New Valley Taxi Franchise Could Be Fare Game

One of the first things you notice about New York City is the ubiquitous taxi--a lemming-like lemon-colored assemblage, shuttling time-pressed New Yorkers, many of them business people.

As a child growing up in Chicago, I remember the collection of cabs that operated a jitney service--taxis that ran (more or less) fixed routes, transporting workers and grocery-toting shoppers up and down the main streets of my grandmother’s working-class neighborhood.

My daughter is growing up in the San Fernando Valley. To help her learn to identify the world around her, we play a game in which she points out the various types of vehicles on the road: big truck, little truck, car.

I wanted to toss in “taxi,” but we couldn’t find enough examples to make the lesson stick.

As the Valley sheds its quaint-suburban image and takes its place among the economic players in the region, it is burdened with a transportation system crafted in the Pleistocene era. That’s changing, albeit at a glacial pace.

In August, all 10 of the lucrative franchises granted to taxi companies in the city of Los Angeles will be up for renewal. To prepare, the city is working with a Massachusetts-based consultant to rethink how best to serve the needs of the taxi-taking public throughout the city. City Hall sources said particular attention will be paid to addressing the needs of the Valley.

That’s not a moment too soon for a number of people in the business community who are taking on the transportation issue as a business issue.

“This is very clearly a business issue,” said Robert L. Rodine, a management consultant who co-chairs the transportation committee of the Valley Industry and Commerce Assn. “Expediting business traffic is good for business.”

This week VICA is set to release a position paper urging the city to review the guidelines governing the granting of taxi franchises, “with an emphasis on the benefits of competition and better service.”

Currently, the city has authorized only two franchises for the Valley. One is held by Van Nuys-based Valley Cab Co., which is licensed to operate 96 cabs, and the other by United Taxi of San Fernando Valley, an Echo Park association that is licensed for at least 85 cabs.

That’s roughly 180 cabs to serve 1.279 million people, or one cab for every 7,000 residents. I hope it’s a really big cab.

By comparison, eight companies, running nearly 2,000 cabs, are licensed to serve the basin, for a ratio of one cab for every 1,250 people.

Even someone with limited math skills can see that there’s an imbalance.

“They need a bit more service in the Valley,” said James Okazaki, a senior engineer with the city’s transportation department who is in charge of the franchising operation. “It’s obvious when you see the deployment of taxis, with only two [operations] in the Valley.”

So why the lopsided lineup?

“Sixty years ago, the Valley did not exist as an industrial or commercial type part of the city,” explained Okazaki, whose office is working with the consultant, Multi Systems, to determine if there is a need for more service in the Valley. “Even in the ‘50s and ‘60s it was more of a bedroom community.”

With the Valley’s business boom and increased tourism, demand for a variety of transportation options has grown, while the level of service has stayed fairly static.

“There is an outcry from people representing the Valley who think this is totally inadequate,” Okazaki added.

One of them is not Tedla Mulugeta, treasurer for United Independent Taxi Co., which includes the Valley operation.

“The San Fernando Valley people are driving their own cars,” said Mulugeta, who moved to Los Angeles from Boston and noticed a definite difference in the cab culture here. “For the existing business, there are enough taxis to operate in that area. I don’t think we need any more cabs in the San Fernando Valley.”

Scott Schaffer, president of Sun Valley-based City Cab, disagrees. He says there’s business to be found and he’s crafting a $1-million proposal to convince the city to grant him a franchise and prove that he’s right.

Schaffer, who has been in the taxi business for 22 years, said that while he is licensed to serve the other communities in the Valley, he cannot legally pick up fares in the city of Los Angeles, which covers most of the region.

He estimates that 60% of his business involves bringing passengers from the area where he’s licensed to operate into the Valley portion of Los Angeles. And what happens if one of his drivers encounters a potential fare while dropping someone off in L.A.?

“I can’t respond. Not if I saw someone on the street, not to a phone call,” said Schaffer, who added that his drivers typically must bypass potential fares, including some business customers.

But Schaffer faces a lawsuit filed by Valley Cab alleging that his drivers routinely--and illegally--accept fares in the city. Without getting into details, Schaffer called such suits common.

In the meantime, Schaffer is concentrating on his bid for a new franchise and is hopeful that this go-round, the process will be an improvement over the past, when, he said, seeking a franchise was “a laborious process with more hurdles than a steeplechase.”

Schaffer said that in the past, for example, city staff relied heavily on the word of existing franchise holders to determine if more cab service was needed.

“I would suggest that the current operators would not say, ‘Yes, you should license more cabs.’ ”

He’s right. Spokespersons for both United and Valley Cab forcefully presented The Times with arguments against authorizing another franchise.

“There is not any day, anywhere where anybody has all their cabs out,” said a spokesperson for Valley Cab who estimates that often, more than half of that firm’s fleet sits idle. “If I could put 80, 100 cabs out on the street don’t you think I would put them out?

“There is not enough business for a third cab company in the Valley.”

Like many things municipal, the discussion of who should and should not get a franchise becomes politically charged. There are allegations and countercharges of who’s doing what both over and under the table.

And there’s money. United paid $1.4 million to obtain its franchise when the previous owner, Schaffer’s former employer, went bankrupt. The two Valley franchises are said to be worth several million dollars each.

And what would a politically charged arena be without political contributions?

Cab operators citywide made more than $33,000 in political contributions to city candidates and officeholders between 1992 and 1996, the most recent data available, according to the city’s Ethics Commission.

And, according to ethics commission figures released last week, between Oct. 1 and Dec. 31, 1998, taxi companies citywide paid lobbyists more than $25,000 to advocate their positions at City Hall.

“In a business that is heavily regulated by municipalities, it’s important to be able to be involved in the political process and have access,” said one cab industry insider. “I do believe the contributions help.

“I don’t mean you’re buying a vote because I don’t think it does,” he said. “It gives you a forum to express your thoughts on the issues.”

In most businesses, of course, customers--not politicians--decide whether there’s room for one more competitor.

If the Scott Schaffers of the world get new franchises and the established businesses are right, the newcomers will lose their collective shirts and then look into exciting careers in waste-disposal management.

If they’re wrong, maybe we’ll see more cabs on the street and my daughter can expand her vocabulary.

Valley @ Work runs each Tuesday. Karen Robinson-Jacobs can be reached at Karen.R[email protected].