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Duluth’s saturated taxicab industry forces a decision

In an over-the-shoulder interview from the driver's seat of a taxicab, driver Marlon Bailey is quick to turn his head and point out his company's five-star rating with the Yellow Pages. The users' glowing comments that accompany the rating would ...

Line of taxis
A line of five taxis representing four different companies waits at the Duluth International Airport on Friday morning hoping to pick up passengers from arriving flights. There are 29 taxi companies registered with Duluth. (Bob King / rking@duluthnews.com)

In an over-the-shoulder interview from the driver’s seat of a taxicab, driver Marlon Bailey is quick to turn his head and point out his company’s five-star rating with the Yellow Pages. The users’ glowing comments that accompany the rating would seem to support his service as legit.  
As the owner of Airport & Duluth Taxi and a cab driver himself, Bailey said he’s worked hard to develop his niche in the local taxicab industry. Ninety-five percent of his business is serving the local airport, and mostly its business travelers. He charges $17 from touchdown to downtown. Others, he said, charge up to $27.   
He preaches “no accidents, no complaints” to his small group of drivers, a few of them former U.S. armed servicemen like himself. At 59, he’s more than 15 years into a career that followed his previous one as a finishing carpenter.
For Bailey, there’s a professionalism to taxicab driving that’s important. It helped build his credibility, which he puts to use. When he emails Mayor Don Ness, he gets a reply. When he needed help securing the gold Ford Police Interceptor he uses for work, former Duluth police officer Richard Jouppi fronted the cash with a no-interest loan.
“He’s human,” Bailey said of the officer who lost his job last year following a highly publicized use-of-force case.
What upsets Bailey is a taxicab industry he and others say has lost its way in Duluth. They lament City Council decisions earlier this century that served to deregulate the scene. A city that once capped its taxicab licenses at 35 is now home to roughly 150 cabs with 29 companies registering fares with the city clerk. Fares that were once uniform are now wildly divergent.
“They ruined it,” Bailey said.
People within the industry say there are fly-by-night outfits that operate without ever registering with the city. Companies are left to decide whether to submit background checks because the city doesn’t require it. One man charged with burglarizing homes as a newspaper carrier in 2011, Michael Dean Peters, later found work as a taxicab driver and continued to burglarize the homes of his departing airport customers in 2012 while he awaited trial and a subsequent prison sentencing.
The city affords one police officer to inspect the taxicabs twice annually. The officer mostly checks that the meters are calibrated for honesty, said Bailey and others. Only taxicabs 10 years or older require annual inspection from a certified mechanic.
“They gotta do something; it’s already impacting service,” Bailey said. “Cabs are uglier and broken down. I predict an accident on the high bridge with a bunch of college kids and a tire falls off.”
Over the bridge
In Duluth, city code for taxicabs is eight-and-a-half printed pages - all relatively toothless in the face of an industry grown wild, Bailey and other taxicab drivers/owners attest.
“I want it to become a business again - not people doing what they feel like any given day or night,” said 80-year-old Dennis Mitchell.
Mitchell is the longtime owner of Yellow Cab of Duluth, which operates full time in a world in which he said there are several outfits that cherry-pick customers by working only during premium hours and for big events like Grandma’s Marathon.
“They only come out when it’s gravy time,” he said.
One need look no further than Superior to see an industry that would seem to have its house in order. There are three taxicab companies registered with the Superior city clerk. In addition to a $150 annual taxicab license that Duluth also requires, Superior conducts background checks on drivers and requires them to hold a separate taxicab driver’s license for $25 annually. The city requires its companies to hold $500,000 in liability insurance compared to Duluth’s $100,000. The state of Wisconsin also won’t allow drivers to lease cars from taxicab companies. Rather, its drivers are employees of the companies for which they work and are afforded protections like workers’ compensation and a vested Social Security retirement.
Still, Superior’s regulation of the industry doesn’t prevent it from competing on an unlevel playing field with Duluth.
“Duluth cabs are allowed to bring customers to Superior and drop them off,” said Linda Cadotte, owner of Superior’s Courtesy Cab. “They’re not allowed to pick up, but of course it happens. They’re over here operating all the time. It’s been going on for years and it’s difficult for police to enforce.”
