Des Moines has become 'wild west' for taxis since Uber's arrival

Kevin Hardy MacKenzie Elmer
The Des Moines Register

It can cost as much as $20 to take a cab from the Des Moines International Airport to a hotel across the street. 

The driver may turn on a meter or go without one altogether.

That cab could be dirty or smelly. Its seats could be pocked with cigarette burns. Once the cab arrives, its driver may only accept cash. 

Those issues are among the growing list of consumer complaints about taxi service in Des Moines.

Taxis line up and wait for their next fare at the Des Moines Airport on Tuesday, Oct. 31, 2017, in Des Moines.

"The car was filthy dirty and the driver was on his phone the whole time and had no idea how to get to my house," Des Moines Councilwoman Linda Westergaard said of a trip she took from the airport to her east-side home earlier this year. 

Airport officials say the service problems only manifested after Des Moines deregulated the local taxi industry, following sweeping changes in state law designed to level the playing field between taxis and app-based ride-sharing providers like Uber.

In December, the city eliminated its vehicle-for-hire rules, completely deregulating taxis. Now, there is no agency keeping tabs on who operates a taxi within city limits.

Des Moines officials blame the state for stripping their regulatory authority. But state leaders say it was the city's choice to deregulate taxis.

Still, one thing is clear: There are growing concerns about the way some cabs are operating in Des Moines and the fees they are charging consumers. And the problems are most evident at the state's busiest airport. 

"It's kind of like the wild, wild West," Kevin Foley, executive director of the Des Moines International Airport, said at an Oct. 10 meeting of the airport authority board. 

Taxi customers 'confused by the level of professionalism'

Airport leaders are exploring plans to place more restrictions on taxi operators. While it's early in the process, Foley said he's interested in limiting the number of companies that pick up passengers at the airport and placing higher standards on those who do. 

"We had hoped that a free market competition would have addressed all these things, but it's not for whatever reason," Foley said. "We're just starting to figure out what and how we can get a handle on the taxis out here."

Since Des Moines deregulated taxis in 2016, more cab companies have sprouted up, some with just a single driver and car. 

Currently, 28 taxi and limo services are permitted to pick up passengers at the airport. But the terminal only has 15 holding spaces for taxis, some at the taxi stand near baggage claim and others near the departure drop-off. That leaves some taxis parking on residential streets in nearby neighborhoods as they wait for fares, Foley said. 

Taxis line up and wait for their next fare at the Des Moines Airport on Tuesday, Oct. 31, 2017, in Des Moines.

But neighborhood association leaders from the nearby Watrous South and Southwestern Hills neighborhoods told the Register they've heard few complaints. 

Aside from an overabundance of cabs, airport officials and hotel operators have heard mounting service complaints. Some cabs charge a flat $15 or $20 to go to the hotels immediately surrounding the airport — sometimes even to just go across Fleur Drive. Others set prices verbally without using meters. And some refuse to accept credit cards.

"People who are flying into town are confused by the level of professionalism," said Sam Gilbaugh, the front desk manager of the Staybridge Suites hotel in the East Village. 

Passengers arriving at the hotel sometimes have to come in to use an ATM to retrieve cash for taxis, he said. And when dissatisfied customers inquire about contacting taxi supervisors or company owners, they get blown off, he said.

"They’re like, 'oh my manager’s not working today, his phone is not working,'" Gilbaugh said. "Just really silly responses."  

How Uber changed everything

Des Moines once tightly regulated taxi companies, but its grip on the industry began to slip in 2008, when Alpha Taxi sued the city claiming its rules created an unfair monopoly.

The city licensed individual drivers and conducted background checks and driving histories. It also set maximum rates that taxis could charge for rides. 

Taxi companies were required to have a 24-hour dispatch center, $1.5 million in liability insurance and a fleet of at least eight taxis and 10 drivers. 

Only one company — TransIowa — met those requirements. Its 180 drivers operated 100 cabs under the Yellow Cab and Capital Cab banners. 

In reaction to the lawsuit, the city loosened its requirements and allowed fleets with as few as five cabs. It reduced insurance requirements and changed a rule on how old a taxi could be, extending the lives of cabs from three to 10 years.  

Then Uber came to town in 2014.

The San Francisco company launched its business knowing it didn't mesh with Des Moines' vehicle-for-hire laws. The city had 123 licensed cabs operating for five companies.

In 2015 Des Moines adopted new rules to allow companies like Uber to operate legally in the city. It stopped issuing taxi driver's licenses and instead required companies to conduct background checks and driving histories for their employees. 

Companies were still required to provide insurance and drivers had to maintain an identification card and some type of decal on the car.

But the city stopped regulating what fares companies could charge.  

Cab drivers, though, still complained that they were being forced to operate at a competitive disadvantage when compared with the lax regulations placed on Uber. 

The Uber app as shown from an iPhone.

Meanwhile, Uber was pushing the Legislature to step in and set statewide rules governing ride-share companies, which it did 2016.

"There never would have been a bill had it not been for Uber," said Rep. Peter Cownie, a Republican from West Des Moines. 

