State laws governing taxi cabs are under fire at the state level. Current regulations have been debated for years in what seems to be the never ending argument of oversight.
The issue has been seen locally in Grand Junction. K2 Taxi, a brand new taxi service in town, struggled for years to break what was a monopoly. Because of current regulations, their license application from 2008 was not approved until early this year.
Because taxis are considered a public utility, hearings need to be held for any new applicants. In Grand Junction's case, K2 applied and was appealed by the only other service in town, Sunshine Taxi. State law actually allows a company to challenge a competitor based on the public demand for the service.
In communities with less than 70,000 people, it's called a 'regulated monopoly.' New applicants must show that there is a need for an additional service, and that the current company isn't cutting it.
In communities like Grand Junction with more than 70,000 people, it's called a 'regulated competition.' New companies must show first that they are financially fit before showing that there is a public need. If that is established, the burden of proof shifts to already existing companies who have a chance to show that a new service would not benefit the community.
"There are efficiencies in having a regulated monopoly sort-of theme," Terry Bote with Colorado's Public Utility Commission explained. "You wouldn't want 10 different electric companies out there stringing wires and building their own power plants and those kinds of things."
To keep things in order, the state can restrict certain companies. Regarding K2, the Commission wanted to take a more focused approach. The new cab service can only pick people up inside city limits and drop off in Mesa County. And, they can only have five cars.
Meanwhile, Sunshine Taxi operates with no vehicle number restriction and can pick up in Mesa County and deliver everywhere but Telluride city limits and Rout, Gunnison, Eagle, Denver, San Juan, and Archuleta counties. Currently, they have 12 operational taxis.
These provisions separate the taxi business from free enterprise and many legislators have a problem with that. "The legislature has looked at this issue of entry standards for cabs several times over the last 10 years," Bote said. "They've looked at what is the best regulatory structure, what would be the best way to regulate this market if at all."
With the current taxi laws on the books, it is awfully hard for new companies to prove their worth. Locally, many prospective businesses have been stopped dead in their tracks over the past few years.
The Public Utilities Commission explained to us that they do not make the laws, they just enforce them. And, they will continue to do so until something changes.
K2 Taxi's owner, Kevan Kohlman, is in favor of lighter restrictions. He is also looking forward to more taxi companies in the area. "The more companies we have, the greater the customer service," he said. "And if more people are satisfied with Grand Junction's taxi service, that means more business for me."
Kohlman says he plans to document calls for service outside of his area so he can appeal the conditions placed on his company.
Sunshine Taxi declined to comment on this story.