disaster. Like many other cities in the early 1980s, Sacramento decided to turn the invisible hand of the free marketplace loose in the local cab industry. Most cities eventually reversed direction; today Sacramento is one of the few major cities left with a deregulated taxicab industry. But that appears to be on the verge of ending. The city’s transportation consultants, Nelson\Nygaard of San Francisco, have recommended that city officials get back into the taxi-regulation business, a path the city seems likely to follow, and fairly soon.
Unfortunately for the vast majority of Sacramento’s cabbies, the consultants’ proposed solution will either put them out of business or require them to merge with other cab companies. One of the study’s key recommendations is that the city set a “minimum fleet size” for cab companies of 25 vehicles, which the consultants said would shrink the number of companies to a point where they could be regulated. To get an idea of how fragmented the industry is, if that recommendation were adopted today, the number of cab companies in the city would drop from about 80 to two.
Not surprisingly, the idea has not been embraced by the owners of small cab companies, who see the proposed regulation as the secret handiwork of their bigger competitors. “This is definitely all about money and greed,” complained Scott Millis, who owns Elysian Transportation, a one-cab operation. “They want to get rid of us so they can have the market to themselves.”
Pleines, Yellow Cab’s president and the focus of many of the independent cabbies’ suspicions, admits “there would be some benefits to us” if the minimum-fleet-size recommendation was adopted. But he believes that ultimately all cab drivers would profit because there would be less competition. “There are too many cabs downtown,” he said. “Something has to be done.”
Gus Vina, the city finance director, said there are no immediate plans afoot to eliminate small cab companies, “but that is a discussion that is going to be had, I’ll guarantee you.” Vina said that although some small operations might decide to close, he suspects most will band together to create taxicab associations of 25 cars or more. But the cabbies say this is unlikely.
“We are all from different countries, different cultures, speak different languages and have different ideas about how to do business,” said Chan Shah, a Pakistani. “I don’t want someone else telling me what to do.”
For the moment, Vina said, the city’s staff is recommending that the city put a cap on fares and set flat rates from downtown to Sacramento International Airport. Currently, fares from downtown to the airport are anywhere from $30 to $45, and a trip from the airport to downtown is between $25 and $27. That’s because the airport rates are controlled by the county, through an agreement with the airport taxicab association.
This brings up another sore point. Currently, waiting at the airport for passengers is forbidden for city cab companies, unless they are fortunate enough to gain admittance to the tightly controlled association that has an exclusive contract with the airport. Not many are. Singh, for example, says he’s applied three times for admittance but has been turned down each time. “They don’t let you in unless you are a friend or a relative of the people who run it,” he said.
“That’s not very true,” said Hadi Kakar, president of the airport taxi association. But it’s clear that he believes most downtown cabbies aren’t professional enough to work the airport. “One of them can mess up everything. They fight all the time. They don’t follow procedures. They don’t get along. The reason we started this association was because the downtown [cabbies] would fight with each other in the line.”
Mark Bradford, an attorney who represents nine cabbies who were granted admission and then rejected, said that was an excuse to preserve the association’s “monopolistic, elitist” hold on the lucrative airport trade. “Why should they have exclusive rights to the public airport? They either need to open it up, or we’re going to march into court and file suit.”
Finance director Vina said city staff will present its recommendations to the city council at a workshop on October 5. “We’re hoping council will give us some direction at that point,” Vina said.
The city’s taxi study is at www.cityofsacramento.org/taxiworkshop.