The belabored creation of a new taxi franchise continues this week, as the matter comes before City Council for possible first approval.
When Roy’s Taxi, Austin’s second-largest cab company, rolled to a stop late last summer, several companies fought for Roy’s franchise and 55 permits. Out of three applicants – Lone Star Cab Company, Capital City Cab Company, and Longhorn Cab Company – a winner was to be selected in a lottery, drawn at random after each company met base qualifications. But the lax standards didn’t sit well with council, who decided the franchise should be awarded the way most city contracts are – through evaluation following a request for applications.
The controversy arguably began there, as Capital City submitted its application late, on a Monday following the Friday deadline in November. Regardless, when the Urban Transportation Commission issued its recommendation in January, it selected Capital City, because it outscored its competitors. While Longhorn Cab came in a distant third, Capital City only outscored Lone Star Cab Co. by a single point.
Still, Capital City looked likely to be awarded the franchise at City Council’s Jan. 25 meeting – until first reading was postponed to March 1, when it was postponed once again. It now appears the decision was delayed so the Office of the City Auditor could examine the award process. At the request of Council Member Mike Martinez, the OCA is looking at Capital City’s finances – where it outscored Lone Star by a point, giving it the win.
At first, the findings looked bad for Capital City; the auditor reported that $460,000 the company listed as assets was collateral on a $300,000 line of credit, raising concerns about the true value of the company. In an addendum to the report, however, the auditor and Capital City clarified that the lien would be placed on the money only if the company took out the loan; they didn’t but applied for it merely to show their “financial strength,” they claim. But problems still persist; In Fact Daily recently reported that Zak Foto, Cap City’s co-proprietor, has had two convictions for driving while intoxicated, though it’s unclear whether this impacts the company’s application and front-runner status. The OCA report seemingly speaks to these findings, noting, “The City requests criminal history information for all of the principals of the applicant companies; however, no criteria exist regarding how to evaluate this information.”
If council chooses to act today, it would still be weeks before new taxis hit the street: The franchise must be approved on three separate readings, with final approval no sooner than 30 days after first reading.
This article appears in April 6 • 2007.