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THE NUTS AND BOLTS
By Fred Anderson
We’ve said before that eliminating the license cap in 2006 crippled the taxi industry in Minneapolis. So, for those who don’t understand, or say they don’t, what’s been going on for the last eight years, here’s the scoop:
- The oft-sited Shaller Report recommends 340 cabs for a city the size of Minneapolis, the number before the cap was lifted. Removing this licensing restriction resulted in approximately a thousand at the beginning of 2014. Nearly tripling the number of cabs brought in that much higher of a percentage of troublesome drivers. Cab-riding customers found it three times as likely to have a bad experience and made their future transportation decisions accordingly, patently unfair to the vast majority of good drivers. This is also grossly unfair to the average customer only wanting a ride.
- Enforcement staff was not increased until just a few were added within the last year. The increased number of problem drivers quickly became aware of how much easier it was to get away with disruptive behavior.
- Removing the cap caused a reduction of the value of a transferable cab license to approximately 10% of its previous resale value. This loss rate calculated for 270 transferable licenses amounts to nearly $6,000,000. We agree the previous system was hopelessly flawed, but its replacement dealt a financial deathblow to many license owners and caused extreme hardship for others who, after all, purchased their licenses under a system created by a previous City Council.
- Most of the new small companies could find no inroads into the resident market already sewn up by larger companies, who with their larger fleets could provide more dependable service. This caused additional driver frustration, given the dramatically increased competition for an unchanged number of street-hails.
- The unhealthy and uncertain business atmosphere created by the ordinance changes of 2006 drove many of the best cab drivers out of the profession into other transportation occupations or into unrelated fields. Hiring good cab drivers became nearly three times as difficult for cab companies.
- Several cab companies have, as we predicted in 2006, gone out of business. Others are on the verge. Eight years of added expense, restriction, and regulation have brought the industry to a point where no Minneapolis cab company is prospering, not even the ones the 2006 ordinance changes were designed to help.
- Additionally, the mandated 10% wheelchair-accessible taxi fleet policy created over $150,000 in unnecessary expenditures for equipment that, although recommended by City of Minneapolis Licensing officials, was wholly inadequate for transporting wheelchair-bound passengers.
The result of these policies has been taxi chaos in Minneapolis. In 2006 the cap on the number of taxis licensed in Minneapolis was removed and by 2010 anyone could get one for $475. Removal of the cap by the Council was promoted financially and legally by a right-wing organization, the “Institute for Justice”, whose primary motivation was ideological. They believed, according to their own website, essentially in deregulation for the sake of deregulation, and most of us know that applying factually deprived political theory to practical concerns rarely works. In any profession, a tripling of personnel performing the same task for an unchanged market, no matter what the rationale, makes no sense. Envision a referendum, backed by an outside organization with deep pockets, designed to triple the size of the City Council because they have been found, by this organization, to be not responsive to the public. Examples of Council inadequacies, misbehavior, and malfeasance would be presented to the public in the most slanted fashion to press the argument. The resulting referendum would dissipate each Council member’s power and dramatically alter working conditions, for no Council member would be granted more office space or additional staff. The Council chamber would not be changed because by sharing office and chamber desks Council members would be encouraged to spend more time helping constituents. The process would be left open to expansion in case the City Council fails under this new system as it did under the old one.
If this sound ridiculous then imagine how we feel; it happened to us! How popular would these ideologically inspired rule changes be with the City Council? Would the Council be perceived to be whining and crying about the unfairness of it all? Well, we don’t care about revenge. The nuts and bolts of our issue is that other cities have a well-operated and regulated taxi system and we can too! Here are a few things that have worked elsewhere and will work here:
1. Establish a permanent task force composed of taxi professionals, City Council members or staff, and city inspectors, to suggest policy change. No task force memorandum could be issued without the agreement of all three entities.
2. Upgrading driver training by Courtesy Cab Training Program to include GPS training and an increased emphasis on safety and customer service.
3. Increase the power of inspectors to issue tickets and license suspensions or revocations in order to control the disruptive elements in the taxi industry. We want the drivers and owners who can’t be professional out of business in Minneapolis!
Fairness is our goal, and with all that’s happened in the last eight years, we just might be a little loud until we are heard!
