July 13, 2004

SUBJECT: AWARD OF TAXICAB FRANCHISE TO SILICON VALLEY CHECKER CAB

A taxicab franchise application and required fees has been received from Silicon Valley Checker Cab Company. Staff has conducted an investigation into the applicant’s background as required by Municipal Code Section 5.36.050. After careful review, staff has determined that the applicant meets the mandatory code requirements as established. Staff recommends that Silicon Valley Checker Cab Company be awarded a non-exclusive taxicab franchise.

There are currently five valid taxicab companies franchised to operate within the City of Sunnyvale. They are Yellow Cab Co. Peninsula., Santa Clara Cab, West Valley Cab, Silicon Valley Checker Cab and USA Express Cab. Silicon Valley Checker Cab Company has previously operated with a valid franchise agreement, which will expire on July 10, 2004.

Silicon Valley Checker Cab Company acknowledges and accepts the requirements of the Municipal Code as well as the taxicab franchise agreement. Silicon Valley Checker Cab Company 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 to that:

1. The applicant has been convicted of certain criminal offenses.

2. The proposed color scheme or other insignia may tend to confuse the identification with other franchises already operating within the city.

3. 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 expired and shall no longer be valid unless a new franchise is issued under the provisions of Municipal Code Chapter 5.36.

The owner of Silicon Valley Checker Cab Company has submitted information and documentation to demonstrate compliance with each of the criteria identified in

Municipal Code Chapter 5.36, as outlined below.

1. Local Contact Requirements – Silicon Valley Checker Cab Company has provided a toll-free telephone number to its dispatchers, together with sufficient phone lines to provide for prompt response to callers.

2. Vehicles - Silicon Valley Checker Cab Company is the registered owner of twenty-four (24) company owned vehicles that have been identified for operations under this franchise. The taxicabs are identical in color schemes and markings; they are orange with the company name in yellow lettering on the door and checkerboards on the front fenders. The telephone numbers are printed on the rear fenders.

3. Taximeter – Each taxicab, which has been identified for operation under the 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 for the vehicles identified for this franchise agreement.

4. Insurance – A letter of valid insurance has been provided from Norton Insurance Services, Inc. in the amount of $1,000,000 combined single limit. This insurance remains in effect from the previous franchise agreement with the City of Sunnyvale listed as Additional Insured with a 30-day prior notice of cancellation clause as required and the company understands that it may not operate without proper insurance. The City’s Risk and Insurance Manager, Barbara Coats, has reviewed and found that the letter meets the requirements of the municipal code.

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, narcotic violations, or crimes of moral turpitude as referenced in the Municipal Code.

6. Experience of Owner – The investigation has revealed that the applicant, Larry Silva has been in involved in the taxi industry for over 20 years. He currently operates Silicon Valley Checker Cab Company in the south bay area, providing service to the San Jose International Airport as well as the Valley Transportation Authority.

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. Currently this company has twenty-one (21) drivers with valid permits. There is nothing to indicate that the future applicants for taxicab driver permits will not meet the permit requirements. The applicant is also adhering to the random drug testing requirements as established by State Law and is utilizing Schlim, McCabe & Associates for his Medical Review Officer Services.

8. Fees – The applicant has paid the required franchise application fee of $343.00. He is aware of the quarterly vehicle fees that are due during the month following the quarter the agreement is signed. He is also aware that a Taxicab Franchise Questionnaire will be completed by him, listing driver and vehicle information and sent in with his quarterly payment.

9. Fare Schedule – Silicon Valley Checker Cab Company will adopt the City’s maximum fee 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 be approximately $30,000 during the term of the agreement. This does not include the amount of revenue generated by the driver permits issued.

Posting of the Council Agenda, posting on the City web site and publication in the San Jose Mercury News. Copies of the R.T.C. were provided to Silicon Valley Checker Cab Company.

1. Introduce and adopt an ordinance awarding a non-exclusive franchise for taxicab service to Silicon Valley Checker Cab Company for the period of August 19, 2004 through August 18, 2006 per applicant request, and authorize the City Manager to execute necessary documents of agreement.

2. Do not introduce or adopt an ordinance awarding a non-exclusive franchise to Silicon Valley Checker Cab Company.

Staff recommends Council approves alternate #1.

Prepared by:

Rachel Vasquez
Sr. Office Assistant

Reviewed by:

Robert Bradshaw
A/Director

Approved by:

Amy Chan
City Manager

Attachments

1. Non-exclusive Franchise Ordinance
2. Taxicab Franchise and Agreement