Taxicab panel may kill tip rule

Tuesday, March 12, 2002 | 11:02 a.m.

The Nevada Taxicab Authority will consider striking down rules that prohibit businesses from paying commissions for customer referrals.

Taxicab Authority administrator John Plunkett said within the next three months, board members would study cab driver tipping and the related issue of illegal diversion as part of a comprehensive review of all taxi rules and regulations mandated to be conducted every 10 years.

A workshop session Monday drew just three cab drivers -- a surprise to Plunkett who arranged to have the meeting at a spacious Sawyer Building conference room after receiving "hundreds of phone calls" from drivers inquiring about the meeting.

Under existing state law, cab drivers are prohibited from accepting tips from anyone but a customer who pays a fare, a practice routinely ignored by drivers and businesses that know drivers often give tourists advice on where to get a meal or see a show.

Critics say some drivers not only ignore the prohibition against tipping but will take customers to a high-tipping business against their will -- a practice referred to as diversion.

Plunkett, who has said his enforcement officers can't keep up with illegal tipping incidents, has never received a formal complaint from the public about diversion. However, the owner of a topless club who also is partner in the city's largest cab company, has complained that cabbies are diverting customers from his club to small all-nude clubs that pay higher tips.

Peter Eliades, who owns the Olympic Garden topless club, complained that authorities ignoring the tipping rule have turned the matter into a kickback bidding war.

Earlier this year, topless clubs Crazy Horse Too, Club Paradise, Cheetah's and Olympic Garden filed suit against their smaller competitors, accusing them of conspiring with cab drivers to siphon off business. The case will be heard next month by Judge Sally Loehrer, who in January issued a preliminary injunction prohibiting clubs from paying gratuities.

Meanwhile, Plunkett said he has ordered his enforcement officers to work undercover to find cab drivers who have diverted or attempted to divert customers. He said several drivers who have been caught will be brought before the Taxicab Authority for a hearing later this month.

Cab drivers found in violation of diversion rules normally are issued a citation, but Plunkett said an appearance before the board can result in a $500 fine or a license suspension or revocation. Plunkett hopes the threat of losing a job will make drivers think twice about diverting a customer.

Cab drivers and union officials who attended Monday's session unanimously supported Plunkett's proposal to repeal the ban on paying commissions.

"As long as a driver doesn't take advantage of the public, he should be allowed to take advantage of some of the referral tips he's offered," said Ruthie Jones, vice president of the Industrial Technical Professional Employees union, which represents drivers of Yellow-Checker-Star Transportation and Henderson Taxi.

Jones said part of the success of Strip magician Lance Burton could be credited to taxi drivers who received free tickets to attend a show and referred customers to it. Burton, who owns Trip Sheet magazine, a trade publication for Las Vegas cab drivers, has quit offering referral fees to drivers until the matter is either resolved in court or in the Legislature. Drivers can still sign up for free tickets.

The editor of Trip Sheet, cab driver Craig Harris, and driver John Shannon, editor of VegasCabbie.com, an Internet publication, also supported lifting the ban on tips, as did Ken Fletter of the United Steelworkers Local 711-A, which represents drivers of Ace, ABC Union, Vegas Western, A-NLV and Virgin Valley cab companies.

Milton Schwartz, a partner in Yellow-Checker-Star, said his board of directors voted unanimously in support of removing the prohibition of tips from businesses.

Only one speaker, community activist Chris Christoff, who has addressed the Taxicab Authority in the past about lapses in neighborhood taxi service, disagreed with the proposal to remove the tip ban.

"The Taxicab Authority has failed to work diligently to protect the consumer," Christoff said. "Nobody has come forward to say enough is enough."

Plunkett said the Taxicab Authority, which oversees Clark County's 1,500 cabs, has a June deadline to turn proposals in for consideration in next year's legislative session.

Plunkett also said he would like the board to propose legislation that would enable cab drivers to receive deposits from customers they think would not be able to pay for a ride. Drivers that are asked to take customers to crime-ridden areas feel they could be set up for a robbery attempt, and knowing a customer has the money to pay for the ride in advance lessens the chance of a confrontation.

The issue is controversial because it involves the potential for "profiling" of potential customers.