Changes Needed For The Taxi Board

Thursday, March 20, 2014

The Chattanooga Taxi Board in its current form needs to be changed, if not done away with altogether. The current headline involving the councilmen and a current operator are yet another example of the problem.  

The way the current system works is a person has to have what is called a "privilege" to operate.  A company has to be granted a certain number of privileges in order to operate under  a "Stand" (or company).  The only way to get the number of privileges you need is to go before the board. The board is heavily influenced by the biggest operators in the city who in turn make their recommendations as to the applicant’s rejection or approval. Historically, most applications that have been submitted have also been denied.  While single privileges are sometimes granted, application for enough privileges to operate as a new company have typically also been denied. 

To make matters worse, one needs to know what happens when the board grants a single privilege.  A person who is granted a single privilege has to operate under an established “Stand.”  The large stand owners charge fees for operating under their name.  Thus the large owners are able to protect their market both by controlling (limiting) the number of “Stand” applications and by also by getting fees from the few single privilege operators. This seemingly creates a huge conflict of interest and I can’t help but wonder if it is why the large owners are so protective of the board.

Apply it to another business. Lets say someone meets all the requirements for a license to open a restaurant in our city. After meeting the requirements, a restaurant board - heavily controlled by the largest restaurant owners in the city - denies the licenses because they feel there are already too many restaurants. Making it worse, if one applied the single privilege concept to the food service industry, the large restaurants would only allow the small restaurants to operate with the large restaurants branding and only after the smaller guys paid the large restaurants a fee. If that happened, there would be outrage and law suits galore. This is what happens when anyone in Chattanooga attempts to gain privileges for a "Taxi Stand" in the city of Chattanooga.

The city has every right to come up with standards, fees inspections, whatever it needs to make sure the public is safely transported. What it should not do is be in the business of denying free market competition. It is my feeling that the current board unfairly protects those that are already in business. 

The big taxi stand operators will deny and deflect this criticism saying they are just protecting the customer. This is true but only to the extent that they are indeed protecting someone but not their intended target. Instead they are protecting - with the city's help  - the bottom line for a select group of companies by denying competition. 

James Blevins

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