Indentured Servitude

This is an interesting Lens article I missed last week about the market for city cab licenses.

Because the sale of these licenses,termed Certificates of Public Necessity and Convenience (CNPCs), is controlled by private brokers, the city sees only a miniscule percentage of what is estimated to be an $8 million market in transfers. At least I take it, that's the above-the-table market anyway. Meanwhile the brokers and cab company owners charge their drivers as much as $350 per week in rental fees on their cabs leaving us with a system whose benefits accrue almost exclusively to the owners at the expense of both the drivers and the city.

The city could have retained control of the market for cab permits over the years and capitalized on their value to offset the cost of taxpayer-financed services such as libraries, parks, or policing.

“At a time when the city is looking for additional financial resources, we should explore all possible revenue streams,” City Councilman Arnie Fielkow wrote in an emailed statement.

The City Council’s Transportation Committee Chairwoman, Kristin Gisleson Palmer, went much further, although she would only address the industry generally, and not discuss specific companies.

“I believe the whole system needs to be reformed, and we’re working with the administration to do that,” she said. “This system with CPNCs being sold even though it’s technically the city’s property, the city of New Orleans has seen no economic benefit from those transfers, and I’m not sure whether all of those transfers have even been notified to the city.”

She said she wants changes that will make it easier for drivers to get a certificate.

“I think the process also creates a system where the little guy cannot afford to purchase a CPNC number, and has to lease out the use of the number,” Gisleson Palmer said. “So you have many drivers out there without benefits, medical, who are just leasing the CPNCs, and you create a system of indentured servitude.”

Update: Just wanted to add one thing here. Ann Duplessis and Ryan Berni, in this quote, illustrate everything that is wrong with New Orleans and its current administration right now.

Deputy Mayor Duplessis said the administration is reviewing the section of city law that governs cab regulation to see what changes might be made. But the review will not be complete until sometime in 2012 and even then, Duplessis isn’t sure whether the city should change.

Duplessis said one of the priorities for the overhauled department was “building a brand” for the city’s cab industry, and that opening up the market for cab certificates may, or may not, come later.

“But we’re definitely going to look at it,” Duplessis said.

One reason it is difficult to reshape the system is that private interests stand to lose a great deal of money from any reforms, and the administration has been meeting with cab companies as it looks to shape its new approach.

“There will always be people in these entrenched industries with interests at the table,” said Landrieu spokesman Ryan Berni.

Duplessis is telling us that the city's "reform" priority is a completely irrelevant style-over-substance "branding" initiative. I wonder how many marketing consultants they've hired to assist them with this. Meanwhile Berni is telling us the reason we can expect little more than ineffectual action from the city is that the people they're "meeting with" and whose interests they're going to protect are the "entrenched" brokers.