A legislative committee heard mostly positive testimony yesterday concerning a bill that would update regulations and increase competition for taxis, shuttles, moving companies, and other motor carriers. The sponsors will address some concerns and bring the bill back on Tuesday.
The House Business & Industry Committee discussed a substitute for House Bill 194, introduced by state Rep. Tom Taylor, R-San Juan, and state Rep. Carl Trujillo, D-Santa Fe. Think New Mexico, a non-profit, sought this reform and drafted the bill.
Current state law requires anyone wanting to start a taxi, shuttle, tour bus, limo, or moving business to apply at the Public Regulation Commission for a certificate. These entrepreneurs must also notify their competitors, who can then protest the application.
To get approval for their business, these entrepreneurs have to hire an attorney and prove that existing companies have not fully served the market. The PRC must deny these applications if current companies show they would lose business to competitors.
HB 194 would shift the burden of proof. “Full-service” taxi and shuttle companies could protest applications from potential competitors. But existing companies would have to show competitors would harm the level of motor carrier service available to the community.
Full-service motor carriers include businesses that schedule customer pickups over the phone, centrally dispatch taxis at any hour of day or night, or regularly send shuttles to and from an airport.
The bill would also reduce barriers to entry. The PRC would issue certificates to new cab, limo, shuttle, and tour bus companies that had insurance. Tighter regulations would remain in force for ambulances, tow trucks, and competition with full-service firms.
A representative from the Public Safety Department explained New Mexico could lose $4 million in federal funding. The bill would protect those funds by updating state law. Federal regulations require motor carriers to insure their largest vehicles for $5 million.
Motor carrier operators could change what they charge customers without obtaining PRC approval. Rate changes would take effect immediately, unless they exceeded PRC maximums. Moving companies could no longer charge common rates and full-service firms could still protest competitor rates.
Over a dozen groups and individuals spoke in favor of the bill. Trujillo said Think New Mexico met with various stakeholders and secured about 90% agreement. Raymond Sanchez, a registered lobbyist for two Albuquerque cab companies, mostly criticized the bill.
Sanchez objected to amnesty provisions. The PRC should penalize cab companies if they start operating before receiving a certificate, he said. The bill makes an allowance for new businesses that did not realize they needed a license from the PRC.
A staff attorney from the PRC assured the committee that the PRC investigates every complaint it receives.
Two years ago Green Cab applied for a certificate from the PRC to operate in Albuquerque. The two cab companies in Albuquerque protested this application and Green Cab incurred $90,000 in attorney fees.
In July 2011, PRC staff responded to the Albuquerque cab companies. They wrote “the Albuquerque Cabs appear to operate as a cartel,” “they charge identical rates,” and “their interests may be best served by maintaining rates above the market rate.”
By comparison, Yellow Cab of Denver costs $2.50 up front and then $2.25 per mile. AAA Yellow Cab Company of Phoenix charges $2.50 to start and $2.00/mile. A five-mile trip would cost $13.75 in Denver and $12.50 in Phoenix.
Currently, ABQ Cab Company customers pay $2.50 and then $2.20 per mile. Yellow Cab Company of Albuquerque charges people $5.54 and $1.60 each mile. An individual traveling 5 miles would pay $13.50 to ABQ Cab and $13.54 to Yellow Cab.
Image via Ad Meskens.