TAXICAB FRANCHISE REPORT

It is recommended that City Council:

1. Select a taxicab processing system from the alternatives identified below.

2. Direct staff to implement the processing system selected.

3. Select taxicab stand locations.

BACKGROUND

At the June 11, 1996 meeting, Council set the taxicab fare rate at $.20 per mile, and $4.00 per hour waiting time as requested by the South Bay Yellow Cab Company Cooperative. Council also discussed going out to bid for an exclusive franchise for taxicab service but did not reach a consensus on the issue. Exclusive franchising was to be revisited based on how the taxicabs functioned downtown and if any complaints were received by the city.

Since that time, staff has received minimal complaints about the conduct of the taxi drivers. The major concerns expressed by our citizens fall into two categories. The amount of taxicabs (20 to 30)) on busy weekend nights is a visual plight on the community. Conversely, others believe the amount of taxicabs serve a very beneficial function for easy access to our downtown (no parking hassles) and safer leaving by not having to drive home. The second major concern is the taxicab stand locations. The current temporary locations have displaced some local parking that used to be yellow zones which afforded free parking during evening hours to local renters and business establishments for a quick stop-and-go of merchandise or food without getting a parking ticket.

Ed Ruzak, City Traffic Engineer, has reviewed several locations along Hermosa Avenue and Beach Drive between 10th and 14th Streets to determine the potential for installing taxicab spaces. Attached is Ruzak's report and prioritized recommended locations as requested. (See memorandum dated October 1, 1997 "Potential locations for Taxicab Parking Hours.")

The huge success of our downtown plaza area this summer has brought the taxicab issue to our attention because Hermosa Beach has become a destination for the greater Los Angeles area. Historically, the city may have licensed a few taxicabs but enforcement of city codes was on a complaint basis only.

ANALYSIS

Throughout the Los Angeles region, most cities with airports, large amusement parks or attractions have municipal code sections to license and regulate taxicab services. Most smaller cities that do not have any specific taxicab problems do not have formal licensing programs. Many cities were surveyed and the results varied from the minimum of charging for taxicab licensing fees only, with no city follow-up or enforcement programs, to full-blown programs as exists in the City of West Hollywood, which has enormous parking issues.

The City of West Hollywood maintains a Transportation Manager and a full-time employee whose only function is to deal with taxicabs, licensing and enforcement. Also, a Transportation Committee reviews licensing applications and hears revocation hearings. Revocation hearings on taxicab licenses can be a very expensive legal review process. West Hollywood pays for its taxicab program by offsetting revenue estimated at $200,000 a year. The City of Beverly Hills has a similar stringent program.

The surrounding South Bay cities' municipal codes regulating taxicab services are similar in content to that of Hermosa Beach. City fees vary with the amount of process and enforcement required. Control as to the amount of taxicabs allowed in the cities for pickup fares is decided by either a designated committee, City Council or City Manager's designee, such as the Chief of Police.

Usually a person is designated in city hall who is specifically assigned to license, administer and monitor taxi companies. A Code Enforcement Officer or the Police Department conducts enforcement. Cities tailor their enforcement based on local need for taxicab services and city resources. The need for taxicab services is currently high in our city but this need has to be balanced with legal requirements and city resources.

TAXICAB FRANCHISING

Taxicab franchising is also a means of control in order to limit the demands placed on the city by limiting the amount of taxicab companies or independents that may wish to operate in our city. This would reduce the competition for service providers to only those that can afford to acquire insurance bonds, pay for city fees and maintain driver permits as stipulated in the Hermosa Beach Municipal Code Taxicabs Chapter 5.72. Franchising would reduce independent, illegal taxicab operators by identifying the legal operators with a highly visible sticker affixed to the cab and then enforced by the city. The sticker system along with the City of Hermosa Beach painted on the sides of the cab are the most common means employed by other cities in identifying legal operators.

Attached is a sample copy of the City of Manhattan Beach taxicab requirement information list and the stickers used.

Finally, there is no State statute authorization for exclusive franchising; nor is there a State statute not authorizing exclusive franchising.

ALTERNATIVES

Listed are staff recommended considerations for deciding the degree of involvement desired by Council. The items are presented from the minimum legally required to a full-service process with associated costs.

A. Miminum

New State Law, Senate Bill 46, requires that taxicab drivers be screened for drugs. Mandatory drug testing from federally approved labs must be enforced to ensure compliance with regulations. The Senate Bill provides a list of the labs that are qualified. The taxi companies pay for the testing.

The city can issue a taxi license given proof of the driver(s) having successfully passed the drug screening. A sticker would be issued with the permit identifying the driver. City employees would enforce the new law through the license and permit procedure process. Costs are minimal and can be handled through existing licensing.

B. Intermediate

This level includes the above A, issuance of business permit and license fees coupled with proof bond or insurance required. Such policy of insurance shall be limited to not less than fifty thousand ($50,000.00) for the injury or death of one person, one hundred thousand dollars ($100,000.00) for the injury or death of two or more persons in any one accident, and twenty thousand dollars ($20,000.00) for injury to or destruction of property in any one accident. City shall be named as co-insured on the policy. City Hall employees through the normal licensing and permit process would also handle this level. However, the requirement for insurance bonds raises the specter of conducting revocation hearings on license and permit issued. As stated earlier, revocation hearings can become very cumbersome for employee staff time and legal representation.

C. Full Service

Full service includes all the above A & B and the enforcement of all the Hermosa Beach Municipal Code Sections in Chapter 5.72, "Taxicabs."

Foremost, taxicab service enforcement and all associated matters needs a single point control within the current city structure. This was the paramount finding from our survey contacts. Cities that had splintered responsibilities throughout have evolved to the single person/office approach. This person/office is usually located in City Hall or within the Police Department. Single point control maintains direct accountability, control and ease of audit. Their task would be to oversee and administer the program from initial application process, licensing, permitting, driver identification, taxi inspections, to conducting revocation hearings and complaint processing. The Finance Department would still administer all money transactions.

This position could currently be prescribed to the Support Division in the Police Department, directly assigned to our Administrative Review Investigator in the Parking Enforcement Bureau. This position is a three-quarter-time position costing $23,439. Making it a full-time position with benefits would increase annual salary to $33,648.

Other suggested items for Council consideration for full-service operation are:

• Set a limit of number of taxicab companies and taxicabs we need for the city and use the public convenience and necessity section (5.72050) to turn down applications above the limit.

• Set up an inspection program to verify the condition of the taxicabs and certifications on the meters.

• Set up an application process within the city and what responsibilities other departments have.

• Establish a drug testing program and select a drug testing lab which is federally licensed.

• Use a highly visible license decal that police officers can identify is valid and for the City of Hermosa Beach.

• Establish a strong education and enforcement program right from the beginning.

• Establish liaisons with the taxicab companies and make regular contacts to keep up with problem areas.

Cost increases for full-service:

1. Personnel

• $10,209 Salary - Administrative Review Investigator

2. Equipment

• $5,000 Computer generated I.D. photographs - software, Polaroid ID-100 Camera system with supplies and film. * Can also be used for any city I.D. photo requirements.

• $1,000 Office supplies, forms, stickers.

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