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Open topic: Changing cabs

Photo by Brent Holmes

A recent audit recommending the end of the Taxicab Authority shouldn’t have surprised anyone. But will it do any good in the long haul?

Surprised by the brutal, slice-and-dice audit of the Nevada Taxicab Authority issued earlier this year by the governor’s office? If you can read or watch TV, you should have seen this coming. The writing has been scrawled all over the wall in large, blood-red letters for decades.

Few government documents have ever been as blunt or as blistering: Written by the governor’s Executive Audit Committee, it stopped just short of characterizing the Taxicab Authority as a totally corrupt shill for the industry it supposedly regulates. The auditors did suggest that the Taxi Authority be abolished altogether. Governor Brian Sandoval remarked that he couldn’t recall ever reading an audit this critical.

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No one should be surprised. The general public, including most taxi drivers and dozens of current and former employees of the Taxicab Authority, concluded years ago that the TA is a ball of lint in the pocket of the taxi companies. The audit alleged that TA has allowed the taxi barons to systematically fleece tourists and locals alike in several heavy-handed ways — including a $3 charge to use credit cards and a 20-cent per mile fuel surcharge imposed at a time when fuel costs had been dropping for months. Auditors estimated the public had been ripped off to the tune of $47 million in just one year.

The audit could just as easily have offered a laundry list of other transgressions and failures on the part of the Taxicab Authority, issues that have been widely reported in news stories but which have been largely ignored by the governor, Legislature and the appointed board that oversees the TA. A notable example of this failure to pay attention was the resignation letter submitted in September 2014 by Charles Harvey, who was appointed by Sandoval in 2011 to clean up the TA by serving as its chief administrator.

In his letter, the well-regarded Harvey said the environment of the Taxi Authority was “a challenge to (his) integrity, honesty and professionalism.” He set out to create a model regulatory agency but ran face-first into “levels of dysfunction” that he characterized as indescribable, a “culture within the agency that does not value accountability, professionalism or customer service.” Harvey said he repeatedly sought the help of his bosses at the Department of Business and Industry, at the attorney general’s office and from the TA’s board, but found himself alone and isolated. So he quit.

You might think a letter that powerful would generate major interest among journalists, lawmakers and regulators, but it made the tiniest splash. It was one of several dozens of stories I’ve written about failures within the TA and, like most of the others, it was ignored. The oldest story I remember writing was in 1986, back when local restaurants began paying bounties to cab drivers for delivering passengers to certain supper clubs. The Taxi Authority knew about it but did nothing. The problem festered, then exploded over the next 20 years, in particular when strip clubs began paying up to $100 per passenger. Cab drivers went nuts. They diverted passengers from their requested destinations, told outrageous lies about competitors’ businesses — and again the TA did little to stop it. The companies were making money, and so were the drivers.

There have always been cabbies who would pad their fares by taking the longest possible routes, but it reached new heights in Las Vegas. I remember sitting at McCarran Airport, counting the cabs that chose to head south, into the tunnel, to get passengers to Strip hotels. That added $8-10 per trip to the fare. From 2009-2012, our news team at KLAS Channel 8 documented rampant long-hauling by local drivers. More than half took the tunnel out of the airport, and in the dozens of undercover test rides we took, not a single driver ever followed the law by asking the passenger if it would be okay to take the longer route. We aired news stories about the ongoing rip-off, but the TA ignored the issue for years. TA enforcement officers told us they had been ordered to ignore long-hauling. When they tried to write citations, they said, the tickets were torn up by supervisors, who were suspected of having cozy relationships with deep-pocketed taxi companies. The officers who complained were disciplined or fired.

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Here’s the most damning evidence of all. When the allegations about widespread long-hauling and inept enforcement finally got the attention of state auditors — who estimated the scheme cost the public nearly $15 million per year — it was the taxi industry itself that came to the rescue. Executives from some of the big taxi firms defended the TA in public, held news conferences, demanded apologies on behalf of their much-maligned drivers. Not surprisingly, the industry has come to the defense of the TA in response to the most recent audit.

Dozens of drivers have told me over the years that they hate to long-haul, but that their bosses ordered them to do so, directly or indirectly. Eventually, one of those supervisors for a major taxi company filed a lawsuit alleging that he had been ordered to encourage long-hauling by his drivers. Charles Harvey made long-hauling one of his top priorities when he took the job at TA. He staged high-profile enforcement events, made a big splash, but eventually, that effort ran out of gas, and so did Harvey.

When the industry that is supposedly being regulated comes to the defense of the regulators, something is not right. If the TA was doing its job, the companies should be squawking. Instead, the TA bends over backwards to give the taxi firms whatever they want, including more cabs on the streets, surcharges for fuel and a wide berth when it comes to long-hauling. The taxi industry spread a lot of money around, not only in the form of gifts to regulators, but also the maximum campaign contributions to elected officials who may have any influence over the industry, including the governor.

What’s likely to happen? State lawmakers are now taking a look at the audit. It would require legislation to abolish the TA. Not surprisingly, the TA board rejected the audit’s findings and has authorized a counter audit. What are the chances it will come up with different conclusions? The idea to eliminate the TA altogether is certainly justified, and one plan is to put the taxi industry under the auspices of the state’s Transportation Authority, which already oversees limos and taxis outside of Clark County. That plan has a lot of merit, but don’t be surprised if it gets scuttled or buried in the coming months. The taxicab barons have deep pockets.