FINALLY THE STORY CAN BE TOLD
By Fred Anderson
Quick, shortsighted, and arrogant decisions are nothing new in government circles (Michele Bachmann comes to mind). In Minneapolis, taxi drivers, owners, and managers have witnessed a slew of rash policies forced upon them while being denied the chance to seriously discuss them with the implementing officials. The wheelchair-accessible taxi program is such an example.
In 2006 the Minneapolis City Council, during their victory over the taxi industry in lifting the cap on the number of taxis in the city, casually announced that the wheelchair-accessible taxi fleet would be 10% of the existing cabs. Council Member Diane Hofstede, long an outspoken advocate for the disabled, took great pride in this statement and refused to heed claims from cab personnel that the program was economically unfeasible and presented a great financial burden to taxi companies and taxi owners. It was put before the Minneapolis cab community as a fait accompli; a done deal, take it or leave it. The long-suffering cab drivers took it, but in a literal sense that the city did not anticipate.
This is not the first time Minneapolis has had a wheelchair-accessible taxi plan. From 1996 to 2002 Rainbow Taxi took over from Yellow Cab’s Joseph Miller, who was the first wheelchair-accessible taxi owner in Minneapolis. Eventually Rainbow had five full-size conversion vans, two of which were subsidized by the Minneapolis Community Block Grant Program (after all, conversion vans cost two or three times what a normal van costs). In the six years of operation the program only came close to breaking even during one of the years, mostly because the demand for service was inconsistent. In 2002, after requests to the city to forego the vehicle age requirement were denied, Zack Williams, CEO of Rainbow Taxi, was forced to discontinue wheelchair service. He told the City Council the wheelchair-accessible taxi program needed “specialized vehicles and professionally trained drivers.” He was not listened to.
As has happened before with Minneapolis taxi regulation, their plan wasn’t well considered. Minneapolis currently has over 150 wheelchair-accessible cabs, so many mainly because one sop left to owners was that the age waiver was lifted (five years too late for Zack Williams and Rainbow Taxi). After owners added the $1100 worth of mandatory wheelchair equipment, they operated as any other cab would. They did not have to take wheelchair-accessible orders because they knew what the city wouldn’t acknowledge, THEIR DRIVERS WERE NOT STATE CERTIFIED! Our estimate is that there are less than fifty state certified drivers in the city, almost all at the company who provides the vast majority of this service. As you can imagine, this led wheelchair customers to do exactly what they did prior to 2006; call the company that consistently provides the service. And thwarted at every turn to present a workable program, the cab industry kept quiet as to the shortcomings of the Council’s policy.
In 2013 the city finally noticed that in a standard van (Dodge Caravan, Ford Windstar, etc.) a customer in a wheelchair would have to bend his or her head to the side to get in the vehicle up the back ramp, and also would have to bend his or her head once inside the vehicle. While this situation is not beyond repair, it certainly is not proper. The State of Minnesota, as horrified city inspectors discovered, only inspects the equipment for correct installation and overall compliance with the law. During the taxi industry meeting of September 12, 2013 taxi company officials were confronted by very nervous regulators who probably felt betrayed. Some of them were betrayed of course; not by cab drivers but by their own employers. However, Grant Wilson, Manager of Licenses and Consumer Services, is more culpable than other inspectors in that he told all applicants which ramps, etc. to use, not bothering to find out if it would actually work. Waleed Sonbol of Blue & White Taxi summed it up when he told Mr. Wilson at the industry meeting that the Minneapolis Taxi Ordinance only states that these vehicles must be wheelchair-accessible; it doesn’t say anything about transporting a passenger in the wheelchair. I don’t think that was what Grant Wilson wanted to hear, but, it was he who recommended the equipment for the vans and it was he who didn’t notice for seven years that this huge loophole existed.
The nervousness of licensing officials noticeably increased as the meeting wore on. It was at last apparent to them that taxi personnel, for the last seven years, had no incentive to say anything! Taxi experts hadn’t been listened to, and the industry had been herded down a path that was forced upon them, as the lawyers say, without recourse. Furthermore, now that the drawbacks of the program are exposed, is the taxi industry is expected to roll over and meekly follow the new guidelines, including having drivers acquire State of Minnesota Certification and providing vehicles that are physically able to transport wheelchair-accessible customers, all by February 1, 2015?