Cadotte outlined the perils of having so much competition: The pie gets cut in smaller and smaller pieces, she said, so when vehicles need to be replaced or repaired the money might not be there. Maintenance gets pushed. Replacements never come. Fleets get older and risks get higher.
Also, good drivers have become hard to find. She’s got 10 “really good employees,” many of whom have more than 10 years experience with her company. But she’s struggling to replace one driver, now with cancer, because problems with the law have left 2 out of every 3 applicants ineligible, she said.  
Cadotte, though, said she’s proud of her company’s ability to survive and conflicted about what to do with an overgrown marketplace.
“As far as the industry goes it’s better to have it capped,” she said. “But this is America; this is free enterprise.”
The numbers and the need
The notion of having about 150 taxicabs for a city of 86,000 people seems like folly to Mitchell and others in the industry. That ratio of 1 taxicab for every 573 people in Duluth is greater than the taxicab capital of the world: New York City, where there are roughly 14,000 taxicabs for 8.4 million people, or 1 for every 600 people.
“We aren’t big enough for 100 cabs,” Mitchell said.
How Duluth got there is a narrative straight out of “The Music Man.” In 2002, a one-time Duluth cabbie sold members of the City Council on the need to lift the cap on its 35 taxicab licenses. People wanted choice, better customer service, pride and honesty, he told the council. Mitchell and others established within the industry rallied and tried to convince the councilors otherwise. Mitchell was quoted in the News Tribune in 2002 as warning the council, “Flooding the city with permits will have a bad effect on the city.”
The music man’s pitch for his new company won out. He promised a $45,000 investment in the company and gallant red, white and blue taxicabs. The council bit.   
“He spray painted them with cans of paint from Walmart,” Cadotte said. “It was pathetic. It lasted about three years. You could find $500 red, white and blue vans in every junkyard in town when he fell apart. But he really changed the whole scenario.”
What hasn’t changed, though, is the need for taxicabs in the city, perhaps now more than ever.
“These are private companies but this is public transportation,” said City Councilor Sharla Gardner. “A lot of people who use them are those who cannot afford (both) to maintain a car and afford a place to live. Those folks use cabs to go to the grocery store.”
In addition to people with low incomes and business travelers, taxicabs serve many workers in the shipping industry. George Parker found his niche transporting people who are out partying at bars. He can name which bars will have lines of taxicabs outside their doors on any given night - “Thursday night Grandma’s up bar, Fridays Ace’s and Dubh Linns, Wednesdays the Rex in Fitger’s building, Tuesdays the Reef …,” he said. The University of Minnesota Duluth and the Tavern League of Wisconsin both provide vouchers to taxicab companies that transport people who would be at risk of driving home drunk.
Parker, owner of George’s Taxi, owns a single Ford Expedition that he uses to set himself apart for its ability to carry more people and avoid getting stuck in winter.  
“Six days a week there are college nights at one bar or another,” Parker said. “It can be competitive. Each cab has to find their own customer base. I did mine with being a truck. That’s made a difference. Not every cab takes credit cards, but I do. That makes a difference, too.”
Solutions on the horizon
To its credit, the current City Council and mayor’s office aren’t ignoring the critical mass evident in the taxicab industry. Change is afoot. Gardner said she will be ready to move with an ordinance in a couple of months. She’s now gathering information and doesn’t like everything she hears.
“I am looking at doing an ordinance that changes some of the standards,” she said. “Some of the cabs are a little less than presentable. There have been a lot of complaints.”
Some taxicabs, she said, smell like they’ve been smoked in. Some people are asking for the local industry to be more handicapped accessible.
“A lot of times it’s people’s first impression of Duluth,” she said of stepping into a taxicab.
Ness, who did not favor deregulation when he was a councilor earlier this century, is said to be listening to taxicab owners and, together with Gardner and Police Chief Gordon Ramsay, has asked the city attorney’s office to investigate standards and practices in other cities.
Mitchell would prefer standardizing fares, making all taxicabs be inspected by a certified mechanic annually and forcing each company to have a distinct color scheme.
“It IDs your company,” said the Yellow Cab of Duluth owner. “The customers would know what they’re getting into.”
Bailey, too, prefers a return to more regulation. Even though he benefitted by opening his own company seven years ago, the industry’s loss of standards stings everybody, he said.
“I’m still against it,” he said. “There are a lot of people who shouldn’t be driving cab that are. Poor service indirectly hurts the whole industry.”

Related Topics: TRANSPORTATION
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