SUBJECT: AWARD OF TAXICAB FRANCHISE TO SANTA CLARA CAB CO (Change of Ownership)

A taxicab franchise application and required fees has been received from Santa Clara Cab Co to obtain their franchise agreement due to the purchase of the existing business as it stands. Staff has conducted an investigation into the applicants’ background as required by Municipal Code Section 5.36.050. After a careful review, staff has determined that the applicant meets the mandatory code requirements as established. Staff recommends that Santa Clara Cab Co be awarded a non-exclusive taxicab franchise.

There are currently eight valid taxicab companies franchised to operate within the City of Sunnyvale. They are: Yellow Cab Co. Peninsula; Computer Cab Company; Express Cab Company; Milpitas Cab Company; West Valley Cab Company; Green Cab; Silicon Valley Taxi and Santa Clara Cab Company if given this franchise agreement.

Santa Clara Cab Co acknowledges and accepts the requirements of the taxicab franchise agreement. Santa Clara Cab Co is also aware of the right of the City of Sunnyvale to revoke or suspend the taxicab franchise if it is determined that there is a violation or non-compliance of the terms contained in Municipal Code Chapter 5.36.

The term "non-exclusive franchise" as used in the Sunnyvale Municipal Code means that the City does not limit the number of like franchises in operation at one time. If an applicant meets the provisions as outlined in the Municipal Code, then the franchise to operate a taxicab service should be issued.

The City's non-exclusive franchise requirements are derived from Municipal Code Chapter 5.36. It is unlawful to operate any taxicab in the City unless the owner applies for and obtains a franchise to do so. The City Council may deny a franchise to any applicant if it appears to its satisfaction that the applicant has been convicted of certain criminal offenses, the proposed color scheme or other insignia may tend to confuse the identification with other franchises already operating within the City, or that any other reasonable cause exists which, within the City Council's sound discretion, would render the proposed operation undesirable to the City of Sunnyvale.

A franchise shall be issued for a term of two years. At the expiration of the term the franchise shall be deemed to have expired and shall no longer be valid unless a new franchise is issued under the provisions of Municipal Code Chapter 5.36. The City Council for good cause may extend the term of the original franchise.

The owner of Santa Clara Cab Co has submitted information and documentation to demonstrate compliance with each of the criteria identified in Municipal Code Chapter 5.36, as outlined below.

1. Sunnyvale Business Address - The local business address required by the code is 647 E. Arques, Sunnyvale. This office will be open to the public from 7 AM to 7 PM, Monday through Friday. The telephone number for this office is (408)773-1900. Available at this office will be public taxi trip complaint forms and applications for taxicab drivers. Dispatching is done from the main office in San Jose.

2. Vehicles – Santa Clara Cab Co is the registered owner of 8 company owned vehicles which have been identified for operations under this franchise. The taxicabs are identical in color schemes and markings; they are blue over yellow with blue lettering. The phone number is printed in blue on the side and the rear of the vehicles.

3. Taximeter - Each taxicab, which has been identified for operation under this franchise, is equipped with a taximeter which must be inspected annually by the Santa Clara County Sealer of Weights and Measures. Staff has been provided with the reports.

4. Insurance – A letter of insurance has been provided from BIM Insurance Marketing, Inc. in the amount of $1,000,000 for bodily injury and $1,000,000 for property damage. This insurance is in effect and will remain so, the company understands that it may not operate without proper insurance. The City of Sunnyvale is also to be named as additional insured with a 30-day prior notice of cancellation clause as required.

5. Criminal History - A criminal history check of the applicant was conducted as required by code. The applicant has not been convicted of any felonies, narcotics violations, or crimes of moral turpitude as referenced in the Municipal Code.

6. Experience of Owner - The investigation has revealed that the applicants, Denise Jan and Philip Marciel, have significant histories in general business and they have been business owners in the past. This is their first taxi related business venture, but both are familiar with the rules and regulations at local, state and federal levels.

7. Personnel - Individual drivers were not identified in the application, but each will be required to obtain a taxicab driver's permit issued by the Department of Public Safety. There is nothing to indicate that the applicants for taxicab driver permits will not meet the permit requirements. The applicant is also adhering to the random drug testing requirements as establish by State Law.

Although there are no Municipal Code requirements concerning standards for timeliness of taxicab company service, the applicant said that upon receipt of a call, their normal response time is fifteen minutes or less. The applicant also said that the Department of Public Safety will receive the highest priority when the company receives a call for taxicab service when the officer is standing by as a result of a call for service.

8. Fees - The applicant has paid the required franchise application fee of $296.00. They are aware of the quarterly vehicle fees that are due during the month following the quarter the agreement is signed.

9. Fare Schedule - Santa Clara Cab Co will adopt the City's maximum fare schedule .

Granting a taxicab franchise should have only minor fiscal impact on the cost of monitoring the franchise for compliance. The revenue generated from this franchise due to application fees, quarterly vehicle fees, and the business license fee would approximate $9,700.00 during the franchise agreement, not to include the fees for the drivers permits.

Posting of the Council agenda and publication in the San Jose Mercury News. Copies of the R.T.C. were provided to Santa Clara Cab Co.

Staff recommends Council approve Alternative #1.

Prepared by:

Heather L. Tannehill
Operations Manager