The ailing taxi industry in Orange County will limp along another year thanks to money cities will pay to support the watchdog agency that regulates it.
The meteoric rise of Uber and Lyft has decimated the number of taxicabs in Orange County so substantially that city managers are considering cuts to long-held safety reviews for taxis as the budget runs on empty.
The news is the latest warning that the death of the traditional taxi might be imminent if something doesn’t change soon. There are only 667 drivers registered with the Orange County Taxi Administration Program, down from 1,576 drivers four years ago. Meanwhile, Uber counted more than 8,000 drivers in the county in 2016.
Cab drivers blame their struggles, in part, on the very regulatory program that is threatened by their decline, saying its fees and restrictions have created an unlevel playing field that favors ride-hailing startups.
“It was unfair competition,” said Hossein Nabati, the former owner of A White & Yellow Cab, a Santa Ana taxi company that closed last year after three decades in service. His company, which gave 21,000 rides per week in 2013, was doing less than a quarter of that when it shuttered.
“Everything I have, I lost,” Nabati said. “I worked 40 years in America for this and have to close the doors.”
Cabs vs. Uber
While Uber and Lyft follow statewide rules, taxi companies in Orange County adhere to local standards they say are stricter – requiring cab drivers to take random drug tests, submit to regular vehicle inspections, buy expensive liability insurance and pay for multiple permits for the company, its vehicles and drivers
Nabati sued Uber in 2015 in federal court, contending the company has an unfair, government-created advantage that allows it to act as a “de-facto taxi” company without being regulated like one.
His attorneys blamed the state for choosing in 2013 to assume jurisdiction over ride-hailing companies rather than treating them like taxis. They blamed OCTAP, Anaheim and John Wayne Airport for creating rules they saw as unfriendly to cabs. And they said Uber continues to deliberately undercharge customers specifically with the intent to harm the cab industry.
In March, a federal judge decided Natabi could move forward with his lawsuit if he amended it so it doesn’t blame a state agency for Uber’s success and bolsters allegations of the ride-hailing company’s culpability. In essence, the order has shifted the case’s focus away…