The bills, sponsored by Sen. Celestino White, would preserve the way taxi service is currently provided at the territory’s transportation hubs for the foreseeable future. The taxi associations holding the franchises would continue to have the sole right to operate out of the terminals they are assigned to. Independent taxis, taxis from competing associations and hotel shuttle vans would continue to be barred from operating on the premises.
The Virgin Islands Port Authority indicated over the summer that they wished to move away from the exclusive franchise system. These bills could prevent them from doing so.
The franchises would be assigned as follows: the Henry E. Rohlsen Airport to the St. Croix Taxicab Association, the Austin “Babe” Monsanto Marine Terminal to the St. Thomas Taxi Association, the Urman V. Fredericks Marine Terminal to the East End Taxi Association and the Cyril E. King Airport to the Virgin Islands Taxi Association.
Opponents of the exclusive franchises argue that they undercut competition, raise prices, lower quality and overall make the Virgin Islands a less desirable tourist destination.
In a written statement, Sebastiano Paiewonsky-Cassinelli, president of the St. Thomas-St. John Chamber of Commerce, argued that at competing Caribbean destinations, tourists are free to choose from a wide range of transportation options, such as shuttles, point-to-point taxis or limousines.
“Travelers have come to expect choices and prices consistent with the level of service,” he said. “Limited transportation options and poor customer service at our airports and marine terminals are major flaws in the overall visitor experience in the Virgin Islands.”
Representatives from the taxi associations have heard these criticisms before, and when the bills were considered in the Senate Committee on Government Operations, Energy and Veterans Affairs in early October they addressed these concerns head-on in their testimony.
Alvin Martin, Vice President of the East End Taxi Association, argued that without the franchises, taxi service at the airports and marine terminals would be more chaotic.
He said that members of his association were required to wear uniforms and routinely clean their vans, thus presenting a professional image to tourists. He said the association also ensures that all vans are properly maintained and that all drivers are insured.
As for customer service, he said the associations were able to field complaints and directly monitor and discipline their members when an issue arises.
In an interview, Brad Nugent, assistant commissioner of the Department of Tourism, strongly disagreed with the argument that franchises improved customer service. He said he would have liked to debate the issue with the taxi associations at the hearing, but he was not invited to attend.
Neither the Department of Tourism, the Hotel and Tourism Association, or the Chamber of Commerce were invited to testify at the hearing, which Nugent said was unfair.
“The government is putting itself in a position to establish a monopoly for, some people might argue, the friends and pals of politicians,” he said. “That concerns us, and it should concern the public.”
He said he was also concerned about the speed at which the bills were being pushed through the Senate. In an exceptionally rare move, the committee voted to move the bills directly to the floor for final consideration. Bills are almost always referred to the Committee on Rules and the Judiciary for further debate and revision before being voted on by the full body.
A stipulation in the bills as written would provide the taxi associations with the option to automatically extend the franchises an additional ten years when they expire. Nugent argued that a bill that would lock in place the way taxi service is provided for two decades deserved at least two hearings and that opponents of the measure should be given a chance to testify.
Nugent went further to say that it might be time to reexamine other aspects of the taxi industry as well.
He said that he would like to see the Virgin Islands Taxi Commission lower the rates to a price point that would be more tolerable for tourists. He also said he’d like to see customers charged by the trip rather than per person.
He said that high transportation costs were one of the main complaints of visitors to the territory and a leading reason why many do not return.
“When someone has already visited here and they have to make their second choice of coming back, they look at the entire experience,” he said. “If 60 percent of your cost is going to be just getting around, that’s something that’s a factor on whether or not you’re going to come back.”
Ultimately, he argued that greater competition throughout the taxi industry would be good for cab owners because lower costs would result in more tourists wanting to utilize their service.
“By no means am I suggesting we come up with ways to take money out of the pockets of the taxi drivers,” he said. “We’re asking them to open it up to competition, look at your pricing, and come from a position of supply and demand.”
White defended the bills and characterized the dispute as one between small, independent businessmen and large, deep-pocketed hotels who wanted to replace taxi operators with their own shuttle buses.
He said the associations deserved the lengthy franchises because they were good tenants and provided quality service. He said the Virgin Island Taxi Association currently pays $40,000 a year for their franchise and had never been late on a payment.
As to the speed at which the bills were being moved forward, he said the bills had been written and waiting for consideration for six months and that the port authority and representatives of the tourism industry had long known his intentions.
He also claimed that in the past when he invited members of the hotel and tourism industry to testify at his hearings, they did not show up.
White said he was disappointed the bills would not be voted on before the Nov. 6 election because he fears the senators who have so far supported it will change their position after they no longer need the votes of the taxi drivers.
He went on to say that he is concerned that after he retires from the Senate at the end of this term, the taxi industry will not have a champion in the legislature. He said part of the reason for the length of the franchise agreements was to ensure their prosperity is secure in his absence.
“I don’t want to take the chance that when I’m gone there won’t be a watchdog that will look out for the interests of these small business individuals,” he said.
Nugent has indicated that the Department of Tourism is lobbying senators to return the bills to committee for further debate. If they are unsuccessful, the bills could be voted on as soon as the next meeting of the full Senate on Nov. 19.