The answer from the taxi community is “NO!” They want what should have been done in the first place; a professional and thorough study to be followed by an adherence to its findings. Those responsible in Minneapolis city government should know that unless current policy changes there will be a fight. There is no other city in the country with an unsubsidized 10% wheelchair-accessible taxi fleet, and there was zero research done by city officials before instituting this harmful and stupid policy. It is therefore unacceptable to the taxi community, who, in 2006 and after, presented several alternatives directly and indirectly to the Council, all workable and all rejected.
This is about what’s best for Minneapolis. The taxi industry is more than willing to step up and work with a City Council ready to listen to the advice of those who have practical experience with implementing and operating a wheelchair-accessible taxi program.
THE $10 HANDSHAKE
By Fred Anderson
We’ve seen it before - the $10 handshake; when a limo driver pulls up to a downtown hotel, shakes the hand of the doorman (with a ten dollar bill on his palm), and five or ten minutes later loads a customer’s luggage into the trunk. Make no mistake, there is a two-tiered for-hire transportation system in the Twin Cities, particularly in Minneapolis. One major participating group are the owners and drivers of the nearly one thousand taxis in the city. Taxi owners pay nearly $500 per year for vehicle licensing and over $5500 per year in insurance. The other group is limo drivers and owners, who pay no fees to the city, whose insurance rates are approximately half what a taxi owner pays, and who have virtually no fear of consequences.
The taxi customer base can be divided into these categories: 1) customers at events, such as concerts, games, theatrical plays, etc. 2) locals (i.e. people who live and work in the Twin Cities), and 3) travelers. If there are no scheduled events or it is a slow travel period (the days surrounding holidays, for example) the relatively small Minneapolis population can only support so much of the massive Minneapolis taxi fleet. What has happened in the last ten years is that limo drivers have slowly taken away a large portion of the traveling clientele through widespread bribery of hotel front desks and doormen.
In 2006 Minneapolis had 340 licensed cabs, which, coincidentally, is the number national surveys tell us is appropriate for a city our size. Since then the removal of the cap on the number of cabs allowed in the city has caused it to grow to nearly a thousand. Add the two hundred or so limos doing business unimpeded and the result is a theoretical drop in taxi business of over 350%. Add to that the number of hotels who, through their limo-compensated employees, will not put a customer in a cab unless there are no limos available and none expected shortly, and the number zooms to an estimated 500% proportionate drop in taxi income over the last eight years.
Taxis in Minneapolis are supposed to follow the rules set by the city, made much more difficult by the reduction of cabstands from even the 2006 level. Limos are not subject to local government regulation; they are supposedly controlled by the State of Minnesota, and the State does virtually no regulation of limousines. At a meeting with State limo regulators in August 2013, Manager of Licenses and Consumer Services Grant Wilson was told that, “The State does not want to further regulate limos.” In other words, given their past record, there are specific rules limos are supposed to follow but the regulating body has no interest in enforcing them.
In most metropolitan areas we have observed, one governmental entity controls both limos and taxis. Does this guarantee no conflicts between the two ever arise? No. Does it make it easier to resolve conflicts between the two? Decidedly yes. If the situation
was reversed and taxis were unregulated, the whine and outcry from limo drivers would be larger than large. Can city officials really expect that cab drivers will stand by while lack of enforcement destroys their business? With the City Council being revamped by the 2013 election it is perhaps the right time for us to do something.
So what do we do? We have told inspectors and council members in the past that we will not present a problem without presenting a workable solution. Our solution is for the Minneapolis Taxi Ordinance to incorporate, word for word, certain sections of State law. We suggest particularly Minnesota Limousine Regulation Section 8880.0300, which mandates rate charges be more than a taxi, Section 8880.1000, which mandates limo drivers keep track of trip records and “referral records,” the 2013 Minnesota Statutes 221.84, which mandates limos only pick up on a prearranged basis, and 2013 Minnesota Statutes 609.42, which outlines the penalties for bribery. It is thought by some in our profession that the State might welcome help with an area it has had little success regulating. We don’t know that for sure, but we do know that the State of Minnesota does not prohibit local law enforcement from issuing tickets to, or arresting, violators of State law.
