INTERNATIONAL SYMPOSIUM FOR IDEAL TAXI TRANSPORTATION

TOKYO 24 MARCH 1993

ATLANTAS TAXICAB SERVICE

BY NINA RADAKOVICH

JUDGE CITY COURT OF ATLANTA

Before I start I have been asked to bring you greetings from Atlanta Taxicab Bureau Director I.Ney Lawson and former Atlanta Taxicab Bureau Director Joseph Hall and his assistant George Alexander.

The City of Atlanta has moved from very minimal regulation of taxicabs in the 1970’s to fairly comprehensive regulation, including limited entry into the taxicab market, imposed in 1981. The City Council’s decision to limit the number of taxicabs came from numerous complaints about Atlanta’s taxicab service. Subjects of these complaints included poorly maintained and unsafe taxicab vehicles; drivers who could not or would not speak English; drivers who did not take the shortest route in order to inflate fares, or who did not know how to reach many destinations; drivers who refused to transport passengers on shorter trips; and drivers who were rude to passengers. Some vehicles, operating as “gypsy” cabs (unauthorized taxis), held no permits whatsoever. Complaints came from the public as well as from political and business representatives who were concerned that the poor quality of taxicab service would negatively affect Atlanta’s growing convention business. The City actually received letters from groups who cancelled future conventions because of negative experience with taxicabs.

Persons inside and outside the taxicab industry agreed that the quality of taxicab service was very poor in 1980. Atlanta Mayor Maynard Jackson appointed a Taxicab Task Force that year to make recommendations addressing the industry’s problems. Members included taxicab company owners, taxicab drivers, convention bureau representatives and city officials. The Task Force held many meetings over a period of one year and recommended an entirely new system of regulation for taxicabs. Other cities’ taxicab services and regulations were researched. The Task Force determined that the quality was definitely linked to the number of taxicabs operating; and that Atlanta had too many taxicabs. Atlanta then had approximately one taxicab for every 351 residents (population was 430,000 with 1,579 taxicabs) That ratio was much lower than other U.S. cities which averaged 1,078 people per taxicab licence in the late 1970’s. If the ratio is based on number of hotel rooms, Atlanta’s ratio is closer to those of other cities but still excessive.

The new ordinance recommended by the Task Force and adopted by the City Council imposed a limit on the number of taxicabs permitted to operate within the City. All of those taxicabs operating at the time the ordinance was passed were “grandfathered” In, but no others could enter the market. The ordinance required each taxicab operating to have a Certificate of Public Necessity and Convenience (CPNC) in order to operate. These CPNC’s are the equivalent of New York City Medallions. Applicants for CPNC’s had to be current owners of taxicab vehicles and had to pay $100.00.

The Task Force based its belief that Atlanta had too many taxicabs on the fact that most taxicab drivers had to wait as long as six hours in line at the airport in order to pick up a downtown fare. There just were not enough passengers to go around. Most drivers were making very little money. Because they were not making sufficient pay, they had no money to keep clean or maintain their vehicles in good repair, much less to buy newer model vehicles. One frequent complaint from passengers was that upon starting the vehicle the driver would ask the passenger to pay the fare in advance so that the driver could use the money to pay for gas immediately. Some passengers were stranded on the side of the road when the taxicabs did not make it to the gas station before running out of gas.

It was thought by Task Force members that limiting the number of taxicabs would improve the quality of service for several reasons. Besides increasing the income of individual drivers, having a CPNC would give pride to the drivers because it would constitute a tangible financial asset with growth potential. (This has indeed turned out to be true. CPNC’s sell today for $7,000 to $8,000). This opportunity would attract owner-operators committed to the industry, rather than temporary drivers such as students who might have less interest in maintaining a reputation of good service and in operating a clean, safe, reliable vehicle. Having a CPNC would become a status symbol for drivers.

The 1981 ordinance increased regulation in other ways, and has been strengthened in the last ten years. It imposed separate permit requirements with separate qualifications, on taxicab companies, drivers and vehicle owners. It imposed additional background requirements on drivers and made companies more responsible for record keeping and for maintaining standards of quality. Changes in the mid 1980’s increased companies responsibilities further. Now companies must inspect vehicles and provide training for drivers. Vehicle safety standards are much more strict today than before. The taximeters are inspected regularly for accuracy to prevent overcharges.

Drivers, companies or CPNC holders who violate the regulations must appear before a panel of hearing officers or in the City’s Municipal Court to answer charges. Penalties include fines, suspensions and revocations of permits. A CPNC which is revoked may be transferred, however, so that the property interest in it is maintained.

The 1981 ordinance also created a Bureau of Taxicabs to administer and enforce the taxicab regulations. The previous taxicab ordinance was enforced by one police officer. The Taxicab Bureau has twelve taxicab inspectors to carry out the intent of the ordinance. In addition to looking after taxicabs, the Bureau monitors other forms of transportation, including limousines and horse drawn carriages.

Another change since 1981 has been the addition of a flat rate system for fares to and from the airport and within the downtown area and to the Buckhead Business District area. In 1986 the ordinance was amended to attach responsibility to taxicab companies for compliance of drivers with various requirements. It was thought that it would be easier for the City to look to the smaller number of companies for certain requirements than to the much larger number of drivers. The number of companies operating has decreased from 55 in 1981 to 28 today. There are approximately 9,000 drivers holding permits to operate vehicles for hire in the City of Atlanta.

Although taxicab complaints have decreased since the limit on taxicabs was imposed in 1981, Atlanta still has an excessive number of taxicabs operating. The Taxicab Bureau still receives complaints about drivers who charge excessive fares and who verbally abuse passengers. Taxicabs still wait four hours or more for fares at the airport. The quality of service has improved as the result of tighter enforcement. Atlanta’s convention business has increased since 1981, which has provided an increase in income for taxicab operators.

Supporters of deregulation have argued that a greater number of taxicabs would increase competition and therefore improve quality. But general principals of competition do not apply to taxicab service. Consumers of this service are unique in that they cannot shop around by comparing different providers of the service. They are powerless to do anything but take the service as it comes to them. They cannot compare prices of different taxicabs, or the attitudes or criminal records of different drivers or the condition of safety or degree of cleanliness of different taxicabs. They must depend on government regulators of taxicabs to ensure that all taxicabs meet minimum standards.

One point that is extremely important: Deregulation cannot be reversed once a market is opened up, you cannot close it again. It is impossible to put people out of business once they are in it. This has been Atlanta’s problem. Until the need for taxicab service dramatically increases in our city, we will continue having problems with the quality of service because there is not enough business for the taxicabs we have to make enough money.

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