Too many taxis in the city?

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How many is too many taxis in Sacramento?

There are more than 500 taxis in Sacramento, according to Dafna Gauthier, business permit manager for the city – a number Gauthier said is out of line for the population of the city.

Earlier this year, when city staff started fielding complaints from taxi drivers, cab company operators and business owners, Gauthier said city staff began looking into the emerging problems.

Cab drivers complained that there were too many taxis and business owners complained that taxis were parking in front of their businesses because there aren’t enough taxi parking spaces.

When staff compared the population of the city to the number of taxis, they found that, since 2004, the number of Sacramento taxis operating within the city increased 66 percent while population only increased 8 percent.

City staff told council members at the Aug. 4 City Council meeting that there was a “general consensus” that there were too many taxis in the city.

The City Council responded with a two-year moratorium on new taxis in Sacramento to give city staff time to analyze the problems and suggest ways to deal with them.

Gauthier is the city staff member who is taking the lead on the new study, which will address problems such as traffic congestion, limited taxi parking, passenger complaints and suffocating competition between companies.

“I want to look at the (city) code,” Gauthier said. “We have a multitude of information we need to research.”

“We need to ask who we compare to, how do we match up, and how can we be better,” Gauthier said.

Similar to other cities of its size, such as Fresno, Long Beach and Oakland, taxi cabs drivers in Sacramento are required to have a permit for operation along with a separate permit for the vehicle.

Although the drop rate – the base rate that a meter is set at when a passenger gets in – in Sacramento is slightly higher than similar-sized cities – $4 in Sacramento compared to $3.40 in Fresno, $3.10 in San Francisco and $2 in Oakland – the per-mile rate is calculated at a rate of one quarter mile, where other cities calculate on one-fifth of a mile, which makes the final bill add up quicker.

The cost of permits is lower in Sacramento than in other cities, as well.

In Sacramento, the cost for permit application for a new driver is $139. In Fresno, the initial fee is $225.

From 2004 to 2006, Sacramento underwent a study by a private firm to assess the local taxi industry and come up with a re-regulation plan to improve service quality.

The study resulted in a number of new regulations from City Hall, including setting a maximum on fares, raising the minimum standards for drivers and vehicles and promoting self-regulation and improved enforcement.

Along with those regulations, the city began requiring cab companies to form fleet associations – co-op taxi groups of at least 25 vehicles.

The intent was that the industry would self-regulate and that would solve many of the problems the city was having.

Abdul Kakar, president of the Sacramento Independent Taxi Owners Association, was a driver in the city for five years before moving his operation to cover the airport.

SITOA has an “on-demand service” contract with Sacramento International Airport that allows only the 85 members of the association to use the designated taxi area at the airport to drop off, pick up and wait for fares – other taxi companies can only drop off or pick up passengers at the airport by reservation.

Before the SITOA was formed, Kakar said taxi service at the airport was overly competitive and problematic.

“When we had no association over here, there were fights between cab drivers and the sheriffs were involved every day,” Kakar said.

Although the taxi area at the airport allows for just 10 cabs to line up, Kakar said there were times when double that number would be trying to crowd in, and often scuffles would flare up between cabbies over fares and position in the queue.

“After the taxi drivers formed their own association,” Kakar said, “there hasn’t been any problems like that.”

But requiring associations didn’t do enough to solve the problems in the city, Gauthier said.

“The goal was to let the industry run itself – let the competition drive themselves,” Gauthier said. “But that didn’t really happen.”

Gauthier, whose department is responsible for the issuing of taxi permits, said taxi service is “one of the cheapest industries” to get into on your own, and that opened the door for a “huge influx of permit applications and a flood of new taxis” as the economy declined over the past few years.

According to staff from Councilwoman Sandy Sheedy’s office, Sheedy suggested the moratorium to halt the growth and figure out how to reduce taxi numbers in the city.

Sacramento is similar to other cities such as Fresno, Long Beach and Oakland in how it permits taxis, but there are significant differences in the way each city regulates services.

