Mailbag: Residents owed answer on taxis

This paper’s Oct. 31 editorial, “Council did no one any favors,” questioned, quite properly in my view, whether the City Council acted in the public interest in refusing to grant a taxi license to a new applicant.

The editorial has now been questioned in the Nov. 2 Community Commentary, “Decision on taxis was pure common sense,” by Jim Weling, a former chairman of the Transportation & Parking Commission. Weling presented several arguments, among them that there is overcapacity in the taxi cabs that serve Glendale and that there is apparent separate ownership of four of the five taxi companies that now serve Glendale.

In particular, Weling stated that during his service on the commission “there were separate individuals who represented themselves as the owners of [the various firms].”

Evidence has now been presented to the commission and the City Council that four of the five firms (and perhaps the fifth as well) are owned by the same interests. The circumstance that the firms were represented before the commission by persons who presented themselves as separate owners means little — interlocking corporate ownership is common among firms, and firms that are involved in interlocking relationships have a strong incentive to downplay or conceal common ownership.

The answer to the question of who owns the taxi cab firms can be determined and must be known by the regulatory body charged with protecting the interests of Glendale citizens. If the answer to this question is not already known, it is startling to me that the commission has not launched its own investigation to determine the answer.

In 1890, Congress enacted the Sherman Antitrust Act. It’s purpose was to preserve and protect competition as the best way to ensure that powerful economic interests did not exploit their power to the disadvantage of ordinary citizens. If four of the five Glendale taxi firms (perhaps the fifth as well) are owned by the same interest, that has fundamental implications for competition in taxis that serve Glendale.

Monopoly results in less efficient operations and higher prices. When a firm enjoys monopoly power, it tends to spend its money to preserve that monopoly, perhaps by making campaign contributions to elected officials who have the power to restore competition.