TO:
Honorable Mayor Powell and Members of the City Council
THROUGH:
Mark Danaj, City Manager
FROM:
Bruce Moe, Finance Director
Steve S. Charelian, Revenue Services Manager
SUBJECT:Title
Award of Five-Year Taxicab Franchises to All Yellow Taxi, Inc., Bell Cab Company, Inc., United Independent Taxi Drivers, Inc. and Yellow Cab of South Bay Cooperative, Inc. Effective January 1, 2015 (First Year Revenue of $152,295) (Finance Director Moe).
APPROVE
Lin
RECOMMENDATION:
Staff recommends that City Council award five-year Taxicab franchises to: All Yellow Taxi, Inc. (30 Cabs); Bell Cab Company, Inc. (30 Cabs); Yellow Cab of South Bay Cooperative, Inc. (which includes Manhattan Yellow) (65 Cabs); and United Independent Taxi Drivers, Inc. (40 Cabs).
FISCAL IMPLICATION:
Collectively, the four franchises will generate revenue of $152,295 ($923.00/cab) in the first year. Subsequent years will be adjusted by the Consumer Price Index for September, or $25.00, (whichever is greater).
BACKGROUND:
In 1999, the City implemented a franchise system limiting the number of taxicabs operating in Manhattan Beach. The implementation was in response to concern for public safety and welfare due to an excessive number of taxi cabs trolling the streets in search of fares. In addition to placing limits on the number of taxi cabs, the franchise system enabled the City to better control the manner and condition under which taxi service is provided to the residents, as well as provides additional revenue.
The franchise system allows the City to establish certain standards, previously unattainable without contractual obligation, including age and minimum fuel economy of authorized vehicles, trip routing, driver background checks, training standards, identification placards, discounted rates for seniors, minimum insurance, and ADA requirements. The franchise agreements allow only authorized companies with a limited number of vehicles to pick-up fares within the City limits. Non franchised cabs may only drop off fares initiated outside of the City; they cannot pick-up fares within Manhattan Beach.
In 2005, and again in 2008 the City solicited proposals through a Request for Proposal (RFP) process. Ultimately, City Council awarded taxicab franchises to: All Yellow Taxi, Bell Cab, United Independent Taxi and Yellow Cab of South Bay Cooperative. These companies represent the only proposers and franchises granted during both the 2005 and 2008 RFP processes. Results from a survey of surrounding cities found the City's current franchisees are also franchised in the neighboring cities of Hermosa Beach, Redondo Beach, and Torrance. As a result, on September 2, 2014, City Council authorized the direct negotiation of agreements between these franchisees without a formal RFP process, which is permissible under the City's Municipal Code and other relevant laws.
DISCUSSION:
Staff conducted direct, separate negotiations with all four incumbent franchisees. Through those meetings, a new baseline fee ($923 per cab) was established for the new franchise period. Further, those meetings yielded the new clean air vehicle mileage standard adopted by the City Council earlier this year. It also provided a forum to discuss and reinforce the new taxicab parking restrictions and penalties for repeated violation of the Ordinance.
As a result of those negotiations, staff recommends that the City Council award five year franchise agreements to the four incumbent companies. All four companies have served the community well for the past twelve years. Continuing with these four franchisees benefits both businesses and residents who are familiar with and accustomed to the companies which have operated exclusively in the community.
Under the new agreements, which will be in effect from January 1, 2015 through December 31, 2019, the number of authorized cabs per company remains consistent with the prior franchise period.
All Yellow Taxi - 30 cabs
Bell Cab Company - 30 cabs
United Independent Taxi Drivers - 40 cabs
Yellow Cab of South Bay Cooperative - 65 cabs
As provided for in the Vehicle for Hire Ordinance, the City has determined that 165 taxi cabs are appropriate and will ensure adequate service to residents and patrons.
During this past franchise period, taxicabs parking at metered parking spaces while waiting for fares became an issue. This practice caused problems because the spaces would not then be available for business patrons. As a result, the City Council adopted Ordinance 14-0005 which established taxi stands. While these taxicab parking restrictions are set forth in the Municipal Code, in an effort to further emphasize the restrictions, Section 3.1(a) of the new franchise agreements requires that the franchisees abide by all laws, and specifically calls out the taxicab stand requirements.
Further, on December 2, 2014, City Council approved Municipal Code changes (Chapter 4.108) which codify the process by which a franchise may be suspended or revoked, and further defines various vehicle types which may or may not operate within the City. According to MBMC 4.108.090, any of the following occurrences may initiate franchise termination, revocation and or suspension: one or more vehicles not displaying the proper City identification permit; three or more complaints regarding the franchisee's operation in a three month period; three or more violations of the Municipal Code within a three-month period (this includes taxi cabs parking unlawfully in metered parking spaces as well as no smoking in public places); taxi cab vehicles not adequately maintained; violation of the rate provisions; and franchisee violations of any provision in the agreement or code which endangers public health and safety.
The Vehicle for Hire Ordinance does not cover other transportation companies such as Uber and Lyft (referred to as Charter- Party Carriers in the franchise agreements). These carriers are considered technology companies that have developed software that allows users to request rides via mobile or computer applications. The City does not currently have the legal authority to control such enterprises, but will continue to monitor relevant laws.
CONCLUSION:
Staff recommends that City Council award five-year Taxicab franchises to: All Yellow Taxi, Inc. (30 Cabs); Bell Cab Company, Inc. (30 Cabs); Yellow Cab of South Bay Cooperative, Inc. (which includes Manhattan Yellow) (65 Cabs); and United Independent Taxi Drivers, Inc. (40 Cabs).
Attachments (Franchise Agreements):
1. Yellow Cab of South Bay
2. All Yellow
3. Bell Cab
4. United Independent