Hailing Cabs

Taxi regulations fall in Denver and Indianapolis.


In Denver and Indianapolis, elected officials have torn down decades-old taxicab regulations that soak consumers and hinder entry-level entrepreneurs.

On May 31, Colorado Gov. Roy Romer signed a bill that ends Denver's 47-year-old taxi oligopoly. Since 1947, the Public Utilities Commission had turned down every applicant who tried to compete with Denver's three taxi companies. (See "America's Economic Refugees," November 1993.)

Under the previous law, the PUC could deny new taxi licenses if the existing companies could show that competitors would harm current taxi firms in any way. The new law forces existing taxi owners to demonstrate that competitors would drive the current companies out of business.

The changes in Indianapolis are even more radical. Extending Mayor Stephen Goldsmith's plans to reinvent the Indianapolis government (see "Competitive Instinct," August/September 1993), on May 23 the City Council removed most restrictions on taxi licensing.

The city lifted the cap on taxi licenses, allowing anyone who passes vehicle and driver-safety tests to get a license. Cabs can now cruise for passengers instead of waiting at designated stands or taking reservations by phone. Cab drivers may charge any fare they choose below a ceiling set by the city. And the city will allow jitneys or van pools to run along fixed routes.

A 1951 ordinance prevented the city from issuing more than 600 taxi licenses. But the city has rarely given out even as many licenses as the law allowed. Since 1987, for instance, only 392 cabs have been licensed.

The new ordinance doesn't completely eliminate regulations; a price ceiling remains. But opponents of the measure appeared ready to allege that new cab owners would gouge consumers, and the ceiling helped neutralize this opposition.

The airport authority, an independent agency, can also regulate fares and limit the number of taxis that provide airport service. Tom Rose, a special assistant to the mayor, says he hopes city officials can work with the airport authority to keep access open.

Disabled residents will benefit immediately from the new ordinance. Until now, wheelchair-bound residents have depended on public transportation. Yellow Cab owner Richard Hunt told the Indianapolis Business Journal he will purchase 10 wheelchair-accessible vans and operate them as a jitney or van-pool service.

Lifting the cap on licenses should provide opportunities for entry-level entrepreneurs, many of them African Americans. The Hoosier Minority Chamber of Commerce and the Indianapolis Recorder, a black newspaper, backed the ordinance. When Goldsmith introduced the proposal last spring, the Indianapolis Urban League signed up two dozen African Americans who plan to apply for licenses.