The City of Minneapolis extracts nearly a million dollars annually from the thirty-five or so cab companies and the fifteen hundred or so cab drivers it licenses. What we ask in return is a little protection from the single most economically disruptive force we face. Each month thousands of bribe dollars trade hands between hotel personnel and limo drivers, and we know that if you leave a problem alone it doesn’t go away. An unchecked problem will only get larger, and the longer it is left alone the larger it will become. We urge city politicians, licensers and regulators to act before things get so out of hand that it can only be fixed by extreme, and consequently embarrassing, action. We us hope clear heads will prevail, and we continue our efforts to insure that they do.
UBER AND LYFT
By Fred Anderson
Many drivers have asked me about the struggle against TNC’s and what the rewritten taxi ordinance will be. We now have some answers, but some of these answers have indicated more questions need to be raised.
The Minneapolis City Council voted 12-1 in favor of allowing Uber and Lyft to operate in the city. According to post-vote off-the-record accounts, the eleven other council members siding with Council Member Frey on his amendment did so at least in part as a courtesy to their colleague. Wow, that’s an astoundingly flimsy reason to pass legislation! There was even an expressed attitude amongst council members of “let’s get this vote over with”, not what we would call a ringing endorsement. For some reason confirming Uber and Lyft’s entry into the city was a foregone conclusion, folks. Their minds were already made up before the process started, and all we could do is watch the predetermined drama unfold. We got some of what we wanted, but politics trumped logic in this case and it is unfortunately typical, given the tenuous relationship the Council often has with the truth.
To recap, here are major issues with TNC ‘s we wish the city had been concerned with:
- They have a history of unaccountability and illegality. Uber’s parent company Google is skilled at manipulating and cajoling local governments throughout the world in order to maintain their secrecy. Many U.S. cities have objected to their ham-handedness, and they have been booted from, as of July 8, 2014, eighteen metropolitan centers in the U.S. and at least one in Europe.
- Council Member Frey, the author of the amendment, made the claim on July 8th that the state is working on a short-term Uber and Lyft exception from commercial insurance rules with, supposedly, the TNC duo acquiring commercial insurance by January 15th, 2015. We doubt it. U & L have never had comparable insurance to taxis anywhere else in the world and it seems unlikely they will submit to it here.
- Uber and Lyft’s method of training drivers and their performance of background checks is unknown and, noting the numerous serious complaints, obviously unsuccessful. We believe that the number of major infractions by TNC drivers is significantly larger per capita than those against licensed cab drivers. Accordingly, it is a public safety issue, plain and simple.
Council Member Frey was noticeably perturbed when, after public testimony on July 8thy, he introducing his amendment with a slash at cab drivers, noting the recent Star-Tribune article about turning down people of color in favor of someone who appeared safer. But please remember, Council Member Frey, we told the Council repeatedly in 2006 that without a doubt a large number of new drivers not making money would be a problem! Also, the Strib didn’t note whether any of the 17 drivers they snared on their sting were unlicensed in Minneapolis or on the way to an order, which would at least partially negating its findings.
Council Members, we did not ask for the moon. We asked for, and have always asked for, a level playing field. If TNCs beat taxis in fair competition, so be it. But allowing an entity with a flawed business plan to operate by special rules forbidden to others doing the same job is, by definition, unfair, and that’s the opposite of what you told us initially. Members of the Council only at first mentioned “a level playing field”, changing it later to “no one is going to be completely happy with this process”. All this makes you, Council Member Frey, in our minds either a purveyor of untruth or someone with a very convenient and selective case of amnesia. You’ve only been in office for a half-year and you’ve already almost completely lost credibility with the largest city-regulated industry.
What We Won
By Fred Anderson
There are several changes to the taxi ordinance we think are improvements:
First, the wheelchair-accessible taxi policy formulated in 2006 is dead. From here on there will be an “incentive system” for w/c cabs. Companies that don’t comply will pay a surcharge fee, which can be used to train drivers to operate the equipment or to purchase anything new to “better accommodate the needs of disabled passengers.” We don’t know how this approach will work, but after the last eight years we’ve got a pretty good idea of what doesn’t.
