Actions Related to the Agreement with Taxi San Jose for the On-Demand Ground Transportation Program

Transcription

1 CITY OF SAN JOSE CAPITAL OF SILICON VALLEY TO: HONORABLE MAYOR AND CITY COUNCIL SUBJECT: SEE BELOW It) COUNCIL AGENDA: 11-^-15 ITEM: 6.1 Memorandum FROM: Toni J. Taber, CMi City Clerk DATE: SUBJECT: Actions Related to the Agreement with Taxi San Jose for the On-Demand Ground Transportation Program RECOMMENDATION: As recommended by the Transportation and Environment Committee on October 5, 2015, accept the report regarding citywide taxicab regulations and operations of taxicabs and Transportation network Companies (TNC) at the Airport.

2 T&E AGENDA: 10/5/2015 ITEM: d.5 CITY OF C: 12* s, SAN TOSE CAPITAL OP SILICON VALLEY TO: TRANSPORTATION & ENVIRONMENT COMMITTEE FROM: Larry Esquivel Kimberly J. Becker Jim Oitbal SUBJECT: SEE BELOW DATE: September 22, 2015 Approved ^ ( Date f/g SUBJECT: ACTIONS RELATED TO THE AGREEMENT WITH TAXI SAN JOSE FOR THE ON-DEMAND GROUND TRANSPORTATION PROGRAM RECOMMENDATION Staff recommends: 1. Accept this report regarding city wide taxicab regulations and operations of taxicabs and Transportation Network Companies (TNCs) at the Airport. 2. Refer the following actions to the full City Council for the October 20, 2015, City Council Meeting: a) Adopt an ordinance amending the Municipal Code Sections in Title 6 and Title 25 related to Taxicab and Transportation Network Companies to address changes approved by City Council; and b) Adopt a resolution authorizing the City Manager to negotiate and execute an agreement with Taxi San Jose to provide On-Demand Ground Transportation Dispatch Services at the Norman Y. Mineta San Jose International Airport to implement the new Airport On-Demand Dispatch Model (Modified Option 2) as approved by Council on March 4, 2014, with an effective date no later than February 1, 2016, through January 31, 2021, and authorizing the City Manager to exercise up to five (5) one-year options to extend the agreement through January 31, 2026, OUTCOME *. This memo provides staff response to requests from City Council to review opportunities to 'level the playing field' between the taxi industry and the Transportation Network Company (TNC) industry, which includes companies such as Uber, Lyft and Sidecar. Implementation of recommendations related to the two industries and the agreement with Taxi San Jose for dispatch services at the Airport will allow on-demand dispatch services to continue providing a stable

3 September 22, 2015 Page 2 of 9 dispatch management program for taxis at the Airport with improved technology, systems and processes. / BACKGROUND The March 4, 2014 City Council action approved a direction for a new On-Demand Dispatch model at the Airport and a Request for Proposal (RFP) for dispatch services. Following the RFP process, Taxi San Jose was recommended for award of the agreement at the June 23, 2015 City Council meeting. At this meeting City Council directed the City Manager to: 1. Decline to implement the City Council approved changes to the On-Demand Ground Transportation Program and instead maintain the current model for on-demand taxicab and door-to-door shuttle regulation until such time that the citywide regulations of taxicabs are comprehensively reviewed and revised by Council. 2. Return to the Transportation and Environment Committee no later than October 2015 with an update and revised citywide regulations and modernized technology implementation, particularly in dispatch, to reduce costs to customers and providers. 3. Extend the existing contract with Taxi San Jose until January 31, 2016 with the modifications to allocate Company permits as described by Airport Staff at the June 23, 2015 meeting and to begin collection of the Airport cost recovery fee of $1, Allocate unused driver permits to all authorized companies equitably, 5. Enforce a rule that would not allow individual drivers with permits to drive on their off days under a company permit. The Rules and Open Government Committee on August 19, 2015 directed staff to: 1, Evaluate and recommend any changes to Title 6 and Title 25 of the San Jose Municipal Code as they pertain to Taxicab and Limousine Service regulations in an effort to provide consistency with respect to the regulation of TNCs. These include safety issues, such as background check and drug/alcohol testing, or operational matters, including fees or pricing models. 2, Return to an October City Council meeting with the above information, during which the Management and Operating Plan for the TNC's and On Demand Service Model will be discussed. The Rules and Open Government action included documents and recommended edits to the Municipal Code received from the taxicab industry as a point of reference to use in the analysis and recommendations by Staff. ANALYSIS Staff from the Airport, Transportation and Police Departments have met to discuss the concerns expressed by City Council and the Rules Committee regarding 'leveling the playing field'

