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Nope, They Weren't Listening -- Phoenix City Council Approves Cab Contracts

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Yesterday, we pointed out errors, ommissions, and outright deceit in one of the proposals for cab service at Sky Harbor International Airport. We asked if City Council members were listening.

After today's council meeting, we have our answer. They weren't.

Now, technically, the council did pay lipservice to some of the issues we raised, asking city staffers to give explanations for what we reported. But when it came to satisfying skeptics (like us) who bother to actually look into this stuff, the answers they got were far short of illuminating.

Yet the council still voted to approve the new contracts with Visum Investments, Apache Taxi, and AAA Cab -- and members did it unanimously.

Think we're exxagerating?

Okay, here's what we wrote yesterday:

 The city has mandated that any company seeking the contract must have a general manager with three years' experience managing a fleet of at least twenty vehicles.

To meet that requirement, Visum's proposal states that its team includes Hassan Abdell, currently the general manager of Cultous Medical Transportation in Tempe. Abdell's resume says he's worked as the general manager of that company for five years.

But Cultous Transportation, oddly, has only been in business for one year, according to the Arizona Secretary of State. The company filed its articles of incorporation in September 2008.

Seems cut-and-dried, right?

But when Phoenix Mayor Phil Gordon questioned an aviation staffer, Carl Newman, about our findings, Newman concurred that, yes, the company only incorporated one year ago.

But, he added, "We've double-checked. They've been in business for five years. [Hassan Abdell's] been with them all five. We're very certain that everything's in order as far as that's concerned."

Huh? So was Cultous working under the table for four of its five years of existence? How was it doing business when it wasn't legally allowed to do business?

But no one asked a follow-up question.

And then there's this. Councilman Michael Johnson asked Newman about whether the city could require, in the cab companies' contracts, that they not increase the per-day rate charged to drivers as a way of paying for the much-higher per-cab fee the winning bidders have promised to the city.

"Our advice from legal staff," Newman explained, "is don't get so entrenched in the company's business that we're setting rates for them. Let's let the market work. They need drivers more than drivers need them -- that will keep rates reasonably low."

But, as we've reported (and numerous cabbies seconded in their remarks to the city), under the new contracts, the "market" won't be allowed to work. Thanks to the quirks of bidding on this one, one company, AAA Cab, has just been given sole rights to 140 of 180 cabs at the airport.

Unfortunately for the cabbies, that means they have very few opportunities to go elsewhere if AAA raises its fees. Despite what Newman says, this isn't a free-market situation. Under the new contracts, longtime drivers at the airport need AAA Cab a helluva lot more than AAA needs them.

The one good thing the council did today is stress that if any major changes are made to the contract, they must go through them and not just staff. Councilman Johnson insisted that the companies will need to check in at a subcommittee meeting in one year, as well, in case any problems develop.

But that's hardly enough considering all the questions we've raised. (See our latest blog post, from earlier today, as well as our column from last week.) These contracts just don't seem feasible to anyone in the business. As we reported yesterday, even the two winning bidders told the city they don't see how they can make a profit with such high per-cab rates and only 20 cabs in their allotment.

Ah well. We reported all that already, and the city made its decision, anyway. We'll respect that.

We'll just plan to remind everyone that we told them so when things fall apart.

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