by GUY PALUMBO
Council President Sally Clark convened a new committee this year with Bruce Harrell and Mike O’Brien to consider changes to the Taxi and For Hire regulations. Seattle is proving itself to be a forward-thinking city by trying to adapt to radical changes in the personal transportation market caused by technological innovation (apps) and by antiquated regulations that predate the current council.
As STB has pointed out in the past, taxis are one component of a sustainable transportation ecosystem. The demand generators, including the hotel and nightlife industry, testified about the need for more options. Seattle ranks very low in taxis per capita. We are currently at 0.36, even lower than our neighbor Portland at 0.71.
The council has commissioned an independent study to see if there is demand for more taxis. I suspect that study will prove what most Seattle and King County residents already know: there are not enough taxis in this city. Assuming the study shows there is demand, I would suggest the following changes to move our city in a greener direction:
Deadheading is when taxis drop a passenger off and return with an empty cab. Data from Consumer Affairs shows that in their 2011/2012 time period, 55% of the 69,096,348 total miles driven by metered taxis were deadheaded. Even in a perfect world where every taxi was a Prius getting 45 mpg, taxis are wasting a minimum of 832,289 gallons of gas per year.
The main reason for deadhead trips is an outdated, 4-tiered license system that strictly regulates where certain licenses can pick up passengers. City licenses can’t pick up in the county. County licenses can’t pick up in the city. For Hire taxis can’t street hail. You can read about it here on page 6.
The solution is to allow all licenses to pick up passengers wherever they want. True, this may cause a flood of taxis into the city from the county, which could degrade service levels in the county. However the taxi industry has proven that they will rise to meet consumer needs. For example, when the city released 15 new wheelchair accessible licenses in 2009, there were 723 applicants. Which leads us to:
Lift The Cap On Taxi Licenses
Other than those 15 wheelchair licenses, the city has not released new taxi licenses in 23 years. Meanwhile there is no cap on limousine licenses which are regulated by the state. I agree with Vince Houmes from Sightline here, here and here (at the 63:36 mark) that a green alternative would be to lift the cap completely. Let the market forces find the equilibrium on the number of taxis and focus the city’s limited resources on ensuring public safety.
One negative effect is that you devalue the current licenses on the secondary market. Owners can legally sell their licenses to others. They just have to report what they sold it for to the city (honor system). Current licenses can sell from $50k – $360k depending on the type. In New York, they sell for over $1 million. In both cases, regulatory induced scarcity creates artificial value.
However, it is not the city’s job to regulate this secondary market or ensure a positive return for license holders. Anybody who made a bet on the city never issuing new licenses was making a bad bet, and shouldn’t stand in the way of changes that are better for both consumers and the environment.
Guy Palumbo is currently the Northwest market Senior Launch Consultant for HAILO, “a free smartphone app which puts people just two taps away from a licensed taxi,” a small business owner in unincorporated Snohomish County, and a Snohomish County Planning Commissioner. He is currently running for fire commissioner and once ran for State Senate.