Sam Smith on Taxi Meters - Washington DC Taxicab Market

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Washington City Paper
7 February 1996

METERING OPPORTUNITY

by Sam Smith


Just when DC needs every taxpayer it can get its hands on, the city is once again on the verge of making it harder for someone to make a living here. The city government appears close to requiring meters for the DC's 8000 cabs, a move that would severely hobble, if not destroy, the taxi industry as a major tool of local upward mobility.

DC now has more cabs per capita than any other city in America. If all of DC's cabs were owned by one company, the firm would be the city's largest private employer. The industry serves as a remarkably efficient example of what is known as para-transit, that is to say a form of moving people about more public than a car, but less so than, say, a bus.

Yet this could change quickly once meters are installed. The reason is that meters would, for the first time, allow the entry of major corporations into the local taxi business. Without meters, only the drivers knows for sure how much they are earning. With meters, corporations can easily keep accurate track of revenue. For the first time in our city's history, our cab industry will become attractive to big business.

These corporations, if they follow the pattern, will seek not the free marketplace but rather the collaboration of the government in a massive restraint of trade. In the taxi industry this has been traditionally done through some sort of cap on the number of cabs. For example, a study by the Department of Justice found that 87 percent of some 100 cities with taxi service restricted entry in some way. Chip Mellor of the Institute for Justice has noted that Denver routinely turned down every application for a new taxicab company from 1947 on. Chicago and LA are closed. Boston's permit costs $60,000 and New York's $140,000.

A similar trend could be expected in DC as large -- and perhaps out-of-town -- corporations move to take advantage of taxi-metering. The impact on the industry could be phenomenal. If DC had proportionally as many cabs as Paris or London, our fleet would drop more than 90%. While DC has one cab for every 75 citizens, New York City has only one for every 600.

There is almost an iron law of non-competition in the taxi industry. It dates back at least to 1636, when the owners of Thames water taxis got King Charles I to restrict the number of horse-drawn hacks to 50 in order to cut down on the land- borne competition. And it is as recent at 1962, when Chicago Mayor Richard Daley guaranteed 80% of any new cab permits to one of his buddies.

With meters, not only would the ease with which one can hail a DC cab likely disappear, so would a remarkable tradition of individual entrepreneurship -- particularly for minorities -- that the city has enjoyed almost from its beginning. My wife, local historian Kathryn Schneider Smith, found in studying the estate records of DC free blacks in the early 19th century that typically the most successful trade was that of a hack driver. Among the reasons: ownership of one's means of livelihood, a business relationship with the white community, and relief from some of the black codes -- the city's apartheid-type rules that among other things set a curfew on blacks.

Again, when blacks moved into the city in large numbers in the 1950s, it became common to find cabs providing a first or second job for new arrivals trying to gain a foothold on the economic ladder. The cab in front of a black-owned home then was a symbol of the taxi's importance in giving economic substance to the promise of civil rights. Today, the story is being repeated, only this time the beneficiaries are more often immigrants speaking an awkward dialect, a group without a movement, without a Martin Luther King Jr., and towards which hostility is increasingly sanctioned. The question of cab service has become inexorably intertwined with attitudes towards immigration and with the ethnic economic triage under which the last to come to town lose.

Although anti-immigrant prejudice is seldom explicit, its offspring crop up constantly in discussion of cab service -- concern over lack of knowledge of the city or cheating or "cleanliness." Since there is no evidence that DC cabs are any dirtier than those elsewhere, the question of cleanliness seems to suggest that something else is really being discussed here. One senses when reading Post complaints on this matter that it presumes if cabs were driven by a better class of employees under the control of proper members of the Board of Trade and Federal City Council, everything would be, for some reason, neater.

Likewise, there is an assumption that with meters, fare cheating would decline. Again the evidence is lacking. In fact, if there is one universal of the global cab industry it is that cab drivers cheat, reflecting little more than that cabbies tend to be extraordinarily knowledgeable natives who do a lot of business with extraordinary ignorant visitors. A study by US News & World Report this year found, in fact, that DC was no worse than most of the major cities it looked at. While the USN&WR study found overcharges of about 5 bucks on an DC airport run, it also reported that in New York one should ask a taxi dispatcher for the best route to your destination: "A driver who takes the Belt Parkway from JFK to midtown, for example, can add $20 to a $25 to $30 fare." The reporters were overcharged $5 bucks for a similar run in Chicago, cheated by limo drivers in San Francisco, reported occasional $20 overcharges in Boston, and so forth. Even the DC cab commission's own study found that passengers were overcharged only 17% of the time, while being undercharged 10% of the time. This in a city where you need to be conned by a factor of 50% to equal cab rates in many other places.

The metering of cabs would, admittedly, be loyal to at least one local tradition: more than three decades of abysmally poor decisions by local leaders concerning public transit. It began with the destruction of one of the country's finest light- rail systems in the 1960s, which was followed shortly a disastrous web of freeways mercifully truncated by citizen opposition. The area then conned the federal government into helping it build a subway system by telling it would have twice as many riders as was eventually the fact. Whatever advantage DC might have gained from the subway was soon lost as Metro dispersed development once centered downtown and provided easier city access for non-taxpaying suburban day-trippers. Now a city in which more than a third of its citizens are without a car finds itself being threatened with curtailment of its bus system because it can't afford its share of the suburban-oriented subway. Most recently the mayor has proposed a bizarre plan under which all tour buses were be directed to that well known visitor attraction -- New York Avenue NE -- there to be inspected for $95 by a city that supervises its own affairs only by shorting the till a few hundred million dollars and having various departments turned over to the courts.

While the gutting of the taxi industry would certainly fit this pattern, it is in no way necessary. In fact, DC is bucking an international trend towards taxi deregulation in order to improve service and reduce costs.

One of the most dramatic examples occurred this summer in Indianapolis when the city eliminated the cap on taxi licenses, set only a maximum -- but no minimum fares -- and invited businesses to start jitney service at whatever rates they wished.

In four months, the number of cab companies has doubled, fares have dropped 7% and cab drivers have even started wearing ties. Further, there has not been a single taxi-related complaint. Says mayoral special assistant Tom Rose, who spearheaded the plan, it's been a "really dramatic, dramatic improvement."

Rose said that switching to a zone system was not considered, because the changes being proposed already seemed to be as radical as local politics would allow. Certainly reviving jitney service -- lobbied out of existence across America early this century by the bus companies -- marks a radical change. A jitney is a cross between a taxi and a bus -- basically an oversized taxi running along a set route. In Indianapolis, the owners rather than the city sets the routes although Rose says the government is talking to some of the companies about providing service to help inner city resident get to jobs in outlying areas. In DC, jitney service could quickly compensate for Metro cutbacks or provide improved service, say, from east of the Anacostia to other parts of the city.

There are improvements that could be made easily to the DC taxi system to improve the lot of both the driver and the rider. For the former, splitting Zone 1 into two would mean an immediate leap in income for cabbies, much of it from government workers, journalists and tourists. For the latter, a flat airport-to-downtown fare (used in a number of cities) would eliminate many of the cheating complaints.

But in the politics of DC, such common sense solutions carry little weight. Like a kid with a watch, the temptation for our leaders is just too great. Even if it works, you got to take it apart.


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