Proposal would abolish Anchorage taxi regulations

The chair of the Anchorage Assembly wants to abolish local taxi regulations, a move he said would be aimed at creating a “level playing field” between taxis and state-regulated, app-based ride-sharing companies like Uber and Lyft.

Cab and limousine companies would be able to set their own rates if the proposed ordinance, which Assembly Chair Eric Croft introduced earlier this month, took effect. The measure would also do away with permit fees and requirements like insurance, drug-testing and vehicle safety inspections.

The Assembly has passed a series of ordinances in recent years aimed at loosening what had been decades of strict regulations for taxi companies. But Croft’s proposal appears to be the most dramatic.

Croft, who reaches his term limit in April and is not running for re-election, suggested the state should provide the same light regulation for taxis as it does for Uber and Lyft. State law prevents local governments from regulating the ride-sharing companies.

Even proponents of deregulation suggested Croft’s proposal may go too far.

Former Assemblyman Bill Evans, who spearheaded a 2016 measure to eventually lift Anchorage’s cap on taxi permits, said Friday that he agreed the city shouldn’t necessarily be in the business of controlling taxi fares.

The Assembly may want to keep the city’s safety standards and insurance provisions, however, he said.

During a work session Friday, other current Assembly members appeared to agree with Evans.

“Every single little regulation, I’m sure, came from a story,” said Assemblywoman Gretchen Wehmhoff of Chugiak-Eagle River.

An official with one of the city’s two leading cab companies voiced strong objections to Croft’s measure Friday, citing safety.

“We suggest that it would be a dereliction of duty to the public for the Municipality to not inspect vehicles that will be used as public transportation,” Kim Pavy, the dispatch manager at Alaska Yellow Dispatch LLC, wrote in a letter to the Assembly.

Pavy warned of “predatory” drivers that would exploit a lack of vetting and standards.

Croft pitched his ordinance as lowering the costs of being in the cab industry and removing economic barriers, making it easier to get in. He said it had been difficult to watch the livelihood of individual taxi owners dwindle in recent years.

The proposal particularly stemmed from a 2016 state law that barred municipalities from regulating ride-sharing companies, Croft said. That tied the city’s hands, he said.

“It made it really difficult to create a level playing field between the two,” Croft said.

While essentially providing the same service as cabs, Uber, Lyft and other app-based transportation businesses have successfully argued that their drivers, who set their own schedules, are independent contractors instead of employees. State law requires background checks and basic insurance for ride-sharing drivers, but not nearly the level of fees and oversight as Anchorage demands of taxi drivers.

Limo drivers in Anchorage can’t even wear flip-flops or sweatpants, Croft pointed out in the Friday work session.

Yet city officials have grappled with how, or even if, to do anything about the differences.

In 2016, the Assembly decided to lift Anchorage’s limit on the total number of taxi permits in circulation over the course of five years. The change, which did not impact the ability of Uber or Lyft to enter the Anchorage area, meant any qualified person would be able to apply for a permit and pay a fee, creating an "open market" that has been adopted by other cities, like San Diego. The ordinance directed the city to auction 116 new permits over the next five years, and the city is now in its third year of issuing the permits.

Voters upheld the new law against a repeal challenge in spring 2017. From there, the value of permits plummeted, from $154,000 in 2014 to a few thousand dollars in 2018.

[Anchorage taxi permit owners chime in on permit increases]

Croft’s proposal would cut short the phase-in period and create an open market for cab permits immediately.

The administration of Mayor Ethan Berkowitz has not yet taken a position on Croft’s proposal, city manager Bill Falsey told the Assembly. He said officials did meet with a group of taxi drivers who voiced support for substantially reduced regulations.

Those taxi drivers argued that the market, insurance and pressure from Yelp reviews would influence fees and safety decisions, Falsey said.

Along with taking away regulations, Croft’s ordinance would ax the city’s transportation office, cutting two full-time jobs and one part-time job. The office costs more to run than it collects in permit fees, records show, and the cut would save the city $50,000 annually. The city Transportation Commission, which has had trouble in recent years recruiting members and reaching quorums, would also dissolve.

Longtime transportation inspector Eric Musser retired earlier this year and could not immediately be reached for comment. He has not yet been replaced. Falsey said the administration has been debating the future of the office.

If Anchorage abolished its regulations, cab drivers would not be covered by state law. Croft suggested the city could decide to match the state regulations for Uber and Lyft, or force the state to step in by taking away regulations altogether.

The Assembly did vote in 2018 to lower fees and relax some other regulations, while leaving the regulatory scheme in place. The sponsor of that ordinance, Assemblyman Forrest Dunbar, said he wanted to help taxis compete with Uber and Lyft.

Dunbar described Croft’s ordinance a “very large change.” He said there seemed to be a fairness issue, but it wasn’t yet clear yet that nixing local regulations was the right solution.

Assemblyman John Weddleton, who represents South Anchorage, said he attended a community council meeting this week where there was strong support for keeping taxi regulations. People wanted the option to ride in cabs with commercial insurance, where drivers had been drug-tested, Weddleton said. He said he thought it was a level playing field already.

“People make that choice. Some prefer taxis,” Weddleton said.

Croft said he expected the Assembly to debate his proposal in the coming weeks and decide if it’s too radical or not.

A broad issue is that taxi drivers want what the city can’t provide, Croft said: a return to the old days, with a cap on permits and tight regulations for all.

“I think most of them want to go back to a regulated and protected world,” Croft said. “But I keep explaining, that ain’t going to happen.”

Correction: An earlier version of this story misstated Bill Falsey’s title. He is the city manager, not the city attorney.