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Despite 8 million tourists, Niagara Falls taxis and liveries fight to survive

Driving a taxicab in a city that welcomes more than eight million tourists a year might seem like a lucrative business –  and that might have been true at one time.

But today, owners of taxi and livery companies in Niagara Falls are battling over a piece of a shrinking pie.

Most tourists who come to Niagara Falls arrive either by car or in tour buses, studies have long shown, and have no need for a cab. And many of the major hotels operate shuttles for their guests.

State and local governments even fund a hop-on, hop-off shuttle that connects downtown Niagara Falls to Fort Niagara in Youngstown, and that hits all of the major stops along the Niagara River.

And now, since June 29 with the state's legalization of ride-hailing services, private vehicle owners who sign up with Uber and Lyft have been able to join the competition.

"Now we are hurting from all sides," said Jay Pawar, owner of LaSalle Taxi, which operates 38 cabs in Niagara Falls.

Owners of livery companies have been agitating for the city to issue more medallions – city permits that allow a taxi to pick up customers who flag them down on the street. Livery companies can carry any customer anywhere, but appointments are required. If they had medallions, livery owners say, they could pick up fares spontaneously, too.

However, taxi companies, some of which have simply stashed the medallions they bought years ago in a drawer for lack of demand, don't see the need for more permits.

"There is no business here. There is no place for them," Pawar said.

Ride-hailing will be legal June 29. Here are New York's rules.

Limits on taxi service

The number of taxi medallions in Niagara Falls – 89 – is fixed in the City Charter through a formula pegged to the city's population, and that hasn't been altered since 1984,  according to Police Lt. Jon Paul Schuster, who until recently was the city's enforcer of taxi regulations.

When the medallions were issued, the city charged $100 for each one,  but they can be sold in private transactions for whatever price the parties agree upon. Pawar said he's heard of medallions changing hands in the past for as much as $25,000.

Schuster said the city must approve the sales and gets $100 from each transaction. Also, there's a $75 annual fee to keep a medallion.

Two companies, LaSalle Cab and Blue United Taxi, have most of the medallions; smaller companies, such as A1 Taxi, Diamond Taxi and Aero Taxi, have a few.

"With Uber and Lyft coming in, I think the medallion issue is a moot issue," Council Chairman Charles A. Walker said. "When they say we need more medallions, I don't think we do."

Councilman Andrew P. Touma said there has been discussion of changing the medallion policy, perhaps requiring companies to lease them on a year-to-year basis instead of holding them permanently.

If someone wants to operate a taxi business, Touma said, the city should make it possible to obtain a medallion.

"The average person can't get their hands on them if they'd like to start their own business. That's where the problem is," Touma said. "The market is astronomical. We're talking $10,000 to $15,000 per medallion, which a lot of people can't do for a startup. We don't want to water down the market, but certainly we want to give people an opportunity."

No tourists for taxis

That opportunity doesn't seem to have much to do with ferrying tourists from place to place.

On a recent sunny afternoon, a reporter talked to about 100 tourists at Niagara Falls State Park and along Old Falls Street near Seneca Niagara Casino, looking for people who had used a taxi in the city. No one had.

"Everything's pretty much within walking distance, so there's not really a need for one," said Michael Schreck of Old Bridge, N.J.

Most of the tourists said they had driven to Niagara Falls in their own vehicles or rented a car at an airport. The informal survey turned up only one Uber customer, a Buffalo resident who made a day trip to the Falls. Only one taxi was observed cruising the tourist district.

"The tourist business is only 3 1/2 months," Pawar said. "We don't need any more transportation."

"A lot of the cabs, they're used by the locals," Touma said. "We live where not everybody has transportation, so they rely on taxicabs and liveries. You go down Main Street or Pine Avenue, you see taxicabs and liveries everywhere."

"We as a taxi-livery association asked the city to increase the medallions for the benefit of the residents," said Tahir Mahmood, owner of Taxi Unlimited, which despite the name is a livery company. He also represents the Niagara Association of Livery and Taxicab Chauffeurs, which led the protest at the Council meeting.

More medallions, Mahmood said, "would give more freedom to the residents of Niagara Falls to make a choice."

He accused the taxi companies of operating a "monopoly."

Mahmood said livery companies can't pick up tourists or anyone else on the streets, but they can respond to a phone call asking a vehicle to come to a fixed location. He said his business is a substantial one, operating 43 vehicles with a 2016 payroll of $450,000. Much of the business results from taking Medicaid patients to and from medical appointments.

"We take people from home to the doctors. That doesn't need a medallion," Mahmood said.

Such services often are arranged through Medical Answering Services, a Syracuse-based company that has a contract with the state Health Department to line up rides for Medicaid users in most of the state except New York City and Long Island.

Background checks an issue

Taxi industry wants background checks for ride-sharing drivers

Company officials didn't respond to calls seeking comment, but Medical Answering Services' transportation policies, posted on its website, make no mention of whether background checks are required for drivers working for the vendors that provide the rides.

The city requires taxi drivers to pass a criminal background check, and the state's ride-hailing regulations require such checks for Uber and Lyft drivers, too.

But livery drivers don't have to pass such background checks.

Touma said the owner of one of the major livery companies told him that such a policy might force many of his drivers to quit their jobs.

"A lot of them have felonies," Touma said. "That is the crux of the issue. If we have background checks, a lot of the livery owners are concerned that the livery drivers would lose their jobs because they have recent felonies."

The City Council has tabled Touma's proposal to impose the background checks on livery companies.

Pawar, of LaSalle Cab, said he favors background checks for his livery competitors.

"Most of the