Austin considering more permits and fees for taxi cab businesses

By • on January 11, 2012

January 11, 2012

By John Hambrick
The Digital Texan

austin cab
Photo: Creative Commons

AUSTIN, TEXAS – Austin cab drivers are up in arms about the city’s proposal to put more cabs on the streets.

The Urban Transportation Committee met Tuesday night to get input from taxi drivers about the proposal to issue 75 new permits. It was a packed house at City Hall, and the majority of people weren’t happy about the city’s new proposed regulations.

If implemented, it’s predicted that cab drivers would lose five percent of their fares.

There are only three major players in the Austin cab business; Yellow Cab, Lone Star Cab and Austin Cab. Lone Star would receive 50 permits. Austin Cab would 25. While Lone Star would get the most new permits, they would still be far behind their competitors.

The taxi cab business in Austin and in most cities is a monopoly. And government keeps it that way. Austin bureaucrats decide who is number one, two and three in this business.

Lone Star Cab is part of the monopoly, but they are on the lowest rung of the ladder because they only have 58 permits. Yellow Cab is the big kahuna with 455 and Austin Cab has 162.

Lone Star driver Nega Taddesse told KXAN TV, “In order to be in a competitive market Lone Star needs more permits to share this market competitively, it’s kind of like a monopoly and Lone Star is in unfair competition.”

And to top it off, the city also wants to tack on additional fees for those using cabs during peak hours.

The City of Austin would get a big chunk of change from the new permits and additional fees. All that most cab drivers and their customers would get out of the deal is a thinner wallet.

The city says more cab permits will help out during big events and keep the streets safer. More cabs may help out during SXSW, but the claim that more cabs make the city safer is a shaky one. If that’s the case, why not issue 200 more permits or an unlimited amount? That would make things really safe. Right?

The city looked at all kinds of population studies and mathematical formulas to arrive at their magical number of 75 new permits.

But perhaps the best way to keep Austin well served by taxi cabs is to rely on the actual market place and the demand. Real demand has always been the best way for store owners to know how much product to keep on their shelves and it’s the best way to determine the number of cabs to have on the streets of Austin.

Keep in mind, this is still in the planning and proposal stage. The Urban Transportation committee will make its recommendation to city council in February and then they will have the final say.

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