By Cody Mello-Klein | [email protected]

Staff presented a proposed ordinance to City Council during its Tuesday legislative meeting that would reduce the scope of regulation around the city’s taxi companies.

Since the arrival of taxi network companies, TNCs, like Uber and Lyft in 2015, the taxi industry has been struggling to adapt to a rapidly changing market. The COVID-19 pandemic did not help the situation for an already challenged industry, and the city’s proposed code amendment aims to provide support for local taxi companies by easing specific regulations.

“Broadly speaking, that would reduce the overall scope of regulation, which would both lower the burden for both drivers and companies but also reduce the scope of what the city is asked to do, which, in turn, could help us administer those regulations more efficiently, both saving costs and charging lower fees back to the companies themselves,” Alex Block, a city planner in the Department of Transportation and Environmental Services’ mobility services division, said.

T&ES staff’s proposed changes are based on recommendations made in a 2019 report published by the city’s Office of Performance Analysis. The specific changes proposed by staff include shifting the responsibility of vehicle inspections and background checks from the city to local taxi companies.

Similar to ride-hail service providers like Uber and Lyft, under the proposed changes, local taxi companies would utilize third party services to conduct background checks on their drivers.

Staff also proposed easing requirements for cab companies to have specific “trade dress” for their vehicles, including vehicle color. Instead, staff would allow taxi companies to use insignias, logos and brands on their vehicles without requiring drivers to paint their vehicle a specific color.

One of the more divisive changes proposed by staff is the requirement that taxi companies carry a minimum of $100,000 in uninsured and underinsured motorist insurance on their vehicles.

“When we floated this proposal through the Traffic and Parking Board, the taxi companies were opposed to this, citing the extra cost,” Block said. “The approximate extra cost, according to the proponents, is about $20 a year per taxi with the additional requirements, in addition to the over all insurance burden that they are required to carry.”

Block noted that no other jurisdictions in Northern Virginia currently require this but many are exploring it. The state already requires that TNCs hold uninsured and underinsured motorist insurance.

Jeremy Flachs, a local personal injury attorney, supported the insurance amendment during the public discussion period of the meeting on Tuesday. Flachs said that he, alongside 24 other local attorneys, had signed a petition in support of the code change.

“What the city code has never addressed specifically is what happens if the cab is struck by another driver and the fault is not with the cab driver. That’s where you need either uninsured or underinsured coverage,” Flachs said.

“What we’ve got is a problem of people without any other insurance at the mercy of whatever the taxi cab driver purchases subject to having basically little to no compensation if they’re injured,” Flachs added.

Council uniformly supported the proposed changes, although some members of council had questions about other aspects of the city’s taxi code.

Vice Mayor Elizabeth Bennett-Parker asked staff why the city has a 40-cab minimum for companies to operate in the city.

“It seems like we’re allowing larger companies but not necessarily allowing smaller companies,” Bennett-Parker said.

According to Block, smaller companies have struggled in the city for years, in part due to the overhead cost of operating a taxi company, as have larger companies, which continue to shrink. The city most recently authorized 600 cabs, whereas in 2015, the city authorized 800 cabs, Block said. Meanwhile, vehicle inspections have dropped by 50% from 2019, as taxi drivers have ditched their cabs and started driving for Uber, Lyft and other TNCs.

“We’re open to allowing smaller companies as well, however, given the circumstances of the pandemic, we feel that’s highly unlikely at this time,” Block said.

Block pointed out that the original 40-cab minimum was established to encourage companies to provide dispatch service, a dated concept in today’s taxi industry.

Mayor Justin Wilson expressed a more general concern that the city’s proposed changes are “too modest.” Wilson pushed staff to consider more radical changes to the city’s taxi code, something staff said is currently under review.

“Everything is premised around the mental model that we have of a taxi based on a fair charge, based on time and distance,” Block said in regard to the current city code around taxis. “It’s a little tricky to try to unwind that. Though I think we are certainly open to looking at different models.”

According to T&ES Director Yon Lambert, the OPA report recommended that staff perform additional analysis and study of how the city’s taxi service could be reimagined, including the potential for taxi companies to set their own fares and fees.

“It has always been the plan to get through this first phase of this analysis and then take a deeper dive,” Lambert said.

Councilor Amy Jackson made a motion, which was seconded by Councilor John Chapman, to docket the proposed changes for the April 17 public hearing. The motion was adopted unanimously, 7-0.