Gauthier said in Sacramento there are quarterly meetings between city staff and representatives from the various taxi fleet associations in the city so there can be direct input from people in the industry.

“Fleet managers are the spokespersons for their association,” Gautier said. “They come to the meetings, they report back (to their members) and bring feedback to the next meeting so the association has representation.”

Gauthier said the study will be conducted during the two-year timeframe of the moratorium and should allow for a full examination of the issues.

Although Gauthier said she expects to make frequent progress reports to the City Council, it’s uncertain how often those reports will occur.

“Right now,” Gauthier said, “we are trying to formulate a strategy for accomplishing the study.”

Melissa Corker is a Staff Reporter for The Sacramento Press. Follow her on Twitter @MelissaCorker.

  • William Burg

    One taxi per 1000 people is too many? How many taxis per capita do the other mentioned cities have–and is the jump in numbers because, prior to a few years ago, maybe we didn’t have enough?

    • Mark

      Is too many taxis really the issue? I’ve had a couple of taxi drivers complain that there were too many. Because of the economy the drivers are hurting and some of independent drivers who used work mostly out the suburbs can’t make a living out there anymore so they are working more in the central city and airport. The long established companies don’t like the competition. It’s fine to say let the free market hash it out but does the consumer win with lower prices and better service? That’s not been my experience. One the most frustrating thing about these taxis drivers from Elk Grove and elsewhere is that they don’t know Sacramento from jack so you have even explain the alphanumeric system to them.

  • bye bye Sacpress

    “Earlier this year, when city staff started fielding complaints from taxi drivers, cab company operators and business owners, Gauthier said city staff began looking into the emerging problems.”


    The paragraph above pretty clearly shows how the actual fare paying taxi consumers rate in the discussion… zilch! The only ones with a voice in this “discussion” is Yellow Cab of Sacramento and their city council campaign donations.

    • bye bye Sacpress

      BTW, the instigator of the moratorium was Sandy Sheedy, who received a $250 donation from Yellow Cab on 12/31/10.

      Darrell Fong got $1000 on 9/23/10, for which he subsequently stated his support for requiring all taxis have “computerized central dispatching” (ie all taxi’s must be Yellow Cab).

      Starting to see a pattern here?

  • Craig Powell

    The city council’s two-year moratorium on new taxi permits is deplorable public policy. Neither city staff, nor the council, is competent to determine the “right” number of taxi cabs in Sacramento. That is for the functioning market to decide. If there are “too many cabs,” fares will fall and cabbies will fail and leave the business.

    The “general consensus” that there are too many cabs is a fiction concocted by current cab owners who are shamelessly using the power of government to stifle their competition and increase their fares. Council members are either utterly clueless about the basic workings of the market or they have been influenced by campaign contributions, as noted by cogmeyer above.

    The victims of this mindless policy are the elderly and the disabled who rely on cabs more than any other group. Most are on very limited incomes and will suffer as cab fares inevitablly rise in response to the council’s limit on supply. This qualifies as one of the most asinine decisions of the council this year. We suggest that the California Attorney General review the matter and determine whether the moratorium constitues a violation of federal or state antitrust laws.

  • Tony Sheppard

    It certainly looks like we have too many when the article is accompanied by a photo of a New York street scene – why not a picture of Sacramento?

    • William Burg

      Perhaps they couldn’t find a local taxi to take a photo?

    • Ben Ilfeld

      I just looked through the pictures and there are some of both – but I question that as well.

      My guess is it was a search for a stock photo that would work on the front page with limited time.

  • The City Council has no understanding of the free market system, or they are on the take.

    • bye bye Sacpress

      Your “or” should be replaced by an “and”.

      To confirm that the council majorities motives are not pure, simply consider how often the council has approached the taxi “issue” in the last year. In each case the council has made moves which favor a few select companies.

    • Mark

      The market has never, ever been free. That’s yet another faith-based delusion. Even in third world countries where it seems to be every man for himself -it’s not. Controlled markets its always been and always will be. So it’s about trying to create a market that is most fair and open to all.

