Q&A: The Anchorage Assembly overhauled taxi rules. What now?

The Anchorage Assembly passed a sweeping overhaul of city taxi regulations this week aimed at dramatically increasing the number of cabs on the road.

It's a big change for an industry that up until now has jealously guarded limits on taxis. Until Tuesday, taxi permit owners had successfully fought off efforts to increase the number of permits available, fearing it diluted their own permit-investments.

But Assembly members said the change is needed to help encourage innovation.

Alaska Dispatch News talked to Eric Musser, the city official who enforces transportation regulations, for a rundown about the impact of the ordinance, such as taxi rates and ride-booking services like Uber.   

When will the new permits be issued?

City officials are still working on the timeline for making permits available, Musser said. But he said his office wants to issue the new permits as quickly as possible.

Permits will be issued by bid from the city purchasing office, Musser said.

In 2017, a total of 20 permits will be available — 15 new taxi permits and five wheelchair-accessible cab permits. In all, 116 new permits will be auctioned over five years.

The city will also try to find a nonprofit with a focus on serving people with disabilities to operate between five and 20 wheelchair-accessible taxis. The nonprofit would only pay one permit fee for what's called an "accessible fleet permit."

How much will the permits cost?

Bidding starts at $1,980. The permits will be nontransferable; until the Assembly's vote Tuesday, most existing permits could be sold and had high market value because of their scarcity.

Will there be more cabs on the street?

In theory, Musser said. But just issuing more permits does not necessarily ensure more cabs on the street, he added. People have to make the decision to invest in the permit and then have to actually operate the cab, he said.

Of the 188 taxi permits issued to date in Anchorage, only about 70 percent are currently in use, Musser said.

Will people pay more or less for a cab?

Musser said the ordinance should not affect the price of a cab ride. New permit holders will still be required to work with dispatch companies, and dispatch companies set rates, Musser said.

The city's Transportation Advisory Commission sets the maximum rate that can be charged.

I called for a cab and was on hold with a dispatch company for a long time. Does this ordinance deal with that?

No, Musser said. "We can't regulate customer service." But Musser said he expected to see other legislation from the Assembly aimed at addressing complaints about customers getting through to dispatch companies.

How will we know if this change actually improves service?

After five years, the ordinance directs the city transportation commission to conduct a "market reconciliation study." The study will determine whether there are too few or too many cabs on the road, and whether service got better or worse as a result of the change, Musser said.

The commission can halt further permits from being issued if the study finds, for example, there are too many cabs and service is declining, Musser said.

But if that doesn't happen, the ordinance directs the city to lift the cap on permits altogether. That would mean any qualified person can apply for a permit and pay the fee, creating an "open market" that's been adopted by other cities, like San Diego.

What about Uber and Lyft?

The ordinance does not create a way for ride-booking services like Uber and Lyft to operate in Anchorage. That will take a change in state law first. Assembly member Bill Evans, who sponsored the ordinance, has said the city should lobby for changes in state law in the upcoming legislative session.

Uber operated in Anchorage for six months in 2014 and 2015, but came under investigation by the state Department of Labor and Workforce Development for deeming its workers to be independent contractors instead of employees. Uber ultimately paid a $77,925 fine to the state over unpaid workers' compensation insurance.

As part of the settlement, the company said it wouldn't operate in Alaska unless state law was amended to exempt "technology network" drivers from such insurance requirements.

Uber could come back to Anchorage today, Musser said, "if they want to comply with our existing rules."

The ride-booking service could, however, work with nonprofits to provide service to people with disabilities, Musser added.

Devin Kelly

Devin Kelly was an ADN staff reporter.