"Uber is a huge international business and we tried to create a regulatory framework for them to be able to do business in Iowa," Cownie said. "I think it was successful because (Uber) seems to be happy in Iowa and people seem to be happy using it."

But Des Moines City Councilwoman Christine Hensley blames Uber and the change in state law for the unwieldy taxi environment that has arisen. 

"We worked to accommodate them but they weren't 100 percent happy because they still had to go to the city council to operate on the streets of Des Moines," she said. 

In an email, an Uber spokesperson said the company was "pleased" with the state's approach.

"The state Legislature voted unanimously to approve uniform statewide regulations for rideshare in Iowa, which has allowed Uber to expand service to new cities and improve access to safe rides and earning opportunities for Iowans," the statement read.

Taxis line up and wait for their next fare at the Des Moines Airport on Tuesday, Oct. 31, 2017, in Des Moines.

State and city view taxis differently

The new state law left companies in charge of doing background checks and insuring their vehicles. The state collects little information, but it has authority to audit companies if necessary, said Mark Lowe, director of the Iowa Department of Transportation. 

"It's not so much us doing the checks of the drivers as it's (the companies) showing they have procedures in place to do all the things the legislation requires," he said. 

Cities can still regulate taxi companies, Lowe said, but Des Moines decided to opt out.

"There was certainly nothing in the legislation that compelled that," he said. "It was their voluntary decision that it was not worth their while to do that."

State law prohibits cities from adopting rules that exceed state regulations in certain areas, including who qualifies to drive a taxi. Among other regulations, the state bars taxi drivers with a felony conviction in the last seven years or violations for reckless driving or driving while suspended in the last three years. 

But it does not stop cities from monitoring the industry. 

Cedar Rapids, for instance, decreased its taxi regulations after the state law was passed, but city hall regularly audits taxi companies to ensure drivers are properly licensed and have passed company background and driver history checks.

Des Moines City Manager Scott Sanders said with more taxi services using similar app-based technology to attract riders, "the differences are becoming fewer and fewer" between traditional taxis and ride-sharing services. Yellow Cab, for example, offers an app similar to Uber. 

"It seemed unnecessary to continue regulating the older versions of taxi ordinances," Sanders said.

Sanders said the problems at the airport haven't risen to the level of the city "needing to get back into regulating at this point."

"I would prefer to see the airport step in with its own rules and fix that," he said.

Taxis line up and wait for their next fare at the Des Moines Airport on Tuesday, Oct. 31, 2017, in Des Moines.

Lowe said he has heard complaints about taxi service in Des Moines, too. In one case the word "taxi" was spray-painted on the side of a car. 

"That kind of thing worries me," he said. 

In January a United Cab crashed into a ravine north of Des Moines, killing one passenger. The driver, Mohamed Diriye, 29, of Des Moines, was charged with homicide by vehicle, operating while intoxicated and two counts of serious injury by vehicle.

Lowe said the DOT is "actively considering" whether the law needs to be changed again to give some regulatory authority of taxis back to the state if cities aren't going to set their own rules.

"From a public transportation standpoint, having gaps in the regulatory structure creates some sense of lack of safety for the traveling public," he said.

'There are too many companies'

At the latest airport authority board meeting, officials openly wondered about the driving histories and criminal backgrounds of the drivers working for the cab companies that have popped up since deregulation. 

"Some of these people have been turned down to work for the big cab services because they don’t meet the requirements," said board member Liz Ward. "So they just go out and do it themselves in their single car, which is kind of scary."

State law still requires that cab companies have criminal background check policies. But the state and Des Moines have largely left it up to companies to self-regulate. 

Yellow Cab, one of the city's larger taxi services, says it has created its own policies to ensure driver and rider safety. The company commissions nationwide criminal background checks and conducts random drug and alcohol testing on drivers, spokeswoman Carolyn Jenison said.

"I think people get into a car and assume it's a Yellow Cab," Jenison said. "We play by the rules and if somebody comes into town and has a bad interaction with a cab ... they just lump us all together." 

Salih Hamid, owner of Metro Cab XL, acknowledged that deregulation has helped fuel the growth of local cab companies. He formed his seven-car company in May. 

"There are too many companies," Hamid said. "There are some individuals that used to be drivers and now they own their own cars. They just put their company names on their cars."

Still, he's wary of any policy changes that might limit opportunity. "I have a company and want to expand," he said.

Hamid said some airport taxis are dirty or outdated and he would like to see some level of inspections to ensure taxis are adequate. He said he performs background and driving checks on potential drivers. 

Metro Cab charges a minimum of $15 to go anywhere from the airport, including hotels in the immediate area, though Hamid says drivers have sometimes been flexible with riders going to nearby neighborhoods. 

And 20 percent of that minimum charge is out of his hands. All cab operators fork over $3 for every ride that originates at the airport: The airport charges $2 and the third-party vendor that runs the taxi stand charges $1 per ride. 

Hamid hopes to see changes in the fee structure for cabs. But regardless of what the airport does, he hopes new regulations are fair.

"We work mostly at the airport," he said. "That’s our main business."