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Blake: When a bureaucracy determines "public need"

Yellow Cab, spearheading the opposition to the latest taxi deregulation bill in the Colorado legislature, seems to be complaining that the bill doesn’t go far enough.

And it’s right! An ideal bill would be more radical. But it’s an improvement over the current situation, and at the legislature you take what you can get. You don’t spurn the good just because you can’t get the perfect.

House Bill 1316 would eliminate the power of the Public Utilities Commission to consider whether there is a “public need” for a new taxi company. All the PUC could legally do is determine whether an applicant is operationally and financially fit. If it is, the PUC must grant it an operating certificate.

It was approved in the House last week by an easy 58-5 vote and now awaits action in a Senate committee.

File photo - Todd Shepherd
File photo – Todd Shepherd

Yellow Cab, in a “talking points” memo distributed to lawmakers, alleges that the bill “does absolutely nothing to deregulate the taxicab industry.” All it does, is remove “the PUC’s ability to consider ‘public interest’ when considering new taxicab applications.”

True enough. The PUC, for instance, would still have the power to determine how many cabs each company is allowed to operate in the Denver metro area — and it shouldn’t. Each company’s supply should fluctuate according to the demand for its service. Government shouldn’t be picking winners and losers.

Yellow Cab complains not so much about other cab companies as it does about the so-called “transportation network companies” — Lyft, Uber and others who offer smartphone apps to connect passengers with drivers operating their own cars.

Yellow gripes, among other things, that H.B. 1316:

— Doesn’t allow the complete pricing freedom that TNCs enjoy;

— Doesn’t subject TNCs to the same level of safety checks and vehicle inspections as taxis;

— Doesn’t permit the taxi companies to run as many vehicles as the TNCs can, and apparently do. (Testimony indicated that there may be 2,000 TNC vehicles compared to 1,400 cabs in metro Denver.)

— Doesn’t apply the same insurance requirements to TNCs and taxis. (Actually, TNCs have to offer more insurance now than taxis do.)

It might be fun to call Yellow’s bluff and offer amendments that further deregulate the business. Would Yellow support such moves? Probably not; it is still trying to get the PUCs final approval of its planned merger with Metro Taxi. The combined company would have about 60 percent of the cabs in the area. Operations that size don’t like deregulation and more competition.



Liberating the vehicle-for-hire business from government control has been a long, arduous process in Colorado. Until 1994 it was considered a “regulated monopoly,” and only three firms were allowed to operate. From 1994 to 2008 “regulated competition” was the standard; applicants still had to prove to the PUC, in advance, that there was a “need” for their business. Existing companies were allowed, even encouraged, to testify that there wasn’t.

Finally, in 2008, the burden of proof was reversed. The applicant was given a “rebuttable presumption” there was a need for its business and it was up to the existing companies to prove there wasn’t. That was an improvement but applications still took years; the PUC still seemed to be in bed with the companies it was supposed to regulate.

There were rumors floating around that H.B. 1316 was offered to allow the Communications Workers of America a chance to set up another taxi co-op. It already helped set up Union Taxi. That caused some concern among Republicans. But the measure was amended to make sure that the PUC can’t consider an applicant’s corporate structure when determining whether to approve a certificate.


RELATED OP-ED: HB 1316 brings competition and opportunity to Colorado’s taxi industry


By the way, Republicans should be happy when unions organize their own co-ops. It makes them more entrepreneurial. Attorney Ray Gifford, a former PUC chairman and strong advocate of more competition in ground transportation, helped the CWA win a certificate for Union Taxi.

Another hero of the deregulation movement is Abdi Buni, who helped organize Union Taxi and now operates ABC Shuttle. A few years ago he testified on behalf of Mile High Cab, when it was seeking a certificate. “If Union Taxi dies from competition, so be it,” he said at the time. “If we cannot compete, we deserve to die.”

Buni is a man who not only understands free enterprise, he practices it. He testified last week for H.B. 1316, noting that Freedom Cabs, Union and Mile High all had to go to the Colorado Supreme Court to get their certificates. It took them up to seven years and cost them unnecessarily high legal fees.

H.B. 1316 isn’t perfect but it’s another step in the right direction.

Longtime Rocky Mountain News political columnist Peter Blake now writes twice a month for CompleteColorado.com. Contact him at pblake0705@comcast.net You may re-publish his work at no charge and without further permission; please give full credit to Peter Blake and www.CompleteColorado.com.

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