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September 15, 2009

Should hacks be busted, regulated or ignored?

Great story by Laura Vozzella on Baltimore's thriving hack industry. Hacks routinely carry residents of Baltimore's poorer neighborhoods to faraway supermarkets, where the clients can buy a wide variety of foods at decent prices. The piece is a good case study on the demerits and benefits of regulation.

If you carry passengers in your car for a fee, Baltimore, like most cities, requires you to have a taxi license. Hacks don't. They're operating illegally. But they're providing an obviously popular and important service -- ferrying people to otherwise inaccessible grocery stores at fares that are probably much lower than what licensed cabs would charge.

Should the city crack down on hacks? Vozzella notes that they can be dangerous and even deadly. Several hack customers have been raped. Two hack drivers were shot and killed in April. Hacks are seemingly more hazardous than regulated taxies.

But if you put hacks out of business, you'll deprive many people of greater food and transportation choice. Shoppers would have to pay the higher fares of licensed cabs, which might be out of reach for many. Without transportation they would have to rely on neighborhood offerings, which are often less healthy and more expensive. And of course hacks provide one of the few ways in some neighborhoods to earn a living without peddling drugs.

Note that, in the practical absence of regulation and enforcement, private parties have come together to address the risks of Baltimore hacking in a way that would warm a libertarian's heart. As Vozzella notes, supermarkets run background checks on hacks and issue them IDs for customers to check. Hacks try to run a smooth show and keep bad actors out of the business. Supermarkets won't issue an ID unless a hack "captain" vouches for a new driver. Customers stick with the hacks they know and trust.

It seems like self-regulation may be working -- until it doesn't. How should Baltimore respond? Should it crack down? Enforcement would divert public safety resources the city badly needs elsewhere. Should it continue ignoring hacks? That might put new hack customers in danger. Should it issue special hack licenses that are more restrictive than cab licenses? That would require new rules, regs, administrators, enforcers etc.

Posted by Jay Hancock at 6:18 AM | | Comments (21)
Categories: Regulation
        

Comments

The issue here and in about 40 other trades and businesses is the artificially imposed limits on entry to operate legitimately.

Will all those who practice as plumbers and electricians and taxi cab drivers be able to qualify for licensing and then qualify for the insurance and inspections? Probably not.

But most would. And the organized entities in those industries know it.

Hello,

I think that the police should not worry about the hacks because for the most part people know how to govern themselves and the hacks actually provide a much needed service as well as trying to make an almost honest living. Unfortunately, a middle aged man like me with 20 yrs of acct. exp. cannot get a job in Baltimore for various reasons, so hacking becomes the only way to feed your family. Leave the hackers alone.

Although they provide a needed service to some of the poorest communities, the hacks need to pay for that privilege. They are basically earning income without being taxed on that income. A solution could be to allow them to a pay a special fee for being a hack that would not be tracked. Basically, pay the fee and receive a certificate. No certificate and your car is impounded for at least 30 days or until the fee is paid. Whichever is longer.

A hack is likely to be driving better equipment than a licensed cab driver in Baltimore. Most of the cabs here are refurbished police cars that get sold at auction when they reach high mileage. The hacks carry passengers in the same vehicles that they use for their own families.

"It seems like self-regulation may be working -- until it doesn't.... Should it continue ignoring hacks? That might put new hack customers in danger."

When a plane crashes, do we say that FAA regulation is not working? When someone dies of food poisoning from lettuce or a bad hamburger, do we say that USDA regulation is not working?

You're presenting a false choice - we can have no regulation and some bad outcomes, or regulation and perfect outcomes. Regulation does not equal perfection - not on this planet full of imperfect people.

On the hack issue, it sounds like some people desire a service at a particular price, and other people are delivering that service. How can that be a crime?

And how does allowing the taxi cartel to set prices and restrict competition (under the guise of regulation) foster the public good?

Of course, if public transit wasn't so bad, people could take that.

I don't care what they do as long as the pay taxes. Make them pay taxes and then I'm ok with it.

They aren't bothering anybody and they provide a service to a community that has long been ignored by the uptown cab companies. Here's a novel idea, why not champion for more affordable goods and services in these poor communities so that the individuals utilizing the hacks services won't need the hacks to get to said goods and services which are often located 5 or more miles from where most of these individuals live.