Otherwise, there were a lot of seemingly minor items that were changed. Trip sheets will be eliminated, although that may make it more difficult for authorities to track runs. Map books are no longer required. The parking ban for cabs on city streets has been rescinded, as has the requirement that taxi companies have a business office. It will now only take five cabs to form a new company instead of the fifteen it used to be. Cabs will be able to be ten years old instead of the previous five, and security cameras in taxis will soon be mandatory. The outdated statutes on group loading and senior discounts have been taken out, and the onerous Section 341.330, which mandated only certain cabs could have a license to sit on cab stands downtown, was removed. This ill-conceived rule, passed in the mid-nineties, was never enforced, possibly because even the thickest council member or aide could see cab-insurrection if implemented. It was, boys and girls, used as a threat to keep those nasty licensed “hacks” in their place. If you think city government treats us as children now, you should have seen it ten and twenty years ago. Yes, the city has been messing with us for a long time.
Zack Williams of Rainbow Taxi in the local press called the ordinance changes a “victory”, although he further states we are still not operating on a “level playing field.” Some think we could have gotten more, but what we really may have gained from all this is an ally in Council Member Abdi Warsame, who was responsible for the previously mentioned improvements in the taxi ordinance. Although technically a sponsor of the new TNC ordinance, Mr. Warsame, whose ward includes the West Bank, home of a large percentage of the city’s taxi drivers, apparently early in the process started wishing the whole TNC issue would go away. Speculation is that he may have gotten an unsettling early introduction to city politics and its perils. A knowledgeable member of the disabled community we know called the City Council “slippery,” and we tend to agree. But this is the devil we must deal with, and like it or not we will have to be political as well as practical.
A WORLD OF CAB DRIVERS
- In Washington D.C. a Uber driver, while being questioned by a taxi inspector with a customer in the back seat, decided to bolt and lead police on a high-speed chase that lasted more than ten minutes. The customer finally grabbed the driver and forced him to stop. Uber, typically, responded only that the driver is now “deactivated.”
- In New Orleans Mayor Mitch Landrieu has fired taxi bureau head Malachi Hull after charges of fraud and assault were substantiated. According to reports Mr. Hull witnessed a taxi inspector assaulting a Haunted HistoryTour tour guide without intervening. Several other taxi officials have been arrested on various felony counts, and finally the mayor of the “Big Easy”, a city known for corruption, has had enough.
- In Calgary Alberta a city councilor who had been pushing the addition of several hundred new taxi licenses has “backed down in the face of criticism from drivers.” Councilor Ray Jones says instead he will wait for the city’s Taxi and Limousine Advisory Committee, which previously rejected adding 310 new licenses, to bring forth a new proposal. The lessons are apparently that Mr. Jones and his ilk are everywhere and that they are relentless.
- The city of Toronto Canada last month mandated new laws designed to force all 5200 cabs in the city to become wheelchair-accessible. The total cost to the taxi industry will be nearly $400,000,000 by the year 2024. No mention of where the money will come from was addressed. Needless to say, the Toronto cab industry was up in arms, wondering how such an impossible amount of money could be raised. But they assume the boondoggle was an oversight and that they will be able to sit down with the city “to discuss how to subsidize the industry to reach the goals the city has set.” We sincerely hope that they will have better luck against Canadian authorities than we have had against our supposedly progressive city government in Minneapolis.
(Sources; Huffington Post, The Taxi News)
TWIN CITIES CHECKERED TRANSPORTATION HISTORY
By Fred Anderson
The mistakes by the Minneapolis City Council in taxi regulation over the last few years are only the historical tip of the iceberg when it comes to transportation policy. There have been decisions made in the more distant past that have been, if it’s possible, even more shameful. It’s time to review, not for the purposes of gloating, but to get a perspective on how corruption can work against the common good and how we might gain insight on how to avoid it in the future.
