Taxi Licensing Hearing

Owners protest ‘burdensome’ new town laws

    Taxi company owners turned out last Thursday to tell the East Hampton Town Board that proposed changes to taxi licensing regulations would negatively impact them, to the degree, some said, of putting them out of business.
    Among the burdensome provisions, they said, are a proposed increase in the minimum required insurance coverage — which one man said could double his premiums — and a requirement that cars more than 10 years old, or with 250,000 miles or more on the odometer, be taken out of service.
    Town board members, with the exception of Councilwoman Theresa Quigley, who was absent, indicated that they would review the law before taking action, saying it was designed to protect and assist local cab companies, not create more challenges for them.
    Several years ago, a taxi owner complained to the board that an increasing number of out-of-town drivers were competing with locals for fares during the prime summer season. Since then, complaints and concerns have grown about the number of cabs operating, their safety, and crowded and chaotic scenes caused by cabs congregating at beaches and outside late-night spots.
    At last week’s hearing, however, attorneys representing several cab companies questioned whether the proposed legislation would adequately address those problems, and whether the town even had the authority and jurisdiction to enact some of the suggested restrictions.
    At question, in particular, is a proposed requirement that a cab company must have an office in East Hampton Town to obtain a license to operate here.
    Carl Irace, a former town attorney who drafted the original taxi regulations, called the new proposal “well-intentioned,” but said that “what it’s created is a story of a punishment that doesn’t fit the crime.”
    “A lot of the issue appears to be periodic congestion,” he said, suggesting that, if enforced, existing vehicle and traffic, highway, and public health laws, along with the taxi rules already on the books, can police that problem.
    He advised that the problem of having taxis clustered around certain spots, such as bus stops or near nightspots in Montauk and Amagansett, could be relieved by establishing designated taxi stands, and ticketing cabs that stop outside them.
    The town could limit the number of taxi licenses it issues, Mr. Irace said, citing opinions of the state attorney general and state comptroller that support a municipality’s right to do so. Additional licenses could then be issued to do business solely from June to September, when rider demand increases.
    However, Mr. Irace said, one of the state opinions indicates that the town cannot issue taxicab licenses to local companies only. “I think there are ways to achieve the goal,” the attorney said. “There might be safer ways for the board to operate.”
    Lawrence Kelly, an attorney representing Moko Taxi and Surf Taxi, two Montauk companies, noted that Suffolk County is seeking to establish a taxi and limousine commission. “The question is raised, then, what’s the role of town government and does it have a role in regulating the taxi industry. It’s not clear that it does have a role, under the law.”
    County Legislator Jay Schneiderman said Tuesday that the Legislature is indeed interested in setting up a taxi-licensing procedure, following passage of a state law last summer giving the county authority to do so. “To what extent that will limit the town’s jurisdiction, that’s not clear to me,” he said. But, “with or without it, I think the town still has limited authority in this area.” In particular, Mr. Schneiderman said, limiting licenses to those who are based here only raises constitutional concerns. It’s not required of other industries where town licenses are required, such as home improvement contractors, he pointed out.
    “We’re doing the best that we can. It’s not a 365-day operation,” said Carlton Cornelius Campbell Jr. of Rockers Express Transportation at last week’s hearing. The local cab drivers are only trying to make enough in the busy season to sustain them year round, he said, and are not gouging fares. “With these wolves or vultures coming in . . . they don’t follow the rules like we do . . . they don’t compromise . . . they carry on . . . all kinds of shenanigans.”
    “You want to keep the out-of-towners out, medallionize it,” Richard Quimby said.
    Brian DeParma of Hometown Taxi has a 60 to 70-car fleet operating in East Hampton and Southampton. Hometown also has taxis in other East End towns, as well as in Seaside Heights, N.J. That town, Mr. DeParma said, issues a limited number of licenses to operate taxis year-round, to companies that offer service 24 hours a day, seven days a week, which are allowed an unlimited number of cars. Seaside Heights also issues 10 summer-only licenses, and allows those companies to have a maximum of five taxis in use. That addresses the problem of the “weekend warriors,” coming in to siphon business from the local cabs, Mr. DeParma said.
    “We’re really trying to protect the general public, and the local cab companies aren’t the problem,” remarked Councilman Peter Van Scoyoc.
    “It’s a very hard business to operate,” Brian Damark of East End Taxi, Mr. Irace’s client, told the board. “I was in the Marine Corps for four years; I thought that was difficult until I came into the taxi business.” Mr. Damark said one thing that would help would be if the town designated taxi parking areas.
    Mr. DeParma said his insurance agent had told him that the cost of insurance, now $9,138 for cars insured at the state mandatory minimum of coverage, would go up to $13,659 a car if the town puts minimum coverage levels of $100,000 and $300,000 into effect. And Mr. Damark, who now pays $7,000 to $9,000 a year per car for insurance, said his premiums could double if the law is passed mandating more coverage.
    Should local companies that can’t afford increased insurance costs go out of business, larger taxi companies from out of town could replace them, dominating the market, Mr. Damark said. And, he added, “If taxi insurance is double, then we’re going to have to gouge people and double the fares.”
    “The bottom line for my client is, this proposition is just too burdensome and too restrictive on them,” Mr. Irace said. The lawyer also questioned the effect of provisions in the proposed law regarding fingerprinting drivers, and the disclosure of prior criminal offenses listed in certain sections of the state penal law. As the town law is written, he said, someone who had been convicted of shoplifting could be precluded from driving a cab. Other regulatory agencies and corrections laws already outline how people who have paid for prior crimes can go back to work, he said.
    The proposed town law would also ban taxis from idling for more than five minutes. The issuance of taxi licenses, and review of licensing issues, would be overseen by the town’s License Review Board, which now deals solely with contractors’ licenses.
    Several members of that board appeared at the hearing and said they were willing to take on that responsibility. They asked, however, that the board be given a secretary, and that compensation to members be increased along with the expanded responsibilities.