  • M@ Urquhart

    If there were too many taxis, wouldn’t the fares go down due to the robust competition? I think that answers the question. Perhaps the fear of having to lower prices is driving the argument…. BWDIK?

    • Ben Ilfeld

      It would seem rates are also regulated.

      The whole thing gives me the sense that our local government is regulating an industry in which it is not an expert and policy is being driven by private entities.

    • Mark

      Doesn’t happen that way. There’s lots of other factors involved -cost of leasing the cabs, insurance,fuel, etc. Drivers must make a calculation and determine if it’s worth it. More competition will not necessarily bring down the cost of a cab ride in a city like Sacramento. Too much supply and too little demand will only hurt the established taxis companies. Regulations of taxis in every city has actually been a good thing for the consumer and taxi companies.

    • bye bye Sacpress

      The benefit of regulation is consistent pricing, basic safety standards, licensed drivers and some restrictions to avoid 3rd world taxi pileups at key transportation hubs. I think most of us can agree this is an appropriate role for city government.

      The problem starts when politicians receive campaign support from a particular company, and then subsequently attempt to abuse their political power to hold prices artificially high and to favor one company over another. We citizens NEVER gave the city council the right to overcharge citizens for private services, and in fact we should expect the city is working on our behalf to negotiate the best price.

  • Joe Gamble

    Ever tried to get a cab on a weeknight from 10th and J to 28th and J? It’s nearly impossible to step onto the curb and hail a cab during the lull of the week. After the front desk at the hotel calls a cab for you, It’s been a 35 minute wait.

    Fortunately for us, We have supported a local cab driver for the last 10 years. Direct dial, No waiting and No scenic routes. Our regular cabbie asks us to report to him when we feel like we were ripped off by another cabbie, Even the ones who work for him. He operates the SMART Cab Association in Sacramento. Sometimes they are so busy we are forced to take Yellow, and Yellow is horrible.

    No, Sacramento does not have too many taxi’s

  • Given the high number of taxis per capita in the city it would make sense the price of a ride would go down compared to bigger cities like San Francisco. I can’t tell if that’s the case from this article.

    If “right-sizing” the number of taxis in the city is the goal, then the council should pass an ordinance that sets a yearly or biannual expiration date on taxi permits and then raise the cost of the permits with each new cycle until the extra infrastructure required by the taxis is paid for and tensions between drivers and local businesses have chilled out. Or why set the price of the permits by auction and invest the proceeds in infrastructure and mitigating the taxis’ environmental impacts? Then ‘the market’ would set the permit cost and desirable outcomes could be achieved all around.

    As an aside, I don’t know when the “lull of the week” is that Mr. Gamble speaks of. I regularly see cab drivers downtown just leaning up against their cabs chatting with other drivers and hanging out at night and on the weekend. That makes me think there is a surplus of drivers. Last Sunday, one cab driver even called out to me and said I looked like I needed a ride when I had less than half a mile to travel. I ignored him, but the encounter didn’t improve my image of cab drivers.

    Also, as a pedestrian, I find cab drivers are some of the more flagrant traffic scofflaws. They need to be taught how to follow the state’s motor vehicle code. Maybe the answer includes a recertification of their drivers’ license along with the renewal of their operator’s permit. That could also thin the herd.

  • Davi Rodrigues

    First it’s regulations, then it’s subsidies, and after that comes bailouts. That’s what happens when government sticks it’s controlling nose into private business operations.

  • JJ Hurley

    I think this is a market issue; I would take cabs far more frequently if the price was better. The high flag drop rate makes the cost of taking a cab for short trips unreasonable.

    Bit of advice: In my experience it is the tendency of Sacramento Cabbies to take “scenic routes” that are longer than necessary. Somehow no matter what part of downtown I am in they will try and route me on the freeway, despite the fact that my trips begin and end on the grid. By telling them exactly how to get home on City streets the trip is almost always shorter, and cheaper, than if we had gone on the freeway.

  • Anonymous

    Municipal taxi service cannot be left up to the “free market” without a central authority. That simply just won’t work.


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