Want new taxi route? Get ready for a fight

Tuesday, Sept. 19, 2006 | 7:20 a.m.

Imagine the chaos that would ensue if every time MGM Mirage wanted to expand one of its casinos, its competitors at Harrah's and Wynn Las Vegas and the Venetian and - well, everybody - could object because it would take business away from the rest of the industry.

It would be anti-competitive, anti-free market, anti-American, right?

But that's how the Nevada Taxicab Authority governs its industry.

Next week the five-member board will consider setting a hearing for the expansion of A-Cab, a small taxi company owned by Jay Nady. He is better known to local sports enthusiasts as a championship boxing referee and the uncle of Pittsburgh Pirates outfielder Xavier Nady than as a transportation mogul.

Nady's company has authority to operate taxis with pickups only west of Interstate 15, which blocks A-Cab from getting into the more lucrative Strip resort and McCarran International Airport markets.

If a hearing is set on whether Nady can expand his business to the Strip and airport, that's when the heavy artillery will come out.

Taxicab Authority regulations allow the 15 other taxi company owners - including three other companies that also cannot pick up passengers on the Strip or at the airport - to challenge A-Cab's plan to move into the high-end neighborhoods. They can question whether A-Cab has the financial wherewithal to expand and try to convince the board that an A-Cab expansion would hurt their own businesses - a legitimate complaint for the authority to consider, and not a tough position for the companies to take, considering that any new entrant or expansion is bound to siphon some ridership away.

Even cab drivers have a voice in the process as the industry's two unions also are allowed to weigh in as "interveners." Drivers always take a dim view of sharing fares with other drivers.

"It's a lengthy process because all the owners want to intervene, and they'll spend hours trying to roadblock (a new entrant or expansion)," said Richard Land, who has been on the job as administrator of the Taxicab Authority for nearly a year and before that served on the authority board.

"Some of these owners are mad that he (Nady) got a certificate in the first place," Land said. "I've heard one owner say he'd fight Jay Nady's expansion to his death."

Land has seen the intervention process in action and in two recent cases, applicants didn't fare well.

Deluxe Cab sought an expansion similar to the one Nady is proposing. It was rejected.

In February, three executives from two existing cab companies submitted a proposal for a new company called City Cab. They want to put 75 taxis on the street and become Clark County's 17th cab company.

On the day of a prehearing conference on that proposal, attorneys for Whittlesea Transportation, which operates Whittlesea-Blue Cab and Henderson Taxi, challenged the inch-thick application, saying it failed to justify the certification it needs to operate. Just the challenge resulted in a two-month delay for City Cab's proposal to be heard.

At last month's Taxicab Authority meeting, the board agreed that some details were missing from the proposal and gave applicants George Balaban of Desert Cab Co. and Ray Chenoweth and Jaime Pino of Nellis Cab Co. three months to revise the application. Land said he hadn't heard whether the City Cab hopefuls would make revisions or abandon the request in the face of the stiff opposition.

Land said a number of out-of-state companies have expressed interest in competing in Las Vegas, but when they hear about the intervention process, they lose interest.

"I've heard from companies in New York and San Francisco that have taken a look here," Land said. "They must have some contacts here that tell them about the process because after the initial contact, that's the last we hear from them."

Land said he has never received a full explanation of why the system is set up the way it is, but he thinks he knows why it will never change.

"The folks who have certificates are humongous political donors," he said. "They don't want any changes."

Some of the history leading up to the establishment of the taxi regulations suggests that the rules were developed to protect longtime local cab company owners from renegade taxi operators that would pop in and out of town during big events to make a fast buck in the early days when there wasn't much traffic or much business. In addition to regulating the number of operators and the number of cabs they can run, the state agency also has all authority over rates. Every cab company charges the same per-mile fare.

Land said when applications are made for service modifications or expansions, board members don't just hear from the interveners and their opposition. They also get reports from the authority staff, which provides information about how much money each company makes and how well each company is serving the riding public.

One statistic that always stands out is the "blown shift" report, which shows the proportion of how many cabs a company operates to the number of cabs they are allowed to run. When a company doesn't use a cab it is allowed to operate, it's considered a "blown shift" and a high number of them can convince the board that companies aren't trying hard enough to meet the public need.

Why do rival companies try so hard to keep new companies from coming in or existing companies from expanding? Land has a one-word answer: Greed.

"They'll complain about a rival company's ability to do the job or that they don't have the financial resources to do it right," he said. "But the bottom line, I truly believe, is greed."