A Future for Taxis
June 30, 2015
On July 21st, the County Council is scheduled to consider a package of groundbreaking reforms to Montgomery County’s taxi regulations.
I truly value Transportation Network Companies (TNC’s) such as Uber and Lyft, but I am compelled to find ways to help taxis compete with TNC’s because taxis are governed by public service mandates such as universal coverage and service to vulnerable populations.
In order to compete, taxis must provide consumers with the features and convenience of a TNC, coupled with the regulated reliability of a taxi. To meet these goals I introduced a bill [pdf] which would have our Department of Transportation develop a centralized, universal dispatch app for all taxis. Councilmembers Berliner and Floreen also introduced bills that changed different aspects of our taxi regulations.
As the Council’s Transportation and Environment (T&E) Committee, led by Committee Chair Roger Berliner, began a review of these three bills, the Council also heard from the Montgomery County Professional Taxi Drivers Union (MCPTU). MCPTU proposed a package of reforms they dubbed the “Taxi Driver’s Bill of Rights.”
As I began to closely examine the taxi industry in Montgomery County and talk to drivers from different companies and different circumstances, I was disturbed to learn that many drivers have to work 12 to 16 hours a day just to break even on the rents they pay on their vehicles. Because taxi drivers are employed as independent contractors, they cannot form a union or bargain collectively, and the companies have no responsibility to provide even basic benefits workers comp or ensure drivers make minimum wage. I always figured that driving a cab was hard work, but I came to learn that the drivers, many of whom are recent immigrants, are often making less than minimum wage and have almost no voice in their working conditions. I have talked with drivers in other jurisdictions who refer to some of our Montgomery County-based drivers as operating under “wage slavery” conditions.
So in February, I sent a letter [pdf] and draft language [pdf] to the T&E Committee proposing a package of legislative changes that would remake Montgomery’s taxi industry to be a better deal for drivers — and thereby hope to preserve the industry, which is rapidly losing drivers to the TNC’s.
Then in April, the Maryland General Assembly passed legislation that creates a framework for TNCs to operate in Maryland and preempts local governments from regulating them, removing that issue from our consideration.
Chair Berliner, also clearly moved by the dis-empowered state of taxi drivers, embraced the need to create a fairer environment for the County’s taxi drivers. After several worksessions, the Committee, with Chair Berliner and Councilmember Hucker in support, recommended amended versions of many of my proposals, along with text to create a universal dispatch in the County, in a new omnibus bill.
Following are several key elements of the bill:
Universal Digital Dispatch for Taxis
As taxi companies, drivers, and regulators take a fresh look at taxi regulation in light of Uber and Lyft, one emerging theme is improving taxi service by importing the features that made the new entrants so successful – smartphone apps, GPS tracking, seamless payment, consumer-friendly rating systems, and even dynamic pricing. Taxi fleets are developing or buying branded apps and upgrading their dispatch systems. In Boston, taxi companies are banding together offer a new app. A number of app startups have attempted to create “Uber for Taxis.” These include mytaxi, Curb (formerly TaxiMagic), HailO (no longer operating in the US), Easy Taxi, Flywheel, and Zoro (Canada). “Aggregation” apps have also started to appear, which provide access to a number of taxi services. ek is one recent example.
But even with great design and features, the success of any transportation service is dependent on how quickly, cheaply, and reliably a customer can get to their destination. For car services like Uber or taxis, speed is dependent on the number of cars on the road. The more cars available, the sooner a car is able to pick up a customer, on average. The challenge facing taxis is that when apps are fragmented by fleets, the customer will not get the same level of service as the fleets could provide if they were all combined on one app. To address this fragmentation, governments have begun to pursue “universal” taxi apps that would make all taxis in a jurisdiction available on one app. Chicago, Washington DC, New York City, and Los Angeles are all pursuing, in different ways, the development of a government-sanctioned universal taxi app which all taxi drivers in the jurisdiction would be required to use. This was the original idea that I proposed in my bill in October 2014, modeled after Chicago’s law.
