We don’t usually recommend that Coloradans in search of entertainment witness a hearing at the state Public Utilities Commission. Those highly technical proceedings are far more likely to cure insomnia than keep anyone on the edge of a seat.
But today’s PUC hearing on whether to give 150 more taxi permits to Colorado Cab (known to most of us as Denver Yellow Cab) and 150 additional permits to startup Liberty Taxi could be an exception, given the head-spinning positions of some of the players in this case.
As a general rule, we believe companies that wish to enter a market or expand within it are in the best position to judge their chances. So we would hope PUC commissioners look favorably on additional permits. If they do, however, they’ll have to address awkward questions about why two of them — Matt Baker and James Tarpey — rejected a request for 150 taxis by startup Mile High Cab just a few months ago.
In the earlier case, the commissioners adopted the skeptical views of PUC administrative law judge Paul Gomez. His 85-page analysis claimed that Mile High’s entry into the market “could very well result in impaired services, higher rates, and ultimately the type of destructive competition this commission is charged with protecting against.”
In the current Yellow Cab and Liberty case, however, that same judge sided with the companies and approved twice as many additional permits as Mile High wanted.
How could 150 taxis represent a potential disaster for the cab industry a few months ago while 300 taxis are now considered acceptable? Gomez tried to square this circle by arguing that Mile High threatened to flood the streets with “undifferentiated” cabs, while Yellow and Liberty both offer plans to expand the market. In fact, Mile High offered a different business plan, too, but Gomez apparently didn’t like it.
What will commissioners make of the inconsistency of the decision before them — or will they even acknowledge it?
Speaking of incoherence, Yellow Cab was among the vested interests that lobbied successfully against a bill in the legislature earlier this year to open up the metro cab business to more competition. Opponents claimed the bill would have triggered an oversupply of cabs, creating chaos at cab stands while adding to congestion and air pollution.
Yet Yellow Cab has no problem with adding cabs to its own inventory. The public is apparently supposed to believe that cabs at startup companies are the source of any problems.
As if to thicken the plot, an undercover probe paid for by industry heavyweight Metro Taxi and released in the run-up to the hearing shows taxi drivers who wait in line at hotels often reject would-be customers who wish to go only a few blocks. Metro naturally views this as evidence of a taxi glut, although it’s hard to imagine drivers ever happily welcoming a tiny fare when they expected a $60-plus drive to the airport. But at the very least, the investigation demonstrates a need for the industry to better police its employees.
We hope the PUC doesn’t use the Metro Taxi study to justify a policy of restricting entry into the taxi business and suppressing competition. Yellow and Liberty should get their requested permits — even if PUC commissioners have to be as confusingly inconsistent as Judge Gomez.
