Senate Leadership
June 19, 2008
Taxi Cab Industry Under the Microscope
Senate Majority Leader offers testiomy to legislative committee
Senate Majority Leader Martin Looney (D-New Haven) offered testimony today to the General Assembly's Program Review and Investigations Committee, which at his suggestion has begun a study of the taxicab industry in Connecticut.
Senator Looney called for an investigation after it was brought to his attention that the taxicab industry, particularly in New Haven, but statewide as well, is fraught with disturbing inequities. That includes the treatment of the drivers and the impact the lack of competition could have on rates.
Senator Looney's testimony reads, in part, "I was disturbed by the stories that the drivers told me regarding their working conditions. It appeared that the conditions vary greatly by region and some of these variations are not as one would expect. For example, the lease fee charged to drivers in New Haven is apparently significantly higher than that charged to drivers in Stamford. The situation in New Haven is such that it appears nearly impossible for a driver to earn a reasonable living working a regular work week."
Senator Looney requested the Program Review and Investigations Committee to undertake a study of the operations of the taxi industry that will include: The current taxicab industry regulatory scheme and equity issues therein, the standard for the issuance of taxicab certificates, the procedure for licensing taxicab operators, the level of competition or lack thereof in the taxicab industry, diversity in management of the industry in terms of race and gender, and the possible role of organized labor or a state ombudsman.
"This review of the taxicab industry will help determine if there are conditions which unfairly limit competition and prevent people from establishing independent competitors to Metro Taxi, the predominant taxicab service in New Haven," said Senator Looney. "I believe it is also important to examine the current operating conditions to ensure that the rates are reasonable and that there is an opportunity for reasonable competition in this regulated business which has a significant impact on public access to transportation."
Senator Looney's entire testimony is printed below:
June 19, 2008
Good afternoon Senator Meyer, Representative Wasserman and members of the Program Review and Investigations Committee. Earlier this year, an article in the New Haven Advocate brought to my attention alleged inequities in the taxicab industry, particularly in New Haven. After researching the issue, I decided that a sensible first step ought to be an in depth study to reveal all the facts relating to this situation. I met with drivers from the New Haven area as well as with representatives from the African American Affairs Commission who had become interested in the issue as well. I then requested that the Program Review and Investigations Committee conduct a study of the taxicab industry in Connecticut. I would like to offer my sincere thanks to this committee for agreeing to that request. I understand that the scope of this study includes not only my request but also the issues left unresolved by the 2006 task force on the industry. Clearly there exist operational, administrative, and governance issues in this industry. My specific concerns that I am pleased that the Committee will address are the current taxicab regulatory scheme (including the standard for issuing taxicab certificates and licensing operators) in which the Connecticut Department of Transportation holds primary authority and the Department of Motor Vehicles holds secondary authority and the effect of this structure on competition and equity issues therein; the possible repetition of functions currently existing in taxicab oversight; competition or lack thereof in the taxicab industry; diversity in management of the industry in terms of race and gender; and the merits of the creation of an office of state ombudsman for taxicab oversight and issues surrounding the driver-company relationship such as driver status (independent contractor vs. employee).
I was disturbed by the stories that the drivers told me regarding their working conditions. It appeared that the conditions vary greatly by region and some of these variations are not as one would expect. For example, the lease fee charged to drivers in New Haven is apparently significantly higher than that charged to drivers in Stamford. The situation in New Haven is such that it appears nearly impossible for a driver to earn a reasonable living working a regular work week. One possible explanation for this is the virtual monopoly held by one company in the New Haven area; I am curious as to the committee's ultimate explanation regarding the vastly different pricing in various areas of the state. In addition, apparently drivers in some areas are classified as employees and as such are eligible for workers' compensation benefits if they are injured on the job while drivers in other areas are considered independent contractors and thus are deemed ineligible for workers' compensation. One standard on this issue would seem desirable. There is a need to examine the structural barriers to entry which reduce the current level of competition in the taxicab industry; these structural barriers may be responsible for a lack of diversity in management.
I believe it is important to examine how taxicab services are regulated in other states and to analyze the advantages and disadvantages of deregulation of the taxicab industry including benefits to consumers. I am hopeful that with the results of this study the General Assembly will be able to craft a solution that will create a more equitable taxicab industry and better meet the needs of the public.
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