City Council extends LAX taxi management contract

The Los Angeles City Council voted on Tuesday to grant a new 10-year contract to a taxi management firm that was found in a 2007 city audit to have mismanaged funds and committed other irregularities while coordinating cab service at Los Angeles International Airport.

As part of the deal, passengers catching cabs at the airport will see the per-trip surcharge jump from $2.50 to $4. That is on top of the fare.

Under the contract, the city says, LAX will experience an almost four-fold increase in revenues, from $700,000 per year to an annual average of $2.7 million.

Winning the contract in a unanimous council vote was the current provider, Authorized Taxicab Supervision.

The firm manages an airport-area holding lot and dispatches cabs to LAX terminals for passenger pickup. Although it is a nonprofit entity, Authorized Taxicab Supervision collects millions of dollars in fees each year from drivers at the busy airport. The firm and its predecessor company have managed and controlled the entry of cabs to LAX arrival areas for more than 20 years.

A 2007 audit by the city controller’s office identified sundry shortcomings in the firm’s operations, including questionable cash payments to its board members, the presidents of the nine taxi companies with city franchises. The audit also found that LAX management had failed to provide adequate oversight. The company and LAX officials say the problems identified in the audit are being resolved.

A taxi drivers advocacy group, the Los Angeles Taxi Workers Alliance — which says it represents the interests of thousands of cabbies, many of them immigrants — argued that the audit demonstrated that Authorized Taxicab Supervision should be replaced and investigated. But LAX officials say the company offered the best proposal among four bidders for the job.

Last year, the council renewed the city’s controversial franchise taxi franchise system for five years despite complaints from the taxi workers alliance that the deal amounted to a lucrative cash giveaway for the politically connected and polluting cab industry.

City cabs generate some $180 million annually in revenue, according to official estimates. Mayor Antonio Villaraigosa argued for a two-year extension while the issue was studied. Industry executives argued that the five-year renewal was needed to ensure continued service and reduce pollution.

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