If they stop the hacks then people will get their number and pay them when they come pick them up . It's plenty of ways to get around it but let them operate and make their side money. Taxes are high as it is already!!!

They will bust any easy law breaker and let the drug deelers and thiefs go caus they are a scared of gunfire. Tax laws make doing what they want impossipble. I gotta eat and they won't let peoples feed themselfs by workking on there own. Let me live and provide for myself with what I got and what i can do. Is that to much to ask?

I have to take hacks to and from the market as I do not drive. Trying to get a cab to leave the more populated downtown Baltimore to come closer into the city is hard. In front of the Gallery cabs park there, if I walk to the cab to take me out of the downtown area, they do not want to do it.
Also, the attitude of most cabbies is rude and they will take the long way and act like they do not know how to get anywhere after you leave downtown.
It is cheaper and quicker to get hacks, most markets have a good understanding with the hacks and people do not have to wait too long to get one compared to waiting to get a cab.
With the unemployment rate being the way it is, there will probably be more hacks around. Also county cabs cannot come into the city and visa versa so that can become a problem too when going to the malls.
Most incidents that have occurred with hacks being robbed or hurt is from them picking up people on the street not from the market. Most of those who use hacks are elderly or do not drive.

As a licensed Baltimore City cab driver, I am shocked to see such an article that ignores me.

Hacking is illegal and that is the bottom line. The police in this town don't bother with the hacks or out of jurisdiction taxi cabs unless they are told by command staff to do so. If I as a City cab were to go to Towson and pick up a fare on York Rd. at the movie theater, a Baltimore County Police officer would be right there to issue me a criminal citation for breaking the law. Same thing applies to BWI Airport where it frequently costs passengers $40.00 or more to ride into the city downtown and we have to charge $30.00 flat rate for that same trip in the opposite direction, but if I were to pick up at the Airport, since I am out of my jurisdiction, I will be arrested and the car impounded. These aren't traffic violations, these are criminal ones that have real consequences such as arrest, large fines, and potential jail time. Again, hacking is illegal, and when the police do their job in regards to hack stings, the hack is arrested along with all the passengers, and the vehicle is impounded. We Baltimore City Licensed Cab Drivers are very restricted and policed so why do hacks and out of jurisdiction cabs get a free ride?

Baltimore City has one of the lowest cab rates for a major metropolitan area in the country, remember the little protest we had at the PSC on March 25, 2009 where we blocked access downtown? The State was going to drop our rates even lower based on an agreement that was made in 2005 that never took into consideration gas prices going down so fast. We protested, and we were heard and presently we are still in process for a new rate case and the PSC has frozen our rates untill the case is settled.

There are 1,151 licensed cabs in Baltimore City and we are a slow cab town and in DC, just 35 miles to the south with a smaller population, they have over 6,600 cabs and a lot of work. Why such a wide gap in licensed cabs? The DC cabs have no competition from hacks where we in Baltimore City do. I can ride down North Ave. anytime of the day or night and see people "waggling" there finger looking for a hack and when they see me in my clean, waxed, detailed 2005 Ford Crown Victoria licensed legal Baltimore City Taxicab, they wave me off or turn their back towards me and I just keep it moving, but every once in awhile, someone will be tired of waiting and will jump in my cab and I always get the same answer at the end of the trip, "wow, you are cheaper than the what I usually pay the hack".

I'm sure if you look up the violence associated with hacks, it would correlate with the desperate pickup from a random corner at times when cabs and buses are scarce. The organized hacking from grocery stores with older gentleman in nicer cars (than taxis) are providing a much needed service (and security) for people in need. What is the difference from having a friend pick you up from the market & giving them gas money and becoming acquainted with a regular who is earning extra (or maybe even much needed money) doing the same thing?

Kenny B, I honestly didn't know about the legal restrictions governing the driving territory of city cabs. What a huge pain in the rear for you guys.

Thank you also for sharing your experience with people waiting for hacks. The funny thing is, though, that I regularly see people trying to flag down legit cabs, only to have empty cab after cab whiz by. I see it every day.

