Archive | Taxi

Portland Continues Taxi Cartel

William Thompson is a research associate at Cascade Policy Institute.

Imagine an industry where two companies control 75% of the market, price-competition is non-existent, and new firms are prohibited from entering. While economists refer to this as an oligopoly, taxi customers in Portland know it best as high prices and long wait times.

On April 9, 2008, the Private for Hire Transportation Review Board voted down a proposal to end the long-standing moratorium on new taxi permits. Leaders cited the need of a “market-demand” study (at a cost of $130,000) before moving forward. But elsewhere in the economy, no such studies are necessary. When entrepreneurs introduce new goods or services, consumers vote with their dollars to determine whether or not there is a “market demand.”

Prohibiting new businesses inevitably raises the cost of service to consumers.  The Review Board demonstrated that itself earlier that same morning  by sponsoring an “emergency ordinance” which the City Council approved to increase the maximum rate taxi drivers can charge.

This is just the latest example of the price-gouging allowed by the Review Board. When Broadway Cab acquired Sassy Cab in October 2007, effectively decreasing competition, the board said nothing. Yet, when numerous town car companies began charging prices below the required minimum shortly thereafter (thus increasing competition and lowering prices for consumers), the board acted swiftly to increase enforcement of the mandatory “minimum price”.

Instead of awaiting approval to spend $130,000 on a “market demand study,” here’s one for free: Disallowing new companies from entering the market and restricting price competition lowers the quality of service customers receive and raises the price they must pay. The Review Board should just get out of the way and allow customers themselves to determine how many taxis the city needs.

Updated: Green Cabs Wilting?

Updated August 21st, 2006

Green Cabs has avoided a City-imposed shutdown. According to a report in the Oregonian on Friday, Green was determined to be in compliance with City regulations after a new inspection. A City press release confirms the new status.


Original Post August 8th, 2006

The City of Portland is getting ready to yank operating permission for Green Transportation for a variety of violations under the headings of safety, access and public convenience. This City is also levying fines of $35K+. Green can appeal or seek to rectify the problems.

Full details below.

City Issues Notice of Suspension to Green Transportation for Public Safety and Access Violations

The Office of Management and Finance Revenue Bureau is continuing its investigation of Green Transportation and has issued a notice of suspension for public safety and public convenience violations of City Code

FOR IMMEDIATE RELEASE Contact: Mary Volm, 503-823-7785

CITY ISSUES NOTICE OF SUSPENSION TO GREEN TRANSPORTATION FOR PUBLIC SAFETY AND ACCESS VIOLATIONS

Civil Penalties Also Assessed for Administrative and Reporting Violations

(Portland, OR) The Office of Management and Finance Revenue Bureau is continuing its investigation of Green Transportation and has issued a notice of suspension for public safety and public convenience violations of City Code. The investigation was launched July 28, 2006 after receiving several complaints and found serious violations by this taxi cab company that created public safety concerns and exposes the City to potential liability.

The company received notice today that they will be required to suspend operation on Thursday, August 17, 2006 at 12:01 AM, a ten-day notice required by City Code.

The public safety violations include:
· Drivers working more than 14 hours per day
· Vehicle camera (provided by the City of Portland) missing or not operating
· Substandard vehicle maintenance
· Vehicle insurance discrepancies

Public convenience violations are:
· Only one Wheelchair Accessible Van (WCA) operation when five are required
· Failure to provide city-wide service

In addition to suspension, the City is assessing Civil Penalties for administrative violations of the code in the amount of $35,860. The cited administrative and reporting violations are:
· Failure to keep adequate driver time records (trip sheets)
· Failure to file appropriate accident reports with the City of Portland
· Failure to notify the City of suspended licenses of drivers
· Switching taxicab ID plates from WCA vans to sedans

“It is our responsibility to regulate this industry,” said Terri Williams, Manager of the Revenue Bureau’s License and Tax Division. “If we know of these violations and do not take action, we are putting both the traveling public and the City of Portland at risk.”

Green Transportation can appeal both the assessment and/or suspension to the code Hearings Officer within ten days of receiving notice. The City has given until August 28, 2006 to correct these violations. If corrections are verified by the City, the suspension will end August 29, 2006 at 11:59 PM. If corrective actions are not made by then, the suspension will continue until corrected and verified or until October 2, 2006 when a Notice of Revocation of their company permit will be issued.

Out of 382 permitted taxicabs in the City, Green Transportation is permitted to operate 48 cabs. The City has only suspended one taxi cab company during the history of the regulatory program. The suspension was for a lack of adequate insurance violation only and the company was reinstated within three days.