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HomeMy WebLinkAbout14 - Orange County Taxi Adminstration Program (OCTAP)May 11, 1998 Agenda Item CITY OF NEWPORT BEACH ADMINISTRATIVE SERVICES DEPARTMENT Resource Management • Human Resources • Risk Management • Fiscal Seri Ices • M.I.S. • Revenue • Accounting DATE: May 11, 1998 TO: MAYOR AND CITY COUNCIL MEMBERS FROM: Glen Everroad, Revenue Manager RE: Orange County Taxi Administration Program (OCTAP) Background 14 r? r I4 Cc?t;NCiL C{l Y OF NE JP0 RTBEACH t MAY I ..NUVEDr During the public comments section of the April 13, 1998 City Council Meeting, Mr. Steve Roditas communicated to the City Council his displeasure with the OCTAP program, and provided the City Council a letter listing the names of eight taxicab companies (copy attached). Council has requested staff return with a report regarding Mr. Roditas's concerns. Cities have been relegated the responsibility of taxicab regulation by state law, and taxicabs are the only inter -city public transportation service not regulated by the Public Utilities Commission. Newport Beach has regulated taxicab operations since 1959. The City Council approved the agreement to participate in OCTAP in March of 1997. In December of 1997, Council adopted revisions to the Municipal Code regulating taxicabs (Chapters 5.12 & 5.17). These revisions established that the regulatory processes previously conducted by the City (investigation of companies, their vehicles, insurance and drivers) would become the responsibility of OCTAP in January of 1998. Notice of these changes was provided to all taxicabs operating in Orange County. OCTAP has been administering permits since January of 1998. Regulatory permits issued by the City prior to January of 1998 remain valid for one year, and no OCTAP permit is required by the City of a company until the expiration of their City permit. Discussion Two days after his presentation to Council, I met with Mr. Roditas and several of the other companies listed in Mr. Roditas' letter during the quarterly meeting of OCTAP's Steering Committee. The committee communicated with Mr. Roditas or, each of the issues identified in his letter. I have also investigated his issues with OCTAP staff. The concerns he has articulated, and the results of my investigation of them is as follows: • Mr. Roditas' letter states that the undersigned eight companies are writing to urge the City Council to w4t12draw front the OCTAP program. The letter submitted to Council was not signed by any of the eight companies listed (including Mr. Roditas's company). OCTAP staff has indicated that the original version of this letter was originally circulated by another of the companies (A Taxi) listed on the letter on March 12. That letter was signed by six companies, three of which are not licensed to do business in the City of Newport Beach. • The Roditas letter stated that the OCTAP program is not turning out the way it was originally presented to the industry and the Council, and that the intent of the program was to reduce administrative costs by centralizing the process. The first presentation of the OCTAP program to the City Council was my report to Council on March 24, 1997. This report stated the OCTAP objectives are to increase public safety, reduce administration costs for the public and private sector and to expand private transportation services in the County. These objectives are identical to the objectives represented by OCTAP to the industry in July of 1997. A significant objective, not articulated but certainly acknowledged by both the private and public sectors, has been the stabilization of a very volatile industry. The OCTAP program is in its fourth month of pursuing these objectives. In this short amount of time the program has succeeded in increasing public safety by improving (and with many of the participating jurisdictions instituting) vehicle inspections, driver reviews and drug testing, and ensuring compliance with insurance requirements. Public sector administration costs have not just been reduced, but virtually eliminated - an objective realized by the 22 participating cities the day they turned regulation over to OCTAP. The objective of expansion of private transportation services in the County has also been realized by the Orange County Transit Authority (OCTA) contracting of OCTAP permitted taxicab companies to provide transportation services in areas where the economics prohibit operating OCTA busses (i.e. American Disabilities Act transportation services in Mission Viejo). OCTA has indicated that contracting with taxi cabs will increase as the number of OCTAP permitted taxis grows, increased stabilization of the industry and an improved public image of taxis as a reliable source of public transportation. An objective that OCTAP has yet to fully realize for every participating taxicab business is reduced costs. A company previously operating exclusively in a city that did not regulate or tax