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Legislation Undermining Local Taxi Regulation Authority Sent to Governor

Flawed Bill Redrafted in Final Hours of Session

September 2, 2016
Without any meaningful input from the public and affected stakeholders in the closing hours of the legislative session, the Legislature redrafted AB 650 (Low) to arbitrarily restrict the ability for cities and counties to properly regulate the taxi industry, in an attempt to level the playing field for taxis against their competition (transportation network companies, or TNCs, such as Uber and Lyft).
Enhancing competition at the expense of maintaining important community standards, including ensuring public safety, community-wide coverage, and disabled access is the wrong approach.

The regulation of taxis has been a municipal affair for nearly a century. Local governments have begun to modify regulations to provide a balanced regulatory approach in response to the quickly evolving for-hire transportation industry. AB 650, however, limits their authority and reverses such advancements. Rushing a major policy shift of this magnitude could lead to more problems than it looks to solve.
AB 650 applies unevenly. A carve-out for the city and county of San Francisco was inserted into the bill, despite other unique circumstances other cities may also have. Whatever the justifications, the reality is that for all other cities and counties, much of their authority would be retroactively limited to what they had in place on July 1, 2016.
If the bill is signed, cities and counties would no longer be able to:
  • Impose any new service charges, fees, or assessments on taxicab transportation services even if taxicab companies are newly introduced into those jurisdictions;
  • Impose fees for taxi driver permits in excess of $75 in perpetuity, regardless of inflation, with no consideration of existing constitutional restrictions on permit fees or the real cost for taxi program administration; and
  • Impose any additional regulations to help ensure adequate levels of service to all areas within the jurisdiction for individuals covered under the Americans with Disabilities Act of 1990, such as expansion or adoption of an ordinance similar to Los Angeles’ requirement that 10 percent of its taxi fleet must be wheelchair accessible. 
While purporting to “level the playing field” for taxis, this measure will not accomplish that objective. AB 650 continues to hold taxicab regulation to a stricter standard than TNCs. Some cities have enacted more stringent background criteria than required by the state and it remains unclear if this legislation may prevent cities from adopting standards stronger than what’s required by state law. In an era of increased threats to the general public, the Legislature should aim for strengthening safety measures, not weakening them.
Switching taxi regulation from locals to a state agency is also part of the bill’s objective, which is apparent in the intent language. Earlier versions of AB 650 proposed that the California Public Utilities Commission (PUC) assume jurisdiction to regulate taxis because it also regulates TNCs. The problem is that legislators and the Governor have proposed to reform the PUC, which would include switching the regulation of TNCs to the California State Transportation Agency. That measure failed to make it out of the Legislature in the final hours of session. Meanwhile, AB 650 limits the only existing regulatory authority for taxicabs when there is not even a clear home for taxi regulation at the state level. At a minimum, this legislation is premature.
The world of for-hire transportation is rapidly changing. TNCs have expanded options in a revolutionary way. Regulations for taxis should be modernized, but such change should take place in a thoughtful and deliberative forum instead of with legislation redrafted in the late hours of a legislative session. Local governments should be a full partner in any discussion of the integration of new technologies affecting transportation options within communities, so that important community priorities such as public safety, community-wide coverage, anti-discrimination policies and disabled access can continue to be assured.
Gov. Jerry Brown should veto AB 650 and allow time for future legislation to be more carefully drafted with the input of affected local agencies and ensure that any role for the state, including the specific agency tasked with new responsibilities, is clarified. 
Next Steps
Cities are encouraged to submit veto request letters on this legislation. A copy of the League’s letter and sample letter can be obtained at www.cacities.org/billsearch by plugging AB 650 into the search function.

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