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June 18, 2012

Regulating Cabs Fair or Foul?

Richard B. Weldon Jr.

It probably seems like too much government, and it just might be. A recent flap has arisen between Blaine Young, the president of the Board of County Commissioners and the Board of Aldermen of the City of Frederick.


Oddly, this flap isn't technically a political conflict between the two governments. The email exchange between Mr. Young and Alderman Michael O'Connor was leaked to The Frederick News Post, most likely by a city official.


That assumption is based on the fact that the emails don't really paint Blaine in a positive light. The tone and syntax of the notes suggests that Blaine was angry when he wrote them, so it's safe to assume he wasn't the source.


One important point missed by the armchair pundits on anonymous posts on the News-Post website is the fact that the email came from Mr. Young's business email, not from his official county government address.


The whole flap concerns a recent city discussion about taxicab regulations, particularly the number of permits allowed, the fee charged for those same permits, and the fares allowed to be charged within the City of Frederick.


As a co-owner of Yellow Cab of Frederick, Mr. Young runs the most profitable private transport company in the area. He has a few competitors, but none of them can rival the fleet and services of Yellow Cab.


So, why does the government bother to regulate taxicabs? It's a legitimate question, in spite of the righteously indignant aldermanic reaction to Blaine's challenge.


The logic for regulation is that a vehicular service carrying the general public on public highways could be dangerous if the equipment did not meet basic safety standards. Further, too many taxicabs could clog cab stands and streets, potentially resulting in a degradation of the overall service. Maintaining tight limits on the total number of cabs means that government can constantly keep their fingers on just who the operators are.


Lastly, and the point that raises the most eyebrows, the use of permits means that the government can limit how many permits each carrier can hold.


Taking the regulation rationale individually, the state already has a vehicle safety inspection program. The problem is that the inspection only occurs at limited times in a vehicle's life. A taxicab, running constantly, probably needs to get an operational inspection more frequently.


The argument for cab permits based on the need to "thin the herd" is much trickier. If you buy the argument, then you have to believe that some independent operators are intending to slap a sticker on their personal vehicle and start trolling for passengers/customers.


They may be out there. The idea that there are so many of them that it will create a problem is a stretch, though.


In point of fact, taxicab regulations in the City of Frederick have been employed to manipulate the industry, almost since their creation.


Yellow Cab has always been the 800-pound cab gorilla, and for many years, their closest competitor, Bowie Transportation, worked just as hard to lobby the Taxicab Commission as Yellow Cab did.


Farebox control issues, limits on the number of cabs and proscribed vehicular conditions can, and have been, manipulated by both of these livery companies to their own advantage. The city’s Taxicab Commission has unwittingly played along, unaware that the taxicab regulations themselves are being manipulated by the private sector.


Lately, another player in the cab game, Frederick Cab Company, has taken the lobbying and advocacy process to new levels. Clearly intending to cut into Yellow Cab's dominance, Frederick Cab has testified in public meetings, emailed public officials and complained to the media that the playing field is unfairly tilted toward the dominant players.


On top of this, a state subsidy grant for bus service from Western Maryland to Baltimore was deftly manipulated to enhance the pockets of Bay Runner Shuttle while hurting the local cab companies.


Bay Runner Shuttle bid and won a grant to operate buses from Garrett County to Baltimore. The state was trying to create a financial incentive to get people from the western edge of the state to come to Charm City. The grant application spoke only of bus riders, and included stops in Cumberland, Hagerstown and Frederick on the way to Baltimore.


Once established, however, Bay Runner Shuttle shifted their model to be a direct competitor to any local cab company that offered cab or limo service to BWI Thurgood Marshall Airport, services which are offered by all three of the Frederick-area cab companies. Instead of buses, Bay Runner reverted to 15-passenger vans, like you see in van pools, or small buses to carry their subsidized riders to the airport or train station.


So, Mr. Young has a right to be a little peeved at the process. Local government regulates his own private sector business, albeit for seemingly good reasons. At the same time, state government relaxes regulations and offers financial incentives to a direct competitor.


Further, Mr. Young has every right to express that frustration as the co-owner of a business. The writers who criticize him as a politician ignore the fact that while it's true he holds public office, he also is employed and serves as an employer.


If he were making these claims and criticisms from his position as a member of the Board of County Commissioners, no doubt an ethics complaint could be lodged, and would probably have merit.


As long as the taxicab regulations primary goal is to ensure safe travel for the cab-riding public, then there is a role for government to play.


If the warring cab operators and owners continue to employ those rules to restrict competition and enhance their own purse, then we should re-think our strategy.


If government is going to subsidize one private sector transportation provider while leaving the others to suffer, then you can expect the other providers to complain, and they have a right to do so.


Yellow Cab
The Morning News Express with Bob Miller
The Covert Letter

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