There are a limited number of taxi licenses.
Municipalities sell them and imposed an ongoing tax on what riders pay.
As you might imagine, I read newspapers when we go on vacation. While we were in South Dakota talking a look at the Corn Palace, I found the article below:
The front page article in Michell, South Dakota’s Daily Republic newspaper about cracking down on a woman driving people places and accepting money for gas caught my eye.
A Good Samaritan named Becky Handrahan was giving rides to people and, gasp, accepting donations for gas.
The Mitchell city council wasn’t getting any tax on the rides and wanted it.
The lady did not apply for a taxi license because she doing “informal favors” for people, not conducting a business.
Public Safety Chief Lyndon Overweg said licensing was for “protection of the public.”
And, not only did the city want its $50 taxi licensing fee, but $50 for doing an inspection of the car each year. Mitchell also had a 2% sales tax.
The state was interested in lost revenue, too. Director of Revenue Jane Page pointed out in the article that the woman was paying no state sales tax (4%) as did the 68 licensed taxis and limos.
“We’re always looking out for people who don’t have a taxi license,” she said.
This brought memories of how I had a bill drafted for conservative Republican legislators about 1990 to allow jitney cabs to operate.
Jitneys operated illegally in Chicago along routes not served well by licensed taxis.
Having the same concern for safety as the Mitchell police chief, the bill required the person to undergo a background check, have insurance and a safe vehicle.
We figured it would be a way for people with a decent car to make some honest money.
Needless to say the taxi cab owners made sure the bill did not see the light of day. (Mike Madigan was House Speaker.)
Now comes a new idea that reminds me of jitneys.
On October 2, 2013, the Chicago Sun-Times ran an article about what seems to be a new variation on the jitney idea.
It was featured in the Chicago Sun-Times last month.
Companies are offering ridesharing with the driving getting a cut.
The companies are Sidecar, UberX and Lyft.
Sidecar and Lyft have a suggested donation model, but people can give as much as they want. At Lyft, drivers keep 80% of what’s paid.
UberX has a fare schedule that is about 20% less than taxicab fares.
All payments are made over the internet.
People report making upwards of $30 an hour.