taxicab operations (bake Forest and Mission Viejo were the only two) now realize significantly increased costs ($1000 plus $225 per vehicle). However, most taxi companies service the communities in the County with the greatest demands for their services. Not coincidentally, these are the same cities that imposed regulatory fees and business license taxes. Fourteen of the OCTAP participating cities have eliminated regulatory fees and only impose a business license tax. Depending on the cities services, the OCTAP regulatory fees paid by taxicab companies operating in more than two or three of these fourteen cities are less than the aggregate of fees previously individually imposed by these cities. However, some taxicab companies would only obtain the regulatory permits for a portion of their fleet in the communities with a high enforcement profile, and take their chances in the cities with lesser enforcement. These companies have probably realized increased costs with the OCTAP permit fees. The OCTAP Steering Committee will continue to pursue ways to reduce the costs for smaller companies operating in a limited number of cities. In just three months of operation, OCTAP has made significant strides in reaching each of the stated objectives. This program has much more to do to fully realize the potential in achieving the stated objectives. • Mr. Roditas was critical of the OCTAP insurance requirements, and represented that OCTAP's $IMillion combined single limit requirements were "ridiculous" when all but three of the OCTAP participating Citv's previous requirements were $300, 000. The results of a survey of the previous insurance requirements of the twenty-two participating OCTAP cities were not available in time for inclusion in this report. The OCTAP insurance requirements received considerable deliberation by OCTA's risk manager, the Steering Committee and participating cities' risk managers. Without exception this group recommended the OCTAP insurance requirements. This City's Risk Manager and the Assistant City Attorney also reviewed and approved the insurance requirements proposed in OCTAP regulations. Review of participating member's municipal code requirements relating to insurance related that most cities had not updated their insurance within the last ten years. Moreover, some cities had not adjusted their insurance requirements since adopting their taxicab regulations. Newport Beach had not increased its insurance requirements in the last ten years, and with the revisions to the Vehicles For Hire Chapter (5.12) our insurance requirements for other public transportation vehicles was brought to the same standards as the OCTAP requirements ($1 Million). s Mr. Roditas' letter stated that u4thdraiving from the OCT.4P program would "be giving small business a shot in the arm ", in that our former permit fees just covered our cost of administering the program. The City, similar to the insurance requirements, had not adjusted the taxicab regulatory fees within the last ten years. Mr. Roditas' assumption of the City's cost recovery based on the previous fees imposed by the City is not founded in fact. Withdrawing from OCTAP would result in this City imposing our own fees, plus subject his company to either the nine other cities' fees he reportedly operates in or the OCTAP fees. In either case, the cost to Mr. Roditas would be greater than the fees lie is currently paying to OCTAP. Conclusion In March, OCTAP provided notice to all unlicensed taxicabs operating in Orange County that enforcement of OCTAP requirements would begin. OCTAP also communicated to participating cities law enforcement their desire for assistance in enforcing OCTAP permit requirements. Mr. Roditas was cited by Newport Beach Police on March 26 for operating without driver's or vehicle permits. Following Mr. Roditas presentation to Council, lie requested and received a reprieve from our Police Department. Mr. Roditas applied for the OCTAP permits, and seventeen of his vehicles were permitted by OCTAP on April 23 (ten days following his presentation to Council). Glp Everroad, Reven4 Manager Attachment: Roditas Letter CITY OF NEWPORT BEACH POLICE DEPARTMENT April 30, 1998 TO: Mayor & City Council Members FROM: Lieutenant J. Carson SUBJECT: TAXI CAB ENFORCEMENT BACKGROUND Prior to January of this year, the Police Department was involved in the process of regulating taxi cabs that operated in Newport Beach. The inspection of taxi vehicles alone took motorcycle officers out of the field for hours at a time, and there was no consistency between cities. We enthusiastically supported the OCTAP concept, realizing that some start up problems would occur in the first few months as OCTAP came online and the cab companies and their employees applied for permits. DISCUSSION In the first couple of months after OCTAP took over, it became apparent that the cab companies were slow to apply for the proper permits. We did no enforcement, still believing