- Michelle Krupa
- Posted: 04/02/2012 7:00 AM
About a year ago, a key piece of Joseph Lange Jr.’s business skidded to a halt. A lender who for more than 40 years has offered financing to cab drivers and owners — using their city-issued taxi permits as collateral — Lange has been unable to open new loans or close settled debts since Mayor Mitch Landrieu’s administration last spring imposed a moratorium on the transfer of taxi permits.
Most frustrating, Lange said, has been his inability to help older drivers who want to sell their permits and retire. Cabbies long have treated the permits, which before the moratorium were worth a reported $65,000 on the city-regulated secondary market, as long-term investments that are relatively easy to liquidate.
“This moratorium has been an absolute disaster,” Lange said. “We’ve done hundreds and hundreds of transfers over the years, and over the course of the past year, they’ve made it almost impossible to just conduct business.”
A Landrieu spokesman last week said the stoppage aims to give the administration a chance “to better assess and audit” records of the city’s 1,600 for-hire vehicle permits, known as certificates of public necessity and convenience, or CPNCs.
It started soon after a former president of United Cabs Inc., the city’s largest taxi company, signed a sworn affidavit saying a Ground Transportation Bureau employee, Kewana Fortune, regularly accepted tips from him.
Fortune, who processed permit transfers and other taxi paperwork, resigned in June.
Many in the taxi industry, however, claim the moratorium flies in the face of city law. And some suspect the city’s real goal is to prevent transfers until the City Council passes legislation — now on the table — that would allow it to take a much larger cut of transfer fees.
Critics have complained in the past that the city takes too little money from permit transaction, given the assets’ enormous value.
During a heated City Council hearing last week, a local lawyer who represents 240 cabbies argued that current ordinances give the administration no choice but to grant transfers to parties who file the necessary paperwork and pay a fee of $150 or $350, depending on how many times the permit has changed hands.
The city code states that “the CPNC shall be transferred,” provided the requirements are met.
“This moratorium that’s been in effect for a year by the administration — unilaterally, without City Council approval — is unlawful,” attorney Daniel Davillier said.
Asked what steps the mayor took to impose the stoppage, Berni said transfers “were administratively halted.” He would not elaborate.
Davillier speculated that the moratorium was engineered to allow Landrieu to push through the council a slate of 32 changes to taxi policy, including a six-fold increase in the fee City Hall collects for permits transfers. The measure would boost the transfer fee to $2,000 or 20 percent of a permit’s negotiated sale price, whichever is greater.
“You haven’t allowed transfers for the last year in direct violation of the existing ordinances in the city, and now you want to charge a 20 percent fee for any transfers once they’re allowed,” Davillier said. “It almost looks like there’s some intent for the city to take money from these folks that own these.”
Berni declined to address the claim directly.
“The city is now engaged in reforming the entire ground transportation industry, including the transfer process,” he said via email. “We plan to allow transfers to resume in the coming months.”
City Hall last year processed just 21 CPNC transfers, compared with 148 in 2010, and 159 the previous year, Berni said. None have been completed in 2012.
The city in 2009 and 2010 collected an average of between $23,100 and $53,900 per year from CPNC transfers. Under the proposed fee structure, the same volume of business would net City Hall at least $308,000 annually.
Michael Tifft, a former deputy city attorney and director of the council’s utilities regulatory office, agreed with Davillier that because the moratorium wasn’t authorized by the City Council, “then I think these people are being messed around with.”
Lange said he hopes the moratorium is lifted soon so he can resume making loans to fledgling drivers and owners, who often use the money to pay off their first cab.
“We’ve helped hundreds and hundreds of people become individual business owners over the years,” he said, “and that’s what I want to keep doing.”
Though the council could take up the package of draft ordinances as soon as Thursday, Councilwoman Kristin Gisleson Palmer, the proposals’ sponsor, said at the close of the committee meeting that she may delay the votes to give the parties more time to review them.
Other proposed changes include mandates that cabs have on-board credit card machines, global-positioning equipment and surveillance cameras, and that taxis more than 10 years old be banned, with the maximum age dropping to seven years in 2014.
Landrieu has said the changes are needed to improve a critical component of tourists’ and business travelers’ experience in New Orleans. City officials say the changes would cost about $2,000 per vehicle, but drivers and owners say the expenses would be closer to $20,000.
Michelle Krupa can be reached at firstname.lastname@example.org or 504.826.3312.