But as I talked with stakeholders and explored this concept, I found that having the government develop one universal app was an unsatisfactory solution. It would solve the fragmentation problem within Montgomery County, but could still require a customer to download a new app each time he or she crosses a jurisdictional boundary. Especially in a region like DC, something like Uber provides a much more seamless experience.
The best result would be the development of a universal taxi protocol – a uniform specification that would allow taxi apps to share driver, passenger and fare information with each other. This could function similarly to the open source General Transit Feed Specification (GTFS) and GTFS-realtime, developed by Google, which now helps many different apps, websites, and services provide information on trains and buses from hundreds of jurisdictions.
If all taxi apps could talk to each other, no matter which app a driver or customer uses, all passengers would have access to all taxis within each jurisdiction, and all drivers could receive requests from all passengers within the jurisdiction. Government bodies, rather than developing and running their own apps, would be in the more comfortable regulatory role of approving apps and requiring that all drivers use an app that makes its data available.
So I developed an alternative proposal (see pages 10-12 and 599-600 of the linked memo), which the T&E Committee accepted. The new language allows MCDOT to approve universal apps on the condition that they provide an Application Programming Interface (API) that allows other approved apps to see and dispatch the drivers using each app. All drivers would be required to use an approved app. If other jurisdictions adopt similar legislation, a standard protocol could emerge and be adopted for national, or even global, use.
Fairness for Drivers
Among other things, I am very pleased that the Committee’s bill:
- requires DOT to create uniform model leases and affiliation agreements that cap the rents and other charges that companies can use to get payments from drivers
- caps the credit card charge and allows drivers to choose their own credit card processing provider
- requires that companies use a dispute resolution process culminating in binding arbitration when taking any adverse action against a driver
Reduced Operational Expenses
Councilmember Floreen’s legislation allows fleets to operate older vehicles, which is cheaper for the fleets; reduces requirements for markings; and potentially reduces insurance coverage and expenses, depending on action by the Maryland Public Service Commission (the state law requires the PSC to rule on insurance issues for TNC’s). These changes make the industry more cost competitive with TNC’s.
A Driver Co-Op
As the conversation has evolved, many drivers have expressed a desire to form a cooperative – a driver-owned taxi company. They feel that, with a sufficient number of drivers participating and universal digital dispatch, a non-profit co-op could provide competitive service at lower cost. I am excited about this idea and I have been working closely with the drivers to help connect them with available resources and to ensure that our laws support this vision.
With this goal in mind, I proposed issuing 200 new Professional Vehicle Licenses or PVL’s to individual drivers. The Committee has recommended issuing 50 new PVL’s for individual drivers in the first year followed by 50 more the second year, split between drivers and fleets (potentially including a co-op). I feel strongly that we need to allow enough new taxis to form a viable co-op in Montgomery County, and certainly if the co-op works then it will attract more drivers over time from other fleets and even from TNCs.
A Representative Commission
The T&E recommendation also includes the creation of a new Taxicab Services Commission, which would have representatives of companies, drivers, and the public, and would provide the Executive and Council with advice on setting the lease rates and other charges, and generally review the taxi industry and recommend regulatory changes every two years. Given that it has been about ten years since we last reviewed the taxi code, we will benefit from having the commission recommend changes more regularly as the industry changes rapidly around us.
Ensuring a Voice for Drivers
One crucial aspect of my proposal, for which I will seek support at full council, is the development of a system to allow drivers to voluntarily pay dues to an association or fund. Because drivers are independent contractors rather than employees they cannot collectively bargain or have mandatory dues collection for a union. Their history of exploitation, however, demonstrates that taxi drivers need a voice in their working conditions. I think that our own deliberations demonstrate that drivers are much more powerful when they have the ability to participate in the process as a collective entity, and a digital dispatch app provides a reasonable tool to accomplish that goal, using the integrated payment system.
A mechanism to pay dues could allow drivers to have ongoing representation and protection from abuse by taxi companies, pool resources to help with dispute resolution, possibly create a common benefit fund to finance retirement, life insurance and disability benefits, and enjoy a host of other benefits that are usually associated with a union.
I hope that the full County Council will agree with me that taxi drivers deserve these benefits too. Providing a mechanism for voluntary contributions would enable drivers to be more successful with their efforts.