Taxis driving around Santa Monica will now operate under a new franchise-based system approved by the City Council, reducing the number of cabs by more than half and requiring them to follow various regulations.

The City Council voted Tuesday, June 30th to approve an ordinance establishing a franchise system for the regulation of taxicabs, limiting the total number of vehicles allowed to operate in the city to 250. The law calls for a competitive bidding process to award franchises to no more than eight cab companies with a minimum fleet of 25 vehicles.

Independent drivers and small companies will have the opportunity to form their own associations to submit bids for franchises.

Under the law, taxi companies will be subjected to certain regulations including providing discounts to seniors and persons with disabilities, having a distinct name, color scheme and cab numbers, ensuring that drivers are proficient in English and requiring vehicles to be no older than a specific number of years.

The law comes after the city has seen an increasing number of taxis operating within its boundaries, particularly in downtown, leading to traffic and parking problems, as well as impacts on air quality and the environment. A study done in 2007 found that 412 cabs were operated by 55 companies, but the number has since increased 27 percent to 522 cabs for a resident population of about 91,000, deputy city manager Elaine Polacheck told the council.

“What we discovered when we began looking at taxis in Santa Monica is that we have about twice as many as we need,” City Councilman Kevin McKeown told The Argonaut.

“That means unnecessary circulation traffic and pollution as too many cabs jockey for the limited number of passengers, and it’s bad for the working drivers because they can’t earn a decent wage when too many of them are dividing up the potential fares.”

The influx of taxis driving around the city seemed to be the result of a law in which cab operations were regulated based on an open-entry system where there was no limit on the number of vehicles that can operate.

Tom Drischler, taxi administrator for the City of Los Angeles which also operates a franchise system, noted that many cabs from Santa Monica have been coming to Los Angeles for a long time to pick up passengers because there was not enough business within Santa Monica.

“We’re pleased that you’re going to be taking some action now to get a better handle of your taxicab system,” Drischler told the council.

When the city was considering establishing a new system, staff had recommended that a moratorium be implemented on the issuance of new taxi licenses in the meantime, but the City Council declined to institute the moratorium. Staff had also recommended that a medallion-based system be explored as an alternative to franchises, making the transfer of licenses conditioned on city approval of the owners’ qualifications.

Some cab operators spoke in favor of the city regulating the number of taxis that conduct business in Santa Monica. They say that with the boost in the amount of taxis, drivers face fierce competition and have seen their hourly wages drop.

“I’m really in favor of the City Council taking strong action as soon as possible to come up with a solution,” said Don Alexander, general manager of Eurotaxi.

Wendy Radwan, general manager of Santa Monica-based Taxi Taxi!, called the franchise proposal “very thorough and well conceived” and she wanted to ensure that preference was given to local companies, something the council had considered.

“Our Santa Monica-based business has been providing many benefits to our community for over 19 years,” she said.

McKeown said a key element of the franchising system is that it will allow for taxi vouchers to be granted to senior citizens.

Among the other requirements of the ordinance is the establishment of a single-metered fare rate equal to the fare set by the Los Angeles Department of Transportation. Two flat rates will be set for trips to Los Angeles International Airport, one for trips originating north of Interstate 10 and one for those starting south of the freeway.

“Now that the enabling ordinance has had its first reading, we’ll be able to request proposals from interested taxi operators and select the best qualified and most willing to go the extra mile for cleaner air and a reduced service rate to seniors,” McKeown said.