Anchorage to add taxicabs, but bigger changes could be coming

casey.grove@adn.comApril 26, 2013 

Citing a need for more taxicabs on Anchorage's streets, the city's Transportation Commission voted this week to add permits for 15 new taxis, including five for handicap-access cabs.

The new permits amount to an increase of a little less than 9 percent and will nearly double the number of handicap-access taxis.

And while current permit holders opposed the move -- adding new permits only devalues the old ones, the thinking goes -- they say more sweeping changes included in a draft rewrite of city ordinances regulating Anchorage's taxi industry will have a much worse impact on permit holders, cab drivers and the people who rely on taxis for transportation.

"We've supported the issuance of additional permits in the past. But this time around we did not support it because we do not believe the factors that are supposed to be considered in issuing new permits have been met," said Jim Brennan, a lawyer and spokesman for the Anchorage Taxicab Permit Owners Association. "In fact, we think, generally, Anchorage has a good response time, better than most cities its size."

The Transportation Commission's decision to add permits at its Monday meeting was based on an eight-month Convenience and Necessity Study that looked at Anchorage's population, the perceived need for increased taxi service in Eagle River, and other factors, said municipal Transportation Inspector Eric Musser, who acts as the commission's recording secretary. The study did not find a significant shift in demographics to support a cab company based in Eagle River, which has been tried twice before and failed, Musser said. But what the study did show was a potential need for the entire Anchorage area, he said.

"It was determined that, yeah, we actually need more cabs in the community," Musser said.

That's not true, Brennan said. Sure, Anchorage's population has grown since the last time the commission added permits, but the demand for taxi service has stayed flat and complaints have been minimal, Brennan said. A solution to a specific problem -- such as not enough cabs when bars are closing, or a lack of service in Eagle River -- needs to be targeted to that problem, he said.

Existing permit holders accepted the commission's decision, albeit begrudgingly, Brennan said. What they do not accept are major changes proposed in an ordinance rewrite that would, as Brennan put it, "flood" the market with new permits and destroy the value of current permits.

The Title 11 rewrite by former Assembly member Debbie Ossiander, who stayed on the project after her term expired, includes many proposed changes for the local taxi industry. Specifically, it would add 10 new taxi permits each year for 10 years. After that, all permits for operating taxis in Anchorage would become nontransferable.

That means a permit worth $155,000, as one recently fetched in a sale, would eventually be worth nothing, Brennan said. If passed, the ordinance could result in the taxi permit owners filing a lawsuit against the city for something close to $20 million for that loss in value, he said.

Ossiander said her interest in making the changes lies with customers of taxicabs, not with the permit owners.

"The long-range goal is to open up the market. I really don't see that we're served by controlling those and limiting those," Ossiander said. "It seems to me, particularly because there is a demand in specific markets, the best way to address that is to allow more."

Opponents of Ossiander's plan have called the rewrite yet another move to "deregulate" the taxi industry. In 2008, Anchorage voters rejected a ballot initiative that would have made permits cheaper and easier to get, with roughly 65 percent voting against the proposal. At the time, the permit owners association said the so-called "open-entry" provision in the initiative would have resulted in poor service and higher fares.

That has not been the case in cities of comparable size to Anchorage that have opened up the market for taxi permits, Ossiander said. Plus, the rewrite, in its current form, includes added regulations on the quality of service, in an effort to protect the consumers using cabs, she said. There would also be better enforcement of the regulations, she said.

If the Assembly eventually approves the rewrite's provisions for adding permits, Ossiander said a lawsuit by the permit owners would not surprise her. In her research, Ossiander learned that similar moves in other cities withstood lawsuits, she said.

"I totally expect there to be litigation," Ossiander said.

The proposed ordinance has been referred to the Assembly's Public Safety Committee and is set to go before the Assembly at its May 21 meeting.


Reach Casey Grove at casey.grove@adn.com or 257-4589.

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