By Jonathan Friedman
Lookout Staff

November 11, 2010 -- Five taxi companies were approved for local franchises on Tuesday at a four-hour City Council hearing. The franchise system, which was created to reduce the high number of cabs in Santa Monica along with the pollution and other problems it creates, will go into effect in January. Those not selected for franchises said this would mean jobs losses and company bankruptcy. Some people alleged racial discrimination in the decision because no Armenian-owned or operated companies were chosen.

The five companies approved for franchises-- Metro Cab Co. , Yellow Cab, Independent Cab Co., Bell Cab and TMAT Corp.-- were recommended by City staff following a lengthy selection process. They will each be allowed 50 vehicles. The franchise ordinance approved last year set the maximum number of cabs in the city at 250, although some council members said they were interested in adjusting that number.

“Overall, this has been a very positive, fair and equitable process and I truly regret that not everyone was able to prevail and get a franchise,” Council member Richard Bloom said. “But I think this is a very … positive step for our city.”

The 250 figure was based on a 2008 study from Nelson\Nygaard Consulting Associates that recommended 200 to 300 cabs. Council members said on Tuesday they wanted to increase the number because one of the companies awarded a franchise--Taxi, Taxi--has 59 cabs currently operating in Santa Monica, and might have to lay off workers to comply with the new regulation.

“While I applaud the equity of 50-50-50, it doesn’t feel like equity to me to tell one company ‘you have to reduce the size of your business’ and tell four other companies that ‘at least within the borders of Santa Monica, you get to increase your business,’” Council member Gleam Davis said.

The council debated at length whether to redistribute the number of cabs per company or to increase the total number of vehicles allowed. The council eventually settled on recommending staff draft language that will be presented at a meeting next month about increasing the total allowed in Santa Monica to 300, and granting the right for 10 extra cabs per franchise.

The council heard from many people who were associated with companies not awarded franchises. Ellen Poghosyan, president of VIP Yellow Cab, noted that three of the five companies selected were not local.

“The outside companies, they don’t have to lose anything [if they were not selected for franchises],” Poghosyan said. “They have already their L.A. jobs. But local companies, they are losing their jobs completely.”

Serouj Aprahamian, the executive director of the Armenian Youth Federation, and Armenian activist attorney Nora Hovsepian made allegations of possible racial discrimination. They said six of the applicants were Armenian-owned or operated companies, and none was selected for a franchise.

“It seems unlikely that the complete exclusion of the five Armenian companies out of the 13 applicants was a mere coincidence,” Hovsepian said. “Instead of rewarding these companies for their years of service in Santa Monica, they are being punished.”

Bloom was the only council member to address the racial discrimination allegation. Responding to that and the accusation that the selection process was flawed in general, Bloom said, “I haven’t found significant evidence of any of those things with the exception… maybe more information [should have been revealed] during the course of the process at certain junctures.”