A Call for Competition
On a cold winter evening, Kathleen Morrison sat in her wheelchair in front of the Giant at Old Georgetown Road and Democracy Boulevard in Bethesda. Other shoppers got into their cars to return home. But Kathleen does not drive, so she waited for her Barwood cab to show up. Because she had no other option, she waited, and then waited some more. Ninety minutes later, the cab she had called finally arrived.
Helen Dunn, who is blind, must use taxi services for frequent medical appointments. She has learned to schedule her doctor appointments late in the day and order a cab hours in advance. What should be a 20-minute ride to her appointment often takes her most of the day to accomplish because she must build hours of waiting time into each trip.
The taxi industry in Montgomery County is broken. It does not work for Kathleen or Helen. It consistently fails the executive attempting to attend an important meeting, the family with a car at the mechanic and thousands of others in our county.
The taxi system in Montgomery County reminds us once more of why monopolies do not work. Lacking competition, Barwood feels no pressure to serve this community. With 74 percent of the market, it has become a classic monopolistic competitor. It provides poor service and pays no price for it.
The argument is simple: Competition provides better service.
Action in Montgomery (AIM), an organization of 28 congregations working to improve the quality of life for all Montgomery County residents, wants one result: decent and timely transportation.
The county has a history of trying to address the needs of elderly and disabled citizens who depend on taxi service to maintain their independence. Currently, the county offers Call 'N Ride taxi vouchers at a reduced cost to citizens in need. The $2.4 million investment is revenue that the taxi companies assume will come their way. This $2.4 million is important funding. It is spent so Kathleen, Helen and many others can get to critical medical appointments, the grocery store or the pharmacist. But too often they miss these appointments or wait hours instead of minutes.
We resent that consumers spend their limited personal funds and taxpayer money for trips that regularly fail to meet minimum standards of good-quality service. Because service by the companies is so poor, Call 'N Ride employees advise users to develop a relationship with a specific cabdriver instead of calling the cab companies directly. This taxpayer money should be spent on taxi companies that want a $2.4 million payment for services, not a grant.
AIM knows it will be attacked for demanding this change. The cab companies will claim they are already over-regulated. They will threaten to end service. They will blame drivers for poor service. Taxi companies will complain that these efforts will hurt the consumer. Yet, if there is no competition, what is the alternative to regulation?
With large government contracts and government subsidy must also come regulation and accountability. Free markets are great and powerful instruments for price control and high quality. But the cab market is not a free market. It is a monopoly, and government must step in and regulate it for the benefit of all Montgomery County citizens.
To address this problem the following reforms must be enacted:
* The taxi industry must meet performance standards. If a company fails to pick up a customer on time or to show up when called, its license should be revoked and redistributed to companies that are not afraid of being accountable to their customers.
* The county must increase the number of taxicab licenses, and companies with acceptable customer service records and new companies should be allowed to compete for these licenses.
Most of us think nothing of a quick trip to the grocery store or a 20-minute drive to our doctor's office. We don't think twice about how we'll get home. Is it too much to ask that for $2.4 million those who are willing to pay for a taxi ride might also have this flexibility?
The Rev. Richard Kukowski is rector of the Episcopal Church of the Transfiguration in Silver Spring.
An Already-Challenged Industry
Good customer service is not just the goal of our business, it is our business. Last year, more than 1.6 million passengers were successfully transported in taxis in Montgomery County. Fewer than 100 complained to the county that their service was less than they expected. That's a success rate of better than 99.99 percent -- a rate that would make other service industries such as airlines, restaurants and auto dealers envious.
Even the county's taxpayer-subsidized Ride On bus system had over 2,200 complaints last year -- more than for taxicabs in any way that complaints can be measured. We are not ignoring areas where the taxi industry can improve service, in particular on short trips for our seniors and people with disabilities. We work hard every day to meet the needs of all of our customers.
The county's taxicab industry was the first in the nation to introduce wheelchair-accessible taxicab service -- well before the county code required it -- and it remains one of the few in the nation that provide it. We now have an industry-supported hotline for citizens to call with any complaints about service. We have supported other reforms, such as industry-set performance goals.
The past decade for the taxi industry in Montgomery County has been difficult. When the industry needed to grow in the early 1990s to compete with the sudden growth of unregulated for-hire services such as sedans, limousines and shuttle vans, the county repeatedly said no. As a result, the taxi industry lost most of its more profitable business to those unregulated services and with it, many veteran drivers -- the most important element to good customer service.
Additionally, low unemployment and a failure of driver earnings to keep pace with those of other workers in the region have meant that finding and keeping good drivers is the single greatest challenge for taxi companies. Worsening traffic congestion and increased regulation have added to the challenge.
The county executive's proposed taxi legislation promises to make matters worse. It ignores the recommendations of the executive's own Taxicab Services Advisory Committee and the consultant hired by the county three years ago and proposes to double the number of taxis without a corresponding increase in ridership.
In almost every jurisdiction that has tried to "put a taxi on every corner" by significantly increasing the number of taxis over a short period, driver earnings have fallen, service quality has declined and the burdens of enforcement have multiplied.
Taxi drivers and companies, and the service they provide, would be severely hurt by another key proposal: to make licenses nontransferable. This would eliminate substantial investment by companies and drivers in their businesses and would be a major disincentive to any new investment. Forget getting financing.
The heads of both the Maryland and national taxi associations have noted that if one wants to see what an industry is like without reasonable limits on the number of licenses and without the licenses having value, just look next door to the District of Columbia. In the District, taxi fleets are under-capitalized, poorly managed, unresponsive and decades behind other jurisdictions in technology and quality of equipment.
Besides devaluing businesses, this legislation contains other ill-conceived proposals: favoring outside taxi companies over existing smaller ones; vague and unreasonable performance criteria; expensive annual audits costing $70,000 each; added burdens and increased penalties on drivers, denying them due process; and micromanagement by government bureaucrats.
Montgomery County likes to be first: the "first" to regulate this, the "first" to reform that. Unfortunately, in response to a newspaper story and a vocal special interest group, it may be the "first" to destroy its own taxi industry.
Overall, this legislation is punitive, mean-spirited and overbearing. It is unworthy of this county. Instead of increasing competitiveness, it would lessen it. Instead of improving service, it would worsen it.
We believe that meaningful and effective reform resulting in better service can happen, but only if Montgomery County is willing to work in partnership with the taxi industry, not against it. That's the real way to provide good customer service.
Retha Arens is executive vice president of the Coalition for a Competitive Taxi Industry, which includes Action Taxi, All-County Cab, Barwood Cab and Regency Cab.
Montgomery County officials are reviewing proposals to tighten the county's taxicab regulations, a move that some argue will result in improved service. The church-based group Action in Montgomery is leading the charge for change, while local taxicab owners are fighting the plan as one that will severely cripple their industry. Representatives of both groups write about their views on the proposals.