I can't understand why cabs are not available in the innercity neighborhoods like they are in downtown neighborhoods. Cabs can always be
found in front of the Gallery Mall and are
lined up whole street right in front of
Penn Station at all times but you can't get one to pick you up at your front door
to save your life in an innercity neighbor
hood. The legal cabs only want to take
the safe customers- those from the
hotels and the train stations while they
ignore the innercity customers. When
I lived in the city, i used to have to wait
an hour or more after calling them to
take me to work at night, sometimes
they didn't show up even after I waited
an hour for them to pick me up.

Laura,

At times you will see cabs pass by people standing on the street and a number of things could be at play. More than likely, the cab is enroute to a call. The cab could already have a fare, sometimes we carry packages instead of people. The cab may not be working, several drivers have the cab as their only means of conveyance or maybe the cab driver just missed the the person and couldn't stop safely. All excuses, but at times it is hard to get a cab.

Teelee86,

There are several types of cab drivers, some are stand drivers who prefer the safety of large cab stands, then you have the call drivers who don't like to sit at the stands and just rely on dispatched jobs from the cab association, then you have the street hustlers that just work the streets and no stand or call work. Then you have drivers that do it all and don't lock themselves into any group. For a driver, you have to work within whats comfortable for you. Driving a cab is an inherently dangerous occupation and being in one of the most dangerous cities doesn't help. Baltimore City and New York City are the only 2 cab jurisdictions that mandate by law the use of a bullet resistant shield in all taxi cabs. The shield offers a measure of safety, but not enough to make cab drivers want to go into Cherry Hill at 1:00AM to pick up someone, but there are drivers that will. Cab drivers tend to work the Charles St. corridor and the downtown areas because they are safer, well lit, and typically easy destinations. Inner city neighborhoods are rough on cab drivers because we become targets for everything from bottles and bricks being thrown at the cab to people trying to get you to take them somewhere and then they jump out the cab without paying. Not everyone is that way but after being burned enough times, the average driver has to rethink their strategies and then certain areas of the city becomes off limits for that driver because he or she doesn't feel safe going there.

If I want to pay someone to give me a ride home from the store, that should be no ones business.

Allow people to act as a taxi without permits? Are you insane? What's next, unlicensed doctors, plumbers, pilots? Just because the economy is slowing does not justify allowing people to start transporting people in personal cars while other persons pay a lot more for taxi insurance etc. I don't know why, but all across the country, taxi commissions are ignoring more than ever, an increase in illegal taxis operating on their streets. Being a taxi driver myself (for 16 years) it angers me that my industry has been chosen to be the first industry where persons can operate unlicensed or illegally while I spent the last 16 years of my life building up a decent business which now is being hurt by person entering the industry illegally. In summary, of course the police should crack down on persons transporting persons for compensation, it's illegal!

NP, Kenny, and thanks for the answer. I don't look at legitimate reasons for not picking up a person as an excuse, per se. I just see it a lot.

John queries: "I don't know why, but all across the country, taxi commissions are ignoring more than ever, an increase in illegal taxis operating on their streets."

In (almost) all jurisdictions there is a hard limit on the number of medallions allowed. The commission has enough to do without having to fight yet another battle with the current legal operators as they attempt to limit (legal) competition.

A similar dynamic exists with all other work which requires a state license to operate.

As with all stories: follow the money.

The difference between you paying a friend for gas and paying a hack is that your friend may only drive you once a week - and will not have passengers in the vehicle all day long. Insurance companies are obligated to pay for injuries to passengers in your vehicle - unless they can prove you are operating as a hack. With no receipts, no contracts, and nobody wanted to admit they are breaking the law knowing they could face charges and be denied insurance - they do not release the informatin. In turn your insurance rates go up everytime one of these vehicles is in an accident. And the passengers that can't afford to pay for a taxi almost always seem to be severely "injured"

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About Jay Hancock
Jay Hancock has been a financial columnist for The Baltimore Sun since 2001. He has also been The Baltimore Sun's diplomatic correspondent in Washington and its chief economics writer. Before moving to Baltimore in 1994 he worked for The Virginian-Pilot of Norfolk and The Daily Press of Newport News.

His columns appear Tuesdays and Sundays.
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