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Taxicab controversy: PUC allows 300 new cabs after rejecting Mile High Cabs' request for 150

Our November feature "Mean Streets" focused on the lengthy and fruitless attempts of local taxi drivers to start Mile High Cab. Last August, PUC judge Paul Gomez rejected Mile High's application because he deemed the Denver taxi market was at or near capacity. Now, however, he's approved 300 new Denver cabs -- including 150 for Yellow Cab, a large and powerful local company that has long argued Denver doesn't need any more taxis.

"My take is, it's absurd, indefensible, and the cab drivers think it's corrupt," says Tom Russell, lawyer for the drivers attempting to start Mile High Cab. "It doesn't make a bit of sense to me." His clients claim the Denver taxi market is controlled by a few very powerful companies who can charge drivers whatever they like because the PUC refuses to let in new competition. Some of his clients, in a lawsuit filed last summer, also claimed that they also suffered abuse and discrimination at the hands of Yellow Cab managers; those concerns are being dealt with through arbitration.

Gomez, in a long-delayed decision last August, rejected a proposal by Russell's clients to start a company for themselves -- a rejection that the PUC commissioners supported. While Gomez found Mile High Cab financially fit to operate, he argued in his decision that Mile High's proposed 150 cabs would prove to be destructive to the existing cab carriers -- Yellow Cab, Metro Taxi, Freedom Cabs and Union Taxi -- because the market couldn't handle more taxis.

But now, he's decided otherwise for two other taxicab applications: a new company called Liberty Taxi, as well as Colorado Cab, a division of Yellow Cab, which currently has 300 taxis on Denver's streets -- and could get 150 more. As he noted in his decision,

"[The Mile High Cab rejection] relied on driver testimony as to overcrowding, that was due to the significant and substantial expert testimony that supported those anecdotal statements. That is not the case here. No expert testimony was provided regarding the public interest standard. Therefore, since each case stands on its own merits, such anecdotal evidence is difficult to accept here without supporting expert testimony or studies... [I do] not find it a necessary outcome that high customer volume areas such as downtown and Cherry Creek will suffer additional overcrowding by granting both applications."

Russell is especially perplexed because Yellow Cab has long opposed Mile High and other upstarts on the premise that Denver's taxi market is saturated. Brad Whittle, president of Colorado Cab, recently testified along those lines to the Colorado legislature as part of his opposition to a bill introduced by Senator Ted Harvey that would have loosened taxi regulations. That bill has since been voted down.

And in response to Westword queries last fall, Ruth Otte, executive vice president of marketing and communications for Veolia Transportation, the giant multinational transportation firm that owns Yellow Cab, penned a three-page response detailing the company's concerns about too many taxis in Denver. As she noted, there is an "over-supply of taxis in the Denver Metro market resulting in a depressive effect on taxi operator earnings and a number of other unintended consequences."

Later, when asked why Yellow itself was trying to expand by 150 cabs, she added, "The fact is that we do not necessarily believe the market needs or can support more permits, particularly not in the near term. But at the same time, if permits are being given out, we felt that to be competitive, we needed to apply."

As it turns out, that ended up being a good move for Yellow. But one question remains: Is Yellow Cab still worried about an over-supply of taxis in Denver?

More from our Follow That Story archive: "Michael Hancock donations from Metro Taxi payback for opposing Mile High Cab?" Follow Joel Warner on Twitter @joelmwarner