The Twin Cities from 1875 until 1954 had streetcar service that stretched from Lake Minnetonka in the west to Stillwater in the east, a distance of over forty miles. At its peak there were 524 miles of tracks, and it was said that at that time every person in Minneapolis and St. Paul lived no further than 400 yards (less than a quarter of a mile) from a streetcar line. Thomas Lowry, who has his name on streets and hills in the Mill City, founded the Twin Cities Rapid Transit Company in 1890 after a merger of the Minneapolis line with the St. Paul line. This firm also owned and managed buses, a practice which eventually led to the undoing of the streetcar system.
Streetcar ridership reached its height in 1922 with over 226 million passengers. That, by the way, is nearly three times the number of people who used both trains and buses last year. Depression in the 1930’s and war in the 1940’ss caused the fortunes of TCRT to fall and rise and inevitably fall again after the end of the greatest war in history. Reaching the same point of decision, many other cities made plans to adjust service in the post-WWII era. The advent of mass ownership of automobiles and a movement of many urban dwellers to the suburbs made streetcar systems all over the U.S. face the same dilemma.
Other players soon appeared on the scene. An organization called National City Line (NCL), which was bankrolled by General Motors (a primary manufacturer of buses), Standard Oil, and Firestone, made a nation-wide effort to destroy streetcar systems all over the country. In 1949 here in TC land, Charles Green, a Wall Street investor, wrestled control of TCRT from D.J. Strouse, who had been determined to do whatever necessary to preserve Twin Cities’ streetcars. Green, self-described as “a man always looking for a way to make a fast buck”, thought he could do it again in our metro and was probably discouraged to find overhaul of the system was necessary. He made the decision to dismantle streetcar service, which was cut short by the discovery of his ties to organized crime. Control of TCRT was then assumed by his lawyer, a man named Fred Ossanna.
Ossanna also had connections to criminal elements, a fact not discovered until after streetcars were replaced by buses in 1954. He went to prison for fraud, after it became known he was taking kickbacks from salvage yards anxious to procure the scrap from discarded rails and tracks. But as I said, by that time it was too late.
Twenty years ago an elderly customer of mine told me that as a city council member during those years he saw how corruption reached all the way to Council chambers. Minneapolis is probably no more corrupt than any other city, but in the days before bloggers and electronic media it was seemingly much easier to get away with it. A few other cities resisted the influence of National City Line and modified their streetcar systems to fit the new economic realities. The Twin Cities did not, and for many years afterward had to face the fact that it was the only large metropolitan area in the country without mass transit other than buses. It is my view that this carefully hidden embarrassment was at least partially responsible for the creation of the Metropolitan Council. Although it is denied publicly, the movers and shakers of this community know that we cannot afford to have gangsters make such far-reaching policy decisions because they will always decide for what makes them the most money. Although many people don’t like that the Met Council is appointed and not elected, it is unlikely that with them we would find ourselves in this position again.
Choices made can have serious repercussions down the road. We lost, in streetcars, something that made us unique. Not only that, it was a crucial element; the Twin Cities at one time had the best public transportation in the country. Removal of the streetcar system ended any chance of that continuing. The transportation decisions we make today are therefore more important for the future of our city than most of us realize. We have to get it right.
A RESTAURANT REVIEW
Nicollet Island Inn
95 Merriam Street - Minneapolis
By Fred Anderson
The Nicollet Island Inn advertises itself as the most historic hotel in Minneapolis, and it may be. There are several other inns with a similar motif in the metro, so what makes the Nic Inn think they are better?
Well, the food is certainly better than the other restaurants at comparable hotels. I had scallops with braised leeks, the same as I’ve had in other restaurants around the U.S. The staff was flexible enough to substitute a side order for an item I was allergic to, which I appreciated. My friend had Trofie, which contains shrimp and scallops in a parmesan cream base. We considered both meals to be excellent. Indeed, I have eaten scallops several times in coastal areas where seafood is more likely to be fresh, and this particular meal was the best I can remember. My friend raved about the trofie, considering it also to be primo. It was a really good combination of great food and wonderful service.
. Business was slow that night at the Nicollet Island Inn. Our waitress was very attentive, although the sparse crowd may have had something to do with that. The prices are high, but other eateries downtown charge more for the same. Still, it’s easy to see the Nicollet Island Inn as a great place to dine on a special occasion.