Internet Explorer 11 is not supported

For optimal browsing, we recommend Chrome, Firefox or Safari browsers.

City Taxi Systems Struggle with Change

Calls for reforming city taxi services are getting louder just as new technologies are making it easier to get a ride.

Ghaleb Ibrahim just wanted to own and drive his own taxi cab. He had the means to operate a safe and insured car, but a law passed by Milwaukee in 1991 capped the number of taxis allowed on the streets to just 321, or 1 for every 1,850 residents. (It is one of the worst ratios in the country; Washington, D.C., for example, has 1 cab for every 90 residents.) Ibrahim had two choices: He could try to purchase a permit, which would cost him nearly $150,000, or he could rent a cab for a hefty monthly fee. Instead, Ibrahim decided to sue the city, calling the cap an impediment to his right to earn a living.

In May, Judge Jane Carroll of the Milwaukee County Circuit Court issued an injunction preventing Milwaukee officials from denying taxicab permits to qualified drivers. Arif Panju, an attorney with the Institute for Justice (IJ), which helped Ibrahim and other cab drivers with their legal challenge, said cities like Milwaukee have long protected cab company monopolies at the expense of entrepreneurs. One firm, for instance, owns half the cabs in Milwaukee. "These regulations," says Panju, "hold back competition."

Milwaukee is not unique: A number of major cities recently have seen their taxi services roiled by charges of monopolistic practices. In Atlanta, 300 cabbies have filed a federal lawsuit against the city, claiming that companies have “fiefdom-like control” of the cab permitting system. An ordinance passed in 1995 caps the number of taxi permits issued at 1,600. As a result, cabbies have to pay a sizeable weekly fee to lease a permit. Similar demands for reforming outdated taxi permitting and medallion systems have hit Boston, New York, New Orleans and San Francisco.

Meanwhile, mobile technology has allowed new firms with names like Uber, Lyft and Sidecar, to leapfrog over the traditional taxi system and let anyone with a smartphone app schedule a ride with drivers who have spare room and want to make some extra money. These ride-sharing services have sparked protests in Los Angeles and led other cities to crack down on them, claiming the vehicles are unlicensed and illegally operating a "for hire" service. New York has set up sting operations to stop people from using them. In Austin, Texas, the city council has recommended that ride-sharing services using mobile technologies be "required to work within the current City Code." Seattle is evaluating the services, while local cab companies ask for "protection" from what would be more competition.

Want more urban news and commentary? Click here.

At the same time, after decades of decline, cities like Boston, San Francisco and Washington, D.C., are seeing their populations grow again. Residents of these cities want more taxi service. Yet, with the exception of D.C., the number of cabs in many of these cities has been capped at a rate that was set years ago. Cities regulate cabs to ensure vehicles are safe and drivers are experienced, but of late these regulations have created obstacles for those who want to enter the business, allowing control of the cab business to stay in the hands of a few big companies who have little interest in more competition.

These ride-sharing services are beginning to disrupt the old business model that has kept many independent cab drivers from working. And so far, cities have resisted the new services. That's probably not a wise decision. "Cities need to embrace the technology," says IJ's Panju. "It will create jobs and opportunities. Cities have to stop practices that protect a few large monopolies."

Just as technology has changed how we get our news, listen to music, read books and watch TV and movies, it will change how we hail a cab. Cab companies may not like what's happening, but it may be better to embrace change rather than resist it.

Tod is the editor of Governing . Previously, he was the senior editor at Government Technology and the editor of Public CIO, e.Republic’s award-winning publication for IT executives in the public sector, and is the author of several books on information management.
Special Projects
Sponsored Stories
Sponsored
In recent years, local governments have been forced to adapt to a wildly changing world, especially as it pertains to sending bills and collecting payments.
Sponsored
Workplace safety is in the spotlight as government leaders adapt to a prolonged pandemic.
Sponsored
While government employees, students and the general public had to wait in line for hours in the beginning of the pandemic, at-home test kits make it easy to diagnose for the novel coronavirus in less than 30 minutes.
Sponsored
Governments around the nation are working to design the best vaccine policies that keep both their employees and their residents safe. Although the latest data shows a variety of polarizing perspectives, there are clear emerging best practices that leading governments are following to put trust first: creating policies that are flexible and provide a range of options, and being in tune with the needs and sentiments of their employees so that they are able to be dynamic and accommodate the rapidly changing situation.
Sponsored
Service delivery and the individual experience within health and human services (HHS) is often very siloed and fragmented.
Sponsored
In this episode, Marianne Steger explains why health care for Pre-Medicare retirees and active employees just got easier.
Sponsored
Government organizations around the world are experiencing the consequences of plagiarism firsthand. A simple mistake can lead to loss of reputation, loss of trust and even lawsuits. It’s important to avoid plagiarism at all costs, and government organizations are held to a particularly high standard. Fortunately, technological solutions such as iThenticate allow government organizations to avoid instances of text plagiarism in an efficient manner.
Sponsored
Creating meaningful citizen experiences in a post-COVID world requires embracing digital initiatives like secure and ethical data sharing, artificial intelligence and more.
Sponsored
GHD identified four themes critical for municipalities to address to reach net-zero by 2050. Will you be ready?