“Backroom” Deal Drives Cabbies to Protest

Los Angeles Taxi Workers Alliance denounced the awarding of a contract without public hearings

Nearly 150 cabbies circled City Hall today to protest what they called a “backroom” deal to award a consultant a $250,000 contract to help develop a new system regulating the taxi business in Los Angeles.

The slow parade of yellow, green and red-white-and-blue cabs snarled traffic around City Hall for about half an hour. The cacophony of honking horns and chanting voices could be heard over several blocks.

Hamid Khan of the Los Angeles Taxi Workers Alliance denounced the awarding of the contract to Nelson-Nygaard Consulting Associates without public hearings, claiming it was the same company that laid the groundwork for the current taxi franchising system that he called “modern sharecropping, a sweatshop on wheels and franchise slavery.”

He said Nelson-Nygard's team leader, Will Rodman, was listed as an “on-call resource” for the Taxi, Limousine and Paratransit Association, whose vice president is William Rouse, general manager of the Yellow Cab company.

That raises questions about Rodman's integrity, fairness and objectivity, Khan said.

Calls to Nelson-Nygaard were not immediately returned.

After the protest, Khan and several other officials with the alliance went to the mayor's office to deliver a letter demanding that the contract be rescinded.


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They also called on the city to issue medallions -- a permit to operate a taxicab in the city -- only to full-time taxi workers, not to investors who do not drive a taxi cab for a living.

They claimed it would “liberate taxi workers from the current stranglehold and threat of loss of company sponsorship ... and help drivers obtain non-predatory financing using the medallions as collateral.”

An official with the mayor's office. who asked not to be identified. told City News Service, “It's not clear the contract would be rescinded, because legally, it's still a viable contract.”

He added, however, that the contract would likely be presented to the City Council for review in response to complaints that the process of awarding it lacked transparency.

Khan said the appointment of the consultant was crucial to developing an improved system for regulating taxis once the current system expires on Dec. 31, 2010.

Of the 2,303 legitimate cabs operating within the city, nearly 70 percent are owned by companies that lease them to drivers for $350 to $700 a week.

“What that means is a cab driver has to work 35 to 50 hours a week before he puts a penny in his or her own pocket,” said Gray Palmer of the alliance.

“We have to pay for our jobs,” he said. “Anything we make over that is our income. If we were employees, that would be illegal, but we are independent contractors.”

A 2007 UCLA study criticized the current system, noting cab drivers often work average of 72 hours per week anf earn a median rate of $8.39 per hour.

According to the study, “the city regulates in great detail many aspects of the industry,” including the color of socks that drivers must wear, but “does a poor job of protecting taxi workers from exploitation by their companies.”

“... The current system of taxi cooperatives is rife with opportunities for simple corruption and sharp practices that disadvantage drivers,” the study said.

An audit by then-City Controller Laura Chick in 2007 also criticized corruption in the system.

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