The taxicab monopoly in Little Rock remains for now after the city board denied permits to a new company last week.
Ken's Cab applied for three permits in April. Owner Kenneth Leininger started the company, after more than eight years as a driver for Little Rock Yellow Cab, in hopes of providing what he believes would be better service at a lower cost in the Little Rock area, he said.
After the city denied the requested permits, he appealed the decision to the city Board of Directors, which decided Tuesday that he would have to wait until December to compete for available taxi permits.
The city decided years ago that it would grant permits only once a year. There's no written policy stating that the board can issue permits only once a year, but it has typically done so at the end of each year, usually in December.
For 2015, the board issued 120 permits to Greater Little Rock Transportation Service, also known as Little Rock Yellow Cab. The company uses only 117 of those permits, but because it has purchased the remaining three, they aren't available for others.
The city board developed its permit process in the mid-1980s, using as a basis an ordinance in Atlanta, City Attorney Tom Carpenter said last week.
Leininger said after the board meeting that he never imagined he would meet such rejection when trying to start a business. He purchased three Toyota Prius hybrids in the spring, intending to run his cab service with low-emission vehicles that are better for the environment.
City Director At-Large Joan Adcock told Leininger that she had an issue with him already operating in the city without the necessary permits. Ken's Cab and one of its drivers were cited in May for failure to possess a city permit.
Leininger said, "It's been difficult. I put out a pretty good bit of money buying the cars and just getting them set up and everything.
"I went ahead and paid for the insurance that Little Rock requires -- which is really pretty high-dollar, expensive insurance, which I didn't have to do because I don't have permits yet -- but I wanted to show them I was serious about getting licensed."
Other board members expressed concern at Tuesday's meeting that the city's practice helps create a monopoly on taxi service in the capital city, but Carpenter assured them that such practices have been legally upheld across the nation.
"We've allowed one company to have a monopoly. Essentially, we said we don't feel we need any more because they have 117 permits and are permitted to have 120, so nobody else but that company can do business," Ward 6 City Director Doris Wright said.
But even with the concerns of Wright and others, the board voted 10-0 not to issue the three permits requested by Ken's Cab.
Little Rock's transportation code states that to get a permit, a taxi company must meet a "necessity and convenience" standard.
Fleet Services Department Director Wendell Jones determined that Ken's Cab didn't meet that standard but didn't elaborate on why.
The company meets the insurance requirements in city code, and Leininger rented a dispatch center that he said he would staff 24 hours a day, seven days a week, as required, if he were granted permits to operate.
Eugene Clifford, an attorney representing Ken's Cab, said it's evident there's a need for taxi competition.
He read a letter from one woman who said a Little Rock Yellow Cab driver she called to pick her up when her shift ended at 2 a.m. yelled at her when she rolled down the car window. Ultimately, the driver put her out on the street, according to her letter.
"What's really wrong with this is she couldn't call anybody else. There is no other taxi company in Little Rock. The citizens of Little Rock can't choose with their money who serves them," Clifford said.
"The reason we don't like monopolies is the company doesn't have to worry about the customer anymore. ... Now we have a company that can come in and do a better job, provide a better service. Why don't we let the citizens of Little Rock decide who they want to call?"
Leininger gave the board another example of why he says his company meets the "necessity and convenience" requirement. A Pakistani man visiting Arkansas called him earlier this year asking for a ride to Rose Bud, where he and associates planned to buy a plane and fly home. The man was hard to understand because of a heavy accent, but Leininger made an effort and worked out an agreement to give him a ride.
The man told Leininger that he had tried to call Yellow Cab but was hung up on, Leininger said.
Last year, 15 complaints were filed with the city about Little Rock Yellow Cab. They included complaints about overcharges, driver behavior, not receiving service, overloaded vehicles, smoke smell and being taken to the wrong destination. So far this year, the city has received four complaints.
Ellis Houston, owner of Greater Little Rock Transportation Service, owns taxicab services in other states also.
When the city board passed a set of regulations governing companies like Uber, Houston lobbied against them. He said he didn't fear the competition but thought it was unfair that those companies wouldn't have to meet the same rules as taxicab companies.
Companies like Uber -- called transportation network companies -- are now governed under state regulations in Arkansas after a law was passed earlier this year.
Houston also appeared before the board Tuesday and spoke against Ken's Cab getting permits. Again, he said he wasn't afraid of the competition but thought it would be unfair that he has to bear the cost of keeping up the maintenance on his 117 cars, when Ken's Cab wouldn't have the same expenses with a smaller operation.
Leininger noted that the burdens for small operations are high, as well.
"Here you have Uber that's this huge worldwide company, and you have Ellis Houston talking about the millions he sunk into Yellow Cab, and I'm just a local guy over here in Arkansas that's trying to have a business, and yet I've been getting shut down."
City Director At-Large Dean Kumpuris told Leininger that he should come back before the board in December when it revisits its policy and decides how many taxi permits to issue for 2016.
"My advice for you would be to beef up and come in December, when we look at this issue in totality, rather than in a vacuum.
"Right now, you are looking at three permits for only two months," Kumpuris said.
Metro on 10/25/2015