Politics & Government
11:28 am
Mon May 6, 2013

City Considers Changes For Milwaukee Taxi Industry

More taxicabs could soon be rolling on Milwaukee streets. In 1992, the city capped taxi permits at 350. Now a group of cab owners and at least one alderman want to lift the cap. This afternoon, a Common Council committee will solicit opinions about the quality of taxi service today and whether or not the city needs more.

Drivers await fares outside a downtown Milwaukee hotel
Credit Bob Bach

“It was raining hard in ‘frisco, I needed one more fare to make my night. A lady up ahead waved to flag me down; she got in at the light…” Like the driver in Harry Chapin's 1972 hit, Taxi, Cabbies weave through Milwaukee’s streets, hoping to earn enough fares to scratch out a living behind the wheel.

Mohammad Frah came to the U.S. from Jerusalem in 1999.

"Like for instance I started working at 6 o’clock today and what time is it? It’s 12. So, I made two rides, one for ride for $12 dollar and one ride for $10, in almost six hours," Frah says.

He'll lose lose money, if he takes in only $22 a day. Drivers rent their taxis from companies for about $400 a week plus pay the fuel costs. Frah’s friend, Mike Maasari has driven cab since coming here from Morocco 14 years ago. He says, to earn a profit, you must remain dedicated.

"Six to six, seven days a week" Maasari says.

Many of the drivers are immigrants and most cannot afford a taxi permit. Public passenger vehicle permits here are worth at least $150,000 - a few companies hold most. They are responsible for maintaining the vehicles, covering insurance costs and hiring drivers. What City Hall capped decades ago – was the number of permits issued – there are now 321. At the time, they sold for only $85, so their cost has multiplied by 18-hundred.

Attorney Anthony Sanders says those two facts – the high cost of permits plus the cap, prompted his public interest law firm to sue on behalf of drivers.

"If you can’t start your own business because of governmental regulation that does not actually protect the public, but all it does is protect existing participants in the market and prevents you, yourself, from earning a living, then that law is unconstitutional because it violates your economic liberty," Sanders says.

Sanders says his Institute for Justice wants to break open what it calls Milwaukee’s cab “cartel.”

Last month, a Milwaukee County judge ruled that the city cap is unconstitutional. Alderman Robert Baumann is proposing legislation to repeal the limit and issue 50 new cab permits within the next 18 months, with more following. He also wants to prohibit new applicants from owning more than two permits and keep annual fees under $400. Baumann says the changes would generate opportunities for entrepreneurs and satisfy demand for more taxi service.

"I’ve heard from bar owners, I’ve heard from restaurant owners, I’ve heard from downtown residents that cab availability, cab supply, is a problem. There is a shortage of cabs in the city of Milwaukee especially on weekends and especially on weekend nights," Baumann says.

To learn more about the demand and quality of cab service, the council’s Public Safety Committee has invited representatives from business and the hospitality industry to testify this afternoon. Earlier, the panel heard from the taxi industry. Red Christensen is local spokesman for the Wisconsin Association of Taxi Cab Owners. He doubts the city needs more.

"Based on the cab industry and what drivers have said to me over the last three to four years, rides are down every year. Are people all of sudden going to decide to take cabs because they’re lined up three deep in downtown Milwaukee? I doubt it. I think they need to do a study," Christensen says.

Eliminating the cap on permits could enable drivers become owner-operators. The city would have to figure out how to check quality. Regarding the legal proceedings against Milwaukee, the city and group that sued will meet in court on May 30.