City Council Puts Brakes on Looser Taxi Regulations

City Council’s Public Safety Committee kicked two proposals regarding taxi and limousine services back to City staff Tuesday during a two-hour meeting that had Council members questioning the basic structure of how San Antonio regulates vehicles for hire.

Both proposals represent ongoing attempts to solve the decline in taxi and black car service use in San Antonio since ride-hailing companies such as Lyft and Uber, known officially as transportation network companies (TNCs), first came to San Antonio in 2014.

The first would have removed the cap on taxi permits and allowed an unlimited number of taxi drivers to operate independently of companies and co-ops. Four other major cities, including Houston and Dallas, have done so. Another would have loosened requirements for limousine/black car service companies. Both were initiated by about 200 drivers in the industry who say the playing field won’t be level without these “barriers to entry,” San Antonio Police Department Assistant Director Steve Baum told the committee. “We’re looking for direction from y’all.”

Council members and those who work in the industry disagree on how these changes would impact companies and drivers. Most company owners and presidents are against the proposals while some drivers support the ideas – several of whom spoke their minds on Tuesday. More research needs to be done, the five-member committee agreed. It will, therefore, revisit the issue once City staff comes up with a more comprehensive presentation.

That research will include why the vehicle for hire ordinance, Chapter 33 of the City Code, falls to SAPD and the Public Safety Committee in the first place.

While this is an important discussion to have, there are “kids killing kids” out there, Councilman William “Cruz” Shaw (D2) said, “and we’re meddling [with] … taxi permits.”

Shaw, who chairs the Public Safety Committee, suggested that the issue be discussed by the Transportation Committee in the future.

The real “target” should be the TNCs, Councilman Greg Brockhouse (D6) noted, but the State Legislature passed a law in May prohibiting cities from regulating ride-hailing companies. Language regarding TNCs will likely be removed from the City ordinance, since State law overrides it.

“I don’t understand why you’re not working together,” Brockhouse told the industry representatives and drivers in the room, saying their response “should have been unity.”

Regardless, he continued, none of the evidence presented Tuesday is enough to change policy. “I’m not inclined to support any changes until I can see a justifiable mechanism that protects the public.”

The cities that removed permit caps all experienced periods of “chaos,” Baum said, with a months-long rush of applications that eventually levels out within about two years. Once the rush subsided, those cities with comparable data – San Diego and Houston – increased total permits by 11%, and administration of permits since has been “fairly easy.”

“I don’t want to see chaos during our Tricentennial year [in 2018],” Councilman John Courage (D9) said, suggesting that an amendment could be made in place of a complete ordinance overhaul.

The City has a total of 1,100 active drivers and 886 permits – one per 1,700 residents – according to a somewhat mysterious algorithm, Baum said. It’s been around for so long, he’s not sure where it came from or what it is based on.

Many taxi companies purchase permits to maintain dominance in the market, he said, but they don’t use those permits.

By opening up the market to unlimited drivers – as Uber and Lyft, in a sense, already have – taxi industry representatives say current drivers will loose their livelihoods.

“It dilutes the opportunities for each of the taxi cab operators to make a living wage,” said Bruce Mery, an attorney representing the taxi industry.

There are only so many rides that San Antonians and visitors need, and ride-hailing has encroached on the market, he said. Several drivers spoke against the changes.

“It’s certainly understandable that they would be opposed to [changes],” Baum said after the meeting. “Go talk to Blockbuster when Red Box came out. Go talk to Red Box when Netflix came out. … I think that’s just any industry.”

Hector Garcia, a longtime local taxi driver, said taxi companies and co-ops essentially have a monopoly of  permits and charge drivers too much for leasing vehicles. Workers start off “in the hole” at the beginning of each day to pay off the daily lease of the car.

“This is not going to [have] an effect on the drivers, it’s going to affect the companies,” said Garcia, who spoke on behalf of a large group of drivers who attended the meeting to show support of change.

Ride-hailing shook the industry and companies are not adapting, Garcia said. “We do not want those companies to drag those taxi drivers alongside with them.”

But taking on a permit as a single owner/operator will force drivers to take on the responsibility and debt that taxi companies do, Brockhouse said.

“Talk about starting off in the negative … welcome to being a small business owner,” he said.

The City would need to offer a significant amount of training, Baum said, in order to make sure new drivers know the regulations that include insurance responsibilities, receipt-tracking, car maintenance, and more.

It’s not the first or last time that a new Council has a new take on Chapter 33 of the City Code. The previous Council made sweeping changes to the vehicles for hire ordinance in December 2016, removing several onerous requirements and restrictions. At the same time, it approved operating agreements with ride-hailing companies.

The conversation that took place on Tuesday, Brockhouse noted, was initiated by the previous Council. All five Public Safety Committee members – Shaw, Brockhouse, Courage, Councilwoman Ana Sandoval (D7), and Councilman Clayton Perry (D10) – are new to the Council this year.