Council Considers Taxi Franchises

Taxicabs look to extend franchise agreements. (Photo by John Anderson)

Two hours of testimony concerning taxicabs and their respective franchises concluded last Wednesday, April 29, with an indication that change is afoot for local drivers – even if the method the City Council's Mobility Committee used to arrive at the terms caused some serious confusion. The plan indicates that today, May 7, Council will review and potentially approve on second reading language that would extend the current franchise agreements for one year, with three new provisions.

• First, the formula for determining the number of permits afforded to each of the three pre-existing taxicab franchises (Yellow Cab, Austin Cab, Lone Star Cab) would transition from being dependent on lobbying to being dependent on currently undecided performance measures.

• Second, the usable life of a taxicab would extend from seven years to "so long as it meets inspection regulations."

• Finally, the chauffeur's licenses that allow cab drivers to operate taxis – now given by the city to franchises before going to the drivers – would be issued directly to cab drivers.

And although Council had approved, on first reading, language that would grant each franchise 50 new permits, Committee Chair Ann Kitchen chose to yank that term.

Kitchen added that she would also send an action item to Council advising City Manager Marc Ott to propose a plan for a fourth cab franchise that's a driver-owned co-op, something the Austin Taxi Drivers Association has recently been adamant about implementing. Four American cities enable cabbie co-ops – Madison, Denver, Philadelphia, and Alexandria, Va. – and the idea's been broached here, too. In 2007, Lone Star Cab was a driver-owned co-op managed by Solomon Kassa until Kassa reformatted the group into a corporate structure after its five-year agreement expired in 2012.

Ann Kitchen (Photo by John Anderson)

It's a wonder the committee got so much accomplished. Between the foggy course of action and highly confusing topic, committee members spent more time than they'd hoped parsing out what becomes an ordinance, what goes into code, what's part of the franchise agreement, and what can change without a full rewrite of the contract. CM Delia Garza confessed as much midway through, justifying one speaker's concerns by admitting "this is one of the most complicated issues we've seen before us."

Making matters more complicated is that the parties involved all want different things. Whereas last fall's cab-centric discussions pitted the three franchises against transportation network companies, the back-and-forth at City Hall this spring has the three franchises squaring off against their drivers. (Presumably, the two parties will team up again this summer to tango with the TNCs once more.)

The franchises want the status quo. Yellow Cab President Ed Kargbo and Austin Cab's Joan Khabele were both in attendance to lobby for a 10-year extension on their current agreements with the city, with Kargbo saying he'd like terms to continue for the next 25 years. Both Khabele and Kargbo argued that their companies have provided a valuable, tenured service to the city and should be rewarded appropriately – in this case, via the evenly distributed receipt of however many more permits the city is able to dole out (current projections anticipate 405). They said they've taken responsibility for providing transport from the airport, and have dealt with the burden of handling the issues that spring up when you work with independent contractors (e.g., drivers). Khabele added that Austin Cab is working on improving its mobile dispatch app.

Their drivers want equity. They are the ones providing the service that keeps the companies in business, said Dave Passmore, president of the Taxi Drivers Association. They want the 405 new permits to go toward a co-op, and believe that any driver not admitted into the co-op should be no longer subject to price hikes from the franchises on his or her cab lease. Passmore said the Association has pressed for permits to be issued directly to drivers for half a decade. (Right now, a pending driver gets affiliated with a franchise, passes through a series of background checks, takes the licensing test, and then receives a permit directly from the cab company.) He, along with many others, testified before the Mobility Committee about the franchises' penchants for quick, undue firings.

"We want an equal playing field," he told the Chronicle. "We'll get the background checks and carry commercial insurance. We're not wanting to operate illegally, if we get a co-op. We want a legal operation. And we want rules. We'll adhere to those rules and hold drivers responsible for any misconduct."

TNC Talk Awaits Lege Decisions

Drivers also seek equal regulations to govern TNCs and their drivers, but recognize that they can't yet hold that conversation along the dais. Council requested the drivers keep testimony concerning the unequal regulatory structure between those two service providers at bay until the state Legislature concludes with two bills – HB 2440 and HB 1733 – that deal directly with TNCs in Texas.

HB 2440 has received the most attention. Authored by Rep. Chris Paddie, R-Marshall, it would afford TNCs full allowances to operate within the state so long as they're willing to pay a nominal $5,000 annual fee. The bill underwent an insurance-related rewrite after first being heard in the House Transportation Committee a few weeks ago, but now has that part sorted. At times between acceptance of a ride and payout, the TNC would provide its standard primary insurance; when the app's on but a ride hasn't been accepted, either the driver or the TNC must pick up a standard policy.

The bill has drawn ire from Council's most vocal critic of TNCs, Kathie Tovo. Speaking at the committee hearing, she criticized Paddie's bill for not having any terms regarding accessibility, and worried about its ability to render the regulations Council passed last autumn useless. "We, as the policymakers in Austin, understand the community and its needs," she said.

Tovo said she's been focusing her attention on HB 2440 and hasn't looked into HB 1733, but that's more likely the lesser of her two evils. The bill, authored by Amarillo Republican Rep. John Smithee, is designed to set a standard for insurance policies throughout the state and still allow cities to sort out their own terms. So Austin's provisions would stay in effect, and TNCs would have to sit down at the table to talk about how they can play nice with the cabbies and their franchises.