In the wake of recent high-profile complaints about the New Orleans Taxi Bureau, one suggestion has been for New Orleans to emulate New York’s system for regulating taxi cabs by creating a new taxi/limousine commission and adopting a medallion system. In my view, this is a monumentally bad idea.
An impetus for this proposed change is related to complaints against the New Orleans Taxi Bureau and its chief, Malachi Hull, including an incident I wrote about previously when a Taxi Bureau inspector, Wilton “Big Will” Joiner, slammed a tour guide in the side of a parked car full view of a crowd of appalled tourists. This was troubling because Taxi Bureau investigators aren’t peace officers; they lack authority to detain or arrest anybody.
It’s clear that the Taxi Bureau is ill-managed and corrupt, and institutional changes certainly shouldn’t be rejected out of hand. However, New York’s supposed “reforms” are not something New Orleans should replicate.
Unlike in New Orleans, New York has always used peace officers for implementing its taxi regulations. This was previously done via the so-called “Hack Bureau,” which was simply an office within the NYPD. After the Taxi and Limousine Commission was created in 1971, taxi inspectors continued to be peace officers, even though they merely enforce administrative regulations.
There are at least two reasons that this is problematic: 1) peace officers are expensive and New Orleans, being cash-strapped, can’t afford to use them for enforcing administrative laws; and, 2) peace officers have authority to use force (an authority they are likely to exploit), which shouldn’t normally be necessary in merely enforcing taxi regulations.
Indeed, this has caused no end of problems in New York. Taxi enforcers don’t exercise more discretion when you give them more power; to the contrary, they become more abusive and brazen. In 2004, for example, a New York Taxi Commission inspector actually arrested 60 Minutes reporter Mike Wallace (who was then 86 years old) for disorderly conduct simply because he questioned how his driver was being treated.
If people like Wilton Joiner are given police powers, they won’t only slam tour guides into cars, they’ll be arresting tourists for having the audacity to voice concern.
On the other hand, if the bureaucracy of the New York Taxi and Limousine Commission actually engendered clean, responsible governance, it might still be something worth looking at. Instead, it has been rife with scandal and mismanagement.
For example, Jay L. Turoff, a former chief of the New York Taxi and Limousine Commission and owner of a fleet of cabs, pled guilty in 1989 to mail fraud stemming from a scheme to misappropriate 23 taxicab medallions and more than $500,000 in taxicab revenues.
Moreover, the Taxi and Limousine Commission was successfully sued by drivers in the late 1990s related to “Operation Refusal” in which the city targeted drivers for allegedly refusing service. Alas, the Commission did so by brazenly disregarding drivers’ constitutional rights, denying due process and clamping down on protests.
Nevertheless, the biggest problem with taxi regulations in New York involve the medallion system itself. Last week, Uptown Messenger columnists Allan Katz and Danae Columbus argued that creating a property right in a license to operate a taxi cab will allow drivers to generate wealth and provide them with a substantial business asset. However, this has not been the experience in New York, where medallions are almost entirely owned by wealthy investors and the drivers themselves are simply independent contractors.
Your average cab driver in New York leases his cab from a medallion holder and has to pay roughly $130 before they break even, forcing them to work long hours for low pay. This wasn’t always the case. Some cab drivers owned their medallions at first, and the rest were employees of medallion holders who earned a decent living and were paid benefits. However, in 1979 the Taxi and Limousine Commission allowed medallions to be leased out for 12 hour shifts, turning drivers into independent contractors.
The result is that cab drivers are poor and fares are too high, all so that the wealthy bastards who own medallions can get a massive return on their investment.
Oh, and it is a huge investment. The market price of a New York taxi medallion has ballooned to over $1 million.
Why are they so expensive? It’s because the number of taxi medallions has barely been increased since they were first introduced in 1937. Medallion owners lobby fiercely to ensure that the number of medallions stays virtually constant guaranteeing that that scarce resource will continue to increase in value (and meanwhile, the public faces a severe shortage of cabs).
The long and short of this is that New York’s system of regulating taxi cabs is expensive and highly dysfunctional, and certainly not anything that New Orleans should be looking to copy. By comparison, the New Orleans Taxi Bureau and our system of licensing are coherent and sane.
The problem has related more to a lack of oversight by the mayor’s office. It’s easy to blame structures instead of the individuals when an arm of government goes sour, but this is one scandal that Landrieu needs to step up and own. Hull smelled bad when Landrieu hired him, yet he did anyway.
That said, providing greater oversight of the Taxi Bureau should certainly be on the table, and perhaps some institutional changes could prevent further scandals. Irrespectively, whatever path we take should be more modest and tailored to our own needs. We definitely should not repeat the mistakes made by other cities, particularly when they are as glaring as New York’s.
Owen Courrèges, a New Orleans attorney and resident of the Garden District, offers his opinions for UptownMessenger.com on Mondays. He has previously written for the Reason Public Policy Foundation.