that things would fall into place quickly. Interestingly enough, it was Mr. Steve Roditas who, on March 19`h, first pressed the enforcement issue, demanding that we locate and cite cabs from companies other than his own for lack of permits. He also complained about other companies "jumping calls" using a scanner. This led to counter charges from other companies against Mr. Roditas and his company. After speaking with him (and determining that he had not applied for his OCTAP permit until March 91h, 1998), we began citing cabs without business, driver or vehicle permits. We did not single out South Coast Cab or any other company, and, in fact, cited cabs from South Coast, Active Taxi, Diamond Cab, California Yellow 'Cab, Yellow Cab Laguna Hills and AAAA Yellow Cab. These citations have resulted in many more applications for permits and we have received feedback that among the drivers the "word is out" that "you need a permit in Newport". On April 17`h, Mr. Roditas and three associates came to the Police Department to complain about citations received by their drivers. He told me that his business would be 100% permitted by Wednesday, April 22"d and asked that we do no more enforcement until then. I agreed to do so, and on the 22"d I received a message from Ed Penyamin, Operations Manager of South Coast Cab, stating they needed one extra day to comply, and I honored that request. On April 22nd I attended an OCTAP Safety Committee meeting at OCTA headquarters in Orange. At that meeting I found that at least one company is now in full compliance, many others are close, and that not all companies were unhappy with our enforcement. .01 Taxi Cab Enforcment Page 2 One issue brought to the Safety Committee by OCTAP staff was a complaint by cab companies that background checks sometimes take 10 or more days, days they want a new driver on the street. Staff asked for direction from the committee as to whether or not drivers should be allowed to work prior to the background check. I mention this because it directly addresses the reason we need to regulate taxis- to ensure the passenger is in a safe vehicle with a safe driver. I told the other committee members it could be tragic if we allowed a person with a history of sex crimes to drive prior to the background check and subsequently commit a crime. This feeling was unanimous. In summary, OCTAP is working. It saves cities money, provides consistency and full compliance is improving. More cities are joining OCTAP, and eventually all the companies doing business in Newport Beach and throughout the county will be in full compliance. As of April 30, 1998, Mr. Roditas' company has been issued an OCTAP temporary business permit, 24 of 29 cabs have passed inspection, and 22 out of approximately 29 drivers have received permits. It appears that although he expressed dissatisfaction to the City Council, he has since decided to comply with the OCTAP permit program. Respect y ubmitted, 1 arson, ieutenant 6 Mayor and City Council Members City of Newport Beach Newport Beach, CA April 13, 1998 Dear Mayor and City Council Members: We, the undersigned, are all owners and/or general managers of taxicab companies that operate in Newport Beach. We are writing to urge you to withdraw from the OCTAP program. While we agree in the concept of County -Wide testing and monitoring of drivers and vehicles, the program is not turning out the way it was originally presented to us and you. The program was started to reduce administrative costs by centralizing the process. While there may be savings somewhere, we, the operators, are not seeing any of them. In fact our costs are shooting up dramatically because of this program and many of us may not be able to survive. It is rediculous for the county to require us to maintain a $1 million liability policy on all of our vehicles when all but 3 of the cities require $300 thousand or less (Newport Beach is currently with the majority at $300 thousand). This requirement alone is going to put many of us out of business. The $225 per cab fee for a 10 minute inspection is outrageous. Further, several Orange County cities are still charging for inspections. The drivers are finding it very difficult to come up with the $160 for their "county -wide" permit. In the past, drivers would get permits in 1 or 2 cities at a far lower cost and at different times of the year. Your staff report said that your old inspection method was revenue neutral, that is permit fees just covered the cost of administering the program. You will be giving small business a shot in the arm by withdrawing from OCTAP and re -instating that revenue neutral process. Please think carefully about us small business people who are trying to realize the American Dream. Withdraw from OCTAP!!! Diamond Cab Company Coast Yellow Cab Company Checker Cab Company Orange County Yellow Cab Company South Coast Cab Company, Inc. A -Taxi California Yellow Cab Company Yellow Cab of North Orange County IVA