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Judge Upholds San Diego’s Decision To Eliminate Cap On Taxi Permits

Photo caption:

Photo credit: Flickr / Leandro Neumann Ciuffo

A taxi is shown driving through the Gaslamp Quarter in this undated photo.

The city of San Diego's decision last year to eliminate a lid on the number of taxi cab permits issued by the Metropolitan Transit System was upheld Wednesday by a Superior Court judge.

A group of permit-holders called the San Diego Transportation Association sued, claiming the City Council's approval was arbitrary, capricious, an abuse of discretion, and in violation of the state's environmental quality law.

According to the City Attorney's Office, Judge Gregory Pollack ruled in favor of the city and MTS, which issues the permits on the city's behalf.

Supporters of the action said the cap of 993 permits, issued on behalf of the city by the Metropolitan Transit System for a $3,000 fee, created a limited supply that resulted in an underground market.

The permits fetched up to $140,000 in some cases, and buyers passed along costs to drivers, who had to work long hours at low pay as a result.

The owners argued that getting rid of the cap would flood the market with new cabbies, lowering revenue for all permit-holders and drivers.

Since the cap was lifted, 101 new permits have been issued, according to the City Attorney's Office.

"We've had a situation in place for 30 years that was a monopoly and consumers didn't benefit from it," said Councilwoman Marti Emerald, the primary supporter of eliminating the cap.

"This is an opportunity for these drivers to own their own businesses and support their families, which will be good for the economy and good for the people of our city," said Emerald, a former cabbie.

In his ruling, the judge noted the long number of hearings and reviews the proposal underwent before it was approved.

"Drivers will be able to work hard and become owners and everyone will benefit from increased competition," said City Attorney Jan Goldsmith, also an ex-cab driver. "It is particularly nice to be a part of removing this unnecessary over-regulation and freeing drivers to pursue the American dream."

The City Council action, just over one year ago, also limited the age of taxicabs to 10 years, prohibited the use of vehicles with salvage titles as taxis, reduced a requirement that a prospective permit holder have five years of driving or management experience to six months, and clarified language regarding citizenship and legal U.S. residency.

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