The Anaheim City Council Tuesday rebuffed an attempt by California Yellow Cab to have a competitor's taxi franchise revoked, paving the way for an end to a months-long battle between taxi companies over rights to operate in the city.
As was originally approved by the council in May, three cab companies will split 255 cab permits, with 155 going to Yellow Cab of Greater Orange County and the other 100 split equally between California Yellow Cab and A Taxi Cab.
The permits are extremely valuable because Anaheim's sprawling resort district, hotels, event venues and Disneyland are considered the most lucrative place in Orange County to operate cabs.
The 10-year taxi franchises were first approved after a taxi advisory committee spent months reviewing proposals from companies bidding for the coveted rights. But in June, Councilwoman Kris Murray successfully backed a request from California Yellow Cab for a new hearing. The company presented what it claimed was new evidence that A Taxi Cab should have been disqualified from the bidding.
California Yellow Cab argued that A Taxi Cab should never have been granted permits because the firm didn't submit a complete, audited financial statement and recently settled a lawsuit in which it was accused of not paying insurance deductibles after traffic accidents.
City staff recommended that council members reject the request, arguing that no new relevant information had been provided. In a more recent report, however, city staff members acknowledged that they could not confirm the licensing status of an accountant that A Taxi Cab claimed had audited its finances.
A Taxi Cab officials, meanwhile, said the issues being brought up are irrelevant and are part of a larger effort to squeeze out the company so the franchises can be divided by the two other, more politically connected firms.
California Yellow Cab, for example, hired former Mayor Curt Pringle’s lobbying firm as its political consultant. Pringle still has clout among some council members, especially Murray.
“The taxi business is pretty crazy … there's issues all the time. There's nothing that hasn't been taken care of,” William Gray, an A Taxi Cab manager, said during the June council meeting. “We're financially viable, we're very strong. I think we're much stronger than our competitors.”
Murray argued that the issues surrounding the company's financial documents warrant its disqualification. She also said that “substantial judgments” against the company had been revealed only after the franchises were originally approved.
“I think that is a legitimate reason for the city to take a second look,” Murray said.
Councilwoman Gail Eastman pointed out that the Orange County Taxi Authority Program, which regulates cabs countywide, recorded a few alarming incidents involving A Taxi Cab drivers, including driving under the influence, a positive drug test and the revoking of a driver permit for an assault and battery conviction.
The incidents "are very concerning to me,” Eastman said.
Tait noted that California Yellow Cab’s ratio of negative incidents to number of cabs was actually highest of the three companies.
Tait also argued that, as long as the process undertaken by the taxi advisory committee was trusted, the council should vote in favor of its recommendation to grant 135 permits to Yellow Cab of Greater Orange County and have the other two companies split the remaining permits — 60 each.
Sidhu, who like A Taxi Cab owner Hossein Nabati is an immigrant businessman, said that he voted to grant the rehearing to see whether relevant new information would come to light. Sidhu dismissed the questions about the accountant's signature as something that wouldn’t have dramatically lowered A Taxi Cab’s bidding score.
“Signed or not signed, mistakes do happen,” Sidhu said.
The vote tallies taken to decide the issue distorted the usual voting lines. Murray proposed stripping the 50 permits from A Taxi Cab and have the other two companies split the remaining permits — 60 each.and granting them to California Yellow Cab. However, the council struck down the motion in a 3-2 vote, with Councilwoman Lorri Galloway, Tait and Sidhu voting no.
Without enough council support to deny A Taxi Cab the permits, Murray ended up joining the majority in a 4-1 vote to allow A Taxi Cab to receive its permits. Only Eastman voted no.
Although the battle over the franchises appears to be over, two taxi companies are still at war. A lawsuit filed by A Taxi Cab alleges that a preferred provider arrangement between Disney and A Yellow Cab of Greater Orange County is an illegal monopoly. The suit has yet to be resolved.