Does Worcester Need More Cabs?
Tuesday, October 09, 2012
The council adopted the moratorium due to disagreements between taxi cab and livery company owners over the enforcement of livery regulations and so the City Council could have time to determine whether the number of livery vehicles operating in Worcester needs to be limited. Currently, there are 110 taxi medallions in use in the city, and some estimates have placed the number of illegally operating livery vehicles at around 100 as well.
Under current regulations, liveries are required to register with the Worcester Police Department and are limited to providing rides that have been arranged at least two hours in advance. The moratorium on the issuance of new livery vehicle licenses was adopted on July 17 of this year and runs through December 31 or until the Council adopts a new policy.
Research Bureau: Don't Limit Liveries
In order to aid in the decision-making process, the Research Bureau issued the report "Fare Play? Regulating Worcester's Livery Vehicles and Taxes." Based on the report's findings, the Research Bureau recommended that the city not set a limit on the number of livery vehicles because it would increase the number of illegally operating vehicles in Worcester, which skirt the mandatory safety inspections required by the city.
The report goes on to suggest the city reconsider the two-hour advance fare requirement as well because "it does not demonstrably serve the public interest, and would be difficult to enforce in the absence of draconian methods that divert police attention from more important matters."
If Worcester chooses to continue to impose restrictions on livery operations, the Research Bureau recommends that the number of taxi medallions be increased annually and that the new medallions be distributed through a public auction.
Taxis Can't Compete
Former Worcester taxi driver Ron O'Clair said his concerns center around the different insurance requirements for taxis and liveries. Licensed taxis are required by law to have taxi insurance, which carries a substantially higher premium, while livery vehicles are not.
"If the city removes the two hour advance requirement for livery service and allows the livery car services to operate exactly like the established cab companies, why should the taxi cabs have to pay far higher premiums on their insurance?" said O'Clair.
"The only thing left that would distinguish between a taxi and a livery car would be that taxis have a meter installed to regulate the amount of fare charged, and the livery cars can flat rate all their fares, undercutting the established rates per mile set by the city."
While passengers may enjoy the lower, flat rate fares of livery vehicles, removing the two-hour advance fare requirement would put the city's taxis at a serious disadvantage, unable to compete on price and saddled with insurance rates of upwards of $12,000.
"If I owned a large fleet of taxi-cabs, I'd seriously consider re-registering my fleet as livery cars when they come up for renewal at year's end," O'Clair said.
"I'd still be allowed to operate like a taxi cab, and I would only have to pay livery rates on my insurance which is a major expense of operating a taxi cab fleet."
The Research Bureau only addressed the issue of differing insurance rates for the two types of car service briefly in its report, stating that "the extent of the difference in insurance rates is in dispute, and we have not been able to identify a reason for it."
"What is fair in the fare business?" asked O'Clair.
"As it is now, it favors the livery car service with lower insurance rates and no regulation on the amount charged for their service."
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