Miami-Dade County

Miami-Dade County to consider big changes to taxi industry

 

pmazzei@MiamiHerald.com

The way some Miami-Dade politicians tell it, this fall they will drive the county’s taxicab and car-service industries into the 21st century, allowing passengers to pay for airport and seaport taxi rides using credit cards and to summon sedans from their cellphones.

But cabbies, long protected by county regulations and struggling to scrape by, hope to put the brakes on the proposals. They say the changes would raise costs and competition, threatening their livelihood and possibly even hurting consumers.

Two separate but related issues are at play: one erupting from Miami International Airport, where a new director wants to improve the taxi experience for travelers, and the other from the taxi industry, which is fighting for its life in the face of unsettling new technologies.

With county commissioners divided on the two proposals, and with interested parties hiring County Hall lobbyists, the result will almost certainly be a drawn-out political drama.

“It doesn’t mean we’re declaring war on anybody,” said Miami-Dade Mayor Carlos Gimenez, a supporter of the proposed changes. “The customer is suffering and not getting the kind of services they deserve.”

One proposal, which would require cabs at MIA and PortMiami to accept credit cards, has the enthusiastic backing of airport administrators who for years have received complaints from travelers about poor taxi service.

The other proposal, which would eliminate limits on the numbers of sedans and SUVs working for hire across the county, is being pushed by mobile technology companies seeking to expand their businesses into South Florida.

In June, both proposals were met with opposition from the commission dais even before they were discussed — a hallmark of controversial legislation involving lobbyists wrangling for votes behind the scenes. Public hearings planned for July were delayed until a special meeting Sept. 24.

Emilio González, the new airport director appointed in March, has made improving taxi service at MIA his priority, saying cab drivers are often the first people travelers deal with — “and, more often than not, it’s not a good experience.”

González cited scores of complaints from unhappy passengers who were overcharged, refused service because of short trips or prohibited from paying using plastic shortcomings that some drivers blame on poor enforcement of existing rules by county inspectors.

“We’re losing tourists one at a time until we fix this,” González said. “It’s the 800-pound elephant.”

The problem is that most drivers don’t own their vehicles, so out of the $500 to $900 they make a week, they often pay most of that to cover lease payments, said Raymond Francois of the New Vision Taxi Drivers Association of Miami. That’s why some drivers, whom he called a few “rotten apples,” overcharge or protest if a passenger wants to travel a short distance.

“The wait at the airport for a passenger is, on average, more than two hours per taxi driver,” Francois said, adding that the county should cap the amount that taxi owners can charge the drivers to lease the cars.

Legislation sponsored by Commissioner Juan C. Zapata would require cabs to offer backseat credit-card processing within a year. It would be illegal to charge passengers an additional credit-card fee, though the county would offer discounted rates to people who pay in cash.

Drivers worry that upkeep for the credit-card processing equipment would take a bite out of their wages. One possibility is for the county to require firms that sell the equipment to pay for installation and ongoing maintenance.

Another pocketbook concern for drivers: the delay in receiving payments from credit-card companies — up to two business days, according to the proposal.

“Many [cab drivers] lease the cars they drive on a day-to-day basis,” driver José Luis León said on a recent morning at MIA. With delayed credit-card deposits, he said, “They won’t have money to pay [the leases].”

Far more contentious than the credit-card requirement, which has been bandied about at County Hall for years, is deregulating the car-service industry to accommodate new smartphone-app companies that don’t have their own fleets but still dispatch cars.

Apps such as Flywheel and Taxi Magic already allow local passengers to request cabs using their phones. The tech companies work with existing taxi operators, syncing their systems so users can summon the cab nearest to them, regardless of which company the vehicle belongs to.

But the next wave of apps are designed to sidestep the taxi industry altogether.

Behind the legislative push is Uber, a San Francisco startup that has spread to 36 cities, including Washington, D.C. and London. Its principal business is letting users request for-hire rides. Similar apps include Sidecar and Lyft.

In some cities, Uber has partnered with taxi companies to also offer cab rides. But that’s not its current plan for Miami-Dade. Instead, Uber wants to dispatch any for-hire sedan driver licensed by the county.

Miami-Dade does not allow just anyone to obtain one of those permits. Applications are currently closed, and the permits have been limited to the 626 already granted.

Legislation proposed by Commissioner Audrey Edmonson would do away with those and other restrictions, allowing an unlimited number of drivers.

That change would effectively devalue existing permits, and not just for sedan drivers, whose licenses sell on the open market for between $15,000 and $25,000, according to Joe Mora, director of the county’s passenger transportation regulatory division.

The county’s more expensive, 2,121 taxi permits would likely lose value, too. The last time the county auctioned six “medallions,” in 2012, they sold for $415,000 on average, Mora said.

That’s often the consequence of new technology clashing with outdated regulations, said Nairi Hourdajian, an Uber spokeswoman. The company has encountered regulatory challenges elsewhere in the country, including in New York and Los Angeles, but Hourdajian characterized the Miami-Dade rules as among the worst the firm has seen.

“The kind of existing regulations designed to protect taxis in Miami … are fairly unprecedented,” she said. “Usually the way it works is, we enter a market and then people realize, ‘Oh, we have competition.’ This is a different animal.”

The county, for example, requires sedan drivers to pre-arrange rides more than an hour in advance, and sets minimum rates far higher than those charged by taxis. Edmonson’s proposal would eliminate the hour lead time and let companies establish rates, though the minimum for a trip must be two times the taxi meter rate for a fraction of a mile.

But altering the for-hire transportation market so dramatically, taxi drivers and owners say, would be devastating to their business.

“It’s going to be absolute disaster,” predicted Akhtar Kamal, 52, who has driven cabs on and off for 28 years and purchased a medallion for $135,000 in 2011.

Last year he received the county’s $2,500 Chauffeur of the Year award for driving a sick college student to the hospital and carrying her into the emergency room.

Even drivers like himself who own their own vehicles have to work 12- to 14-hour days, six to seven days a week, to be profitable, Kamal said, noting the seasonal slowdown in demand during the summer. With his hours, Kamal said he makes about $35,000 a year.

Inundating the region with new for-hire sedan drivers — many likely part-time workers jumping at the chance to make extra cash — would result in a supply glut, Kamal said, putting professional cabbies out of business. More affluent customers planning longer trips with pricier fares would turn to sedans over taxis, sticking cabbies with short trips and low fares.

Unlike taxis, which under county rules cannot hike prices arbitrarily, the new drivers would be able to raise their own rates, Kamal and other drivers and owners fear.

They pointed to Uber’s public-relations disaster when it raised prices during floods in Toronto — a step the company said at the time was necessary to attract drivers to the business and ensure an adequate supply of cars.

The South Florida Taxi Cab Association has been forcefully battling Edmonson’s proposal. When the ordinance came up for a tentative vote in June, drivers wore protest signs printed on yellow sheets of paper hung over their necks.

Still, some taxi drivers and owners say they are willing to work with the county to improve cab service and implement new technology more quickly.

“We recognize that there are some regulatory issues that need to be addressed” in the taxi industry, said Diego Feliciano, who heads the cab association, which supports the credit-card payment requirement at the airport and seaport. “We’re working on them.”

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