Judge Rules Against More Front Range Cabs, Lower Fares
Taxi Drivers Challenge Ruling That Blocks Entrepreneurs and Stifles Competition
DENVER – It may seem that more taxi cabs and lower fares would create jobs and offer consumers lower fares and more convenience. But a Colorado government official says no, claiming lower prices and competition are bad for the residents of Adams, Arapahoe, Denver, Douglas and Jefferson counties.
Some 150 experienced taxi drivers seeking to form an employee-owned company, Mile High Cab, are asking the Colorado Public Utilities Commission to overturn an administrative judge’s ruling and let them operate in the five-county area and compete in a free market. Taxi service is tightly regulated by state government, and the judge’s ruling blocks fair market competition.
Mile High Cab wants to provide 150 additional cabs – about one for every 16,000 people in the five-county area, or one every 25 square miles. But while state Administrative Law Judge Paul Gomez finds Mile High Cab would be financially stable enough to compete – even with its proposed lower fares and no extra charge for additional riders or luggage – he claims competition might challenge existing companies, and that might be bad for consumers.
“The administrative law judge concluded that Mile High Cab is financially and operationally fit. But, the judge says that more competition will hurt the public,” says attorney Tom Russell, representing Mile High Cab. “The judge has the law and the evidence wrong. Mile High Cab will offer lower fares and better service. These veteran cab drivers just want a chance at the American dream. They aren’t asking for favors or government bailouts, they just want government to get out of the way and let them compete in a free market."
A 2008 report prepared by the PUC’s staff finds Denver’s two biggest cab companies, Metro and Yellow, charged more just to get into the cab than the average rate of companies in 14 comparable large cities. And one, Yellow, also charged a higher per-mile rate than the average. In addition, the study found many Front Range cab drivers complained existing companies set taxi lease rates so high that they had to drive 12 to 14 hours a day just to break even.
The PUC’s 2008 report states there have been ongoing state “policy efforts to expand the number of companies serving the Denver Metro area and to expand the number of authorized vehicles.” Yet the judge’s ruling would bar a willing startup from entering the market.
Mile High Cab is challenging the Administrative Law Judge’s ruling that competition in the five-county taxi market is bad for consumers. Lower rates and more cabs would help riders across the metro area, from Adams to Arapahoe to Denver counties. Russell and drivers are available for interviews. The story offers readers, viewers and listeners an intriguing view into the misunderstood world of taxi companies and drivers.