4 September 22, 2015 Page 3 of9 between the taxicab and TNC industry regulations both city wide and at the Airport. The Police Department,.through Title 6 of the San Jose Municipal Code, provides the regulation processes for the taxicab industry for the City and the California Public Utilities Commission regulates multiple other ground transportation industries, including the TNC, limousine, and commercial shuttle and charter bus industries. The Department of Transportation (DOT) assists with rate and fare structures, including establishing rates for the taxi stands Downtown. It is important to note that the support currently provided by DOT to the taxi industry is funded by other programs. The Airport issues Ground Transportation Permits to all ground transportation operators, including taxis, establishing specific rules and trip fees for operations on Airport property. The Airport has established a pilot program for TNCs, however no companies are participating within the pilot program at this time. Police Department Analysis Police Department staff have reviewed their processes and procedures as well as the documents provided by the Rules Committee on August 19, 2015 from the taxi industry. They were able to reduce the annual company license fees for the taxi industry by 47% starting with FY15/16 from $12,444 to $6,612 for an initial company owner license, and from $2,992 to $1,586 per year for annual company license renewals. As shown below in the response to the specific proposals from the taxi industry, the Police Department agrees with allowing the taxicab vehicle inspections to be performed by an independent third party, California Bureau of Automotive Repair, a state regulated inspection facility, saving $98 per vehicle per inspection from the renewal processes. In review of the specific taxi industry proposed changes to the San Jose Municipal Code sections related to taxi regulation the Police Department makes the following recommendations; License requirement - Should remain unchanged. 6.64,140 - Minimum number of taxicabs - No opinion on the status of this section. 6.64,150 - Restricted taxicab license - No opinion on the status of this section. a Application - Subsection (H) No opinion on the status of this section/subsection (K) Agree with the removal of Police Inspection and adding a state regulated inspection station. o License fee - Should remain unchanged from current ordinance Grounds for denial - Should remain unchanged from current ordinance Action by chief of police - Should remain unchanged from current ordinance Appeal - Should remain unchanged from current ordinance License not transferable - Should remain unchanged from current ordinance Acceptance - Should remain unchanged from current ordinance Additional vehicles - Should remain unchanged from current ordinance Substitution of vehicles - Agree with the removal of Police Inspection and adding a state regulated inspection station Fares - No opinion on the status of this section, Display of schedule of fares - No opinion on the status of this section Duty to provide services - Agree with the proposed changes.

5 September 22, Page 4 of 9 6, Direct route - No opinion on the status of this section Passenger prohibited in front seat - No opinion on the status of this section Overcharge prohibited - Agree with the proposed changes. 6,64,330 - Refusal to pay fares prohibited - Agree with the proposed changes. 6, Minimum operation - No opinion on the status of this section Equipment and conditions required - No opinion on proposed changes of this section, Identification of taxicabs - Agree with the proposed changes Safety inspection - Agree with the proposed changes and add inspection by a state regulated inspection station Report of accidents - Agree with the proposed changes. o 6, Owner's records - No opinion on proposed changes of this section Issuance prior to amendment - No opinion on proposed changes of this section, o Additional permit requirements in the airport - No opinion on proposed changes of this section Insurance requirements- Agree with the proposed changes Application- Subsection (C) of the proposed changes should not be implemented. o Photographs- Proposal should not be implemented because it would not be compatible with Permits Unit equipment Permit requirements and fingerprints - Should remain unchanged from current code section Grounds for denial - Should remain unchanged from current ordinance Temporary permit- Should remain unchanged from current ordinance Appeal - Should remain unchanged from current ordinance Information on permit- Agree with the proposed changes Termination of employment or contract- Agree with the proposed changes No opinion on the proposed changes of this section.» 6.64,590- Daily report to owner- Agree with the proposed changes- Department of Transportation Analysis of Proposed Taxicab Fare Structure Taxicab fares charged within the City of San Jose are regulated by SJMC Section , and are established by resolution by the City Council, or by the Director of Transportation per criteria outlined in the SJMC. The current taxicab fare schedule has been in place since 2008 and is as follows: Airport (point of origin! Taxi Fares $15.00 Minimum Fare * $3.00 per Mile above 3 miles $0.50 per Minute (wait time)

6 September 22,2015 Subject; Taxicab Regulation Review and Aiiport Taxicab Operations Page 5 of 9 City/Off Airport Taxi Fares $3.50 Flag Drop $3.00 per Mile $0.50 per Minute (wait time) * The $15.00 minimum taxicab fare for service originating at the Airport includes the initial 3 miles of travel, and the current $2,30 Airport Trip Fee. Other Bay Area cities have taxicab fare schedules similar to San Jose's (Santa Clara, Oakland, and San Francisco), while others cities have deregulated fares (Sunnyvale, Mountain View, and Sacramento). The documents submitted by the taxicab industry propose various changes to the SJMC relative to taxi fares. While some of the information submitted is unclear and contradictory, it appears that the proposed changes would result in the following: Fares booked via app or on-line would be deregulated, and exempt from any rates established by the SJMC, as long as the app or on-line website displays the current fare rate prior to booking. The taxicab company would be able to increase or decrease the app or on-line rates at any time. Fares for on-demand service within the City (taxi stands and Airport excluded) and prearranged seivice not booked via app or on-line (e.g., phone) could not exceed the City's established maximum rate. A taxicab company would have the option to reduce the rate below the maximum, if the reduced rate is posted on the company's website. Fares at taxi stands or as part of the Aiiport on-demand service would remain unchanged, and would not be eligible for reduction, While the industry proposed changes may increase the competitiveness of the taxicab industry within San Jose by increasing the overall number of trips available to taxicab drivers, the extent of any potential increase is not known and not feasible to predict. Similarly, it is unknown, and not feasible to predict, whether the impact to the taxicab industry would result in positive or negative changes to overall driver revenues. It is important to note that individual drivers would not necessarily have control over the rates quoted by the taxicab company for services booked via app, on-line or by phone. Although the suggested changes may have potential benefits to the taxicab industry, the following potential customer related issues should be considered and addressed: Customer confusion with regard to multiple fare structures (on-line/app fares vs. other fares, such as at taxi stands, hails, phone requests, and at the Aiiport). Customer confusion if deregulated on-line/app fares frequently change.,

7 September 22, 2015 Subject: Taxicab Regulation Review and Aiiport Taxicab Operations Page 6 of 9 Customer concerns with deregulated fares if taxicab companies increase fares above the established maximum fares. Customer concerns associated with deregulated fares if taxicab companies do not develop and utilize sophisticated software, similar to that used by TNCs. Customer confusion with regard to variation in fares between taxicab companies. Based on the above potential concerns, DOT recommends that any changes to the SJMC to provide additional rate flexibility include the following considerations and operational measures, and would need additional clarification and input from the taxicab industry: 1. Clarification is needed on specific options taxicab companies would have to reduce fares below the established maximum. 2. Clarification is needed on the parameters taxicab companies would use to potentially increase fares above current rates for service booked via app or on-line. 3. Clarification on the technology that taxicab companies and drivers would use to provide an adequate level of consumer protection for all rate setting options. For example, what level of customer protection would be provided if the taxicab meters do not visibly display real-time fare updates throughout the duration of the ride. 4. When reduced, rates for each of the fee components (flag drop, per mile, wait time); should not be negotiable. Similarly, any deregulated fare should not be negotiable. 5. Taxicab companies would need to establish a fare schedule for reduced and/or deregulated rates. 6. A total fare estimate should be provided to the customer via the app or on-line at the time of the request/booking. 7. The number of metered fare options would likely be limited by the programming capabilities of each taxicab meter, as any reduced or deregulated fares used would need to be preprogrammed into the meter. 8. Taxicab meters would need to be inspected/certified by Santa Clara County Department of Weights and Measures with each rate adjustment, or series of adjustments, at an estimated cost of $70 per taxicab. DOT is supportive of the concept of providing additional flexibility to the taxicab industry. However, it is important to note the current methodology of setting taxicab rates has been designed to be efficient and requires limited staff resources to maintain and/or change. Any changes to the current model would need to be thoroughly developed by the taxicab industry to provide clarity of the request, including operational details on implementing the various rate structures, and proposed methods of addressing the above potential customer concerns, In addition, any changes would need to have extremely limited resource requirements, as DOT has no funded resources to support the taxi industry. The minimal support that is currently provided by DOT is funded by other programs.

8 September 22, 2015 Page 7 of 9 Airport Department Analysis / Airport staff has also reviewed the staffing, processes and fee structures related to the taxis, TNCs and other GT providers at the airport. The Airport Ground Transportation (GT) permit requires the GT operators to comply with all City regulations, including those for taxis from the Police Department and Title 6 of the Municipal Code. Changes to Title 6 will not require a change to the Airport GT Permit or dispatch services agreements as all taxi companies and drivers are required to comply with any changes to these regulations. Title 25, Section 7 of the San Jose Municipal Code relates to Airport Ground Transportation providers. In reviewing the input provided by the taxi industry for Title 25 as it relates to TNCs, Staff found that five (5) of the eight (8) suggested adjustments are already included in the Airport Ground Transportation Permit or the TNC Management and Operating Plan approved by City Council on June 23, 2015, including requirements to pay all fees and fines, fully comply with the GT Permit, fingerprinting for background checks, vehicle inspections and business tax license requirements. For this reason, Staff does not feel it is necessary to further address these items to Title 25 as requested by the taxi industry. Title 6 requires taxicabs to post their taxicab driver permit in "a place conspicuous from the passenger's compartment of the taxicab." Airport staff agrees with the taxi industry proposal that the TNC drivers should also present a photo ID within their vehicle in the same manner as the taxi driver. This change can be made to the TNC Management and Operating Plan. Any further changes to ID requirements, including the taxi industry proposal that TNC photo ID be visible from outside of the vehicle, are not recommended unless also applied to the taxi industry. The taxi industry proposed restriction of TNCs from the Cell Phone Waiting Area is unnecessary. The Cell Phone Waiting Area is not on Airport property and is designated with time limit signage. While it is not actively policed by Airport staff, DOT staff randomly patrols the area as part of their enforcement routes. Many taxi, limousine and bus operators have used this area for staging prior to entry to the Airport and staff is not aware that it has caused inconvenience to others waiting for their passenger to arrive. Airport staff does not recommend restricting use of the area by any specific ground transportation industry until access by the public is compromised, at which point a ban of all commercial operators could be considered. Random drug or alcohol testing is not required by the Airport of other GT providers, beyond that which is required by the CPUC or Police Department requirements. The use of the DMV Pull Notice program is not legally available to the TNC industry as their drivers are not employees and the DMV does not permit them to enroll. On Demand Ground Transportation Dispatch Services The March 4, 2014 City Council action approved direction for use of the Modified Option 2 Model for the On-Demand Ground Transportation Services. An RFP process was conducted for dispatch services under that Model and Taxi San Jose was recommended for award of the agreement at the June 23, 2015 City Council meeting. The award action was declined and

9 September 22, Page 8 of 9 deferred until the review of the ability to 'level the playing field' was completed. Taxi San Jose's current agreement was extended to January 31, Taxi San Jose is prepared to replace and upgrade their dispatching technologies to provide efficiencies, tracking, report generation and is scalable to include mobile apps and smart phone technology. It will handle payment processing for all trip fees and can monitor rotations, dwell times and dispatching to either terminal for service. It also will provide for a dedicated radio frequency for direct and immediate contact with all drivers to allow for timely adjustments and responses to meet demands. To implement these technology improvements effectively and economically, a long term agreement needs to be completed for the dispatch services. Taxi San Jose has already reduced their monthly service fees to each permitted operator by $25 due to the changes in their fee structures based on the June 23, 2015 City Council decisions. Unless otherwise directed, Airport Staff will take steps to implement the Model direction as approved on March 4, 2014, and with this memo reconfirms the recommendation to award the dispatch services agreement for five years, with five, one-year options, to Taxi San Jose, effective as soon as practical, but no later than February 1, EVALUATION AND FOLLOW-UP Staff from the Police, Transportation and Airport Departments will continue to collaborate regarding taxi and TNC issues as they relate to each department's activities. Staff will report out to City Council through the Transportation and Environment Committee as requested. POLICY ALTERNATIVES City Council and associated committees can further consider City policy on taxicabs, TNCs and/or other transportation industries. City Council may make recommendations to the California Public Utilities Commission to enhance their regulations of TNCs or other GT providers. City Council may also decline to award the RFP to implement Modified Option 2 as indicated in staff recommendation 2.b) and instead approve a five (5) year extension of the Taxi San Jose contract thereby continuing the current Airport on-demand dispatch model, with changes to the agreement to be negotiated to incorporate entranced technology and other desired conditions. COORDINATION This memorandum has been coordinated with the City Attorney's Office.

10 September 22, 2015 Page 9 of 9 COST IMPLICATIONS Cost recovery calculations have allowed for reductions in the cost of taxi company license and renewal fees, as well as reductions by Taxi San Jose to their monthly fees to on-demand operators. Continued reviews will be conducted to maintain cost recovery and address service requirements. CEOA Not a project. File No. PP10-066(e), Services that involve no physical changes to the environment. /s/ /s/ Is/ Larry Esquivel Kimberly J. Becker Jim Ortbal Chief of Pol ice Director of Aviation Interim Director of Transportation For additional information, please contact Bob Lockhart, Deputy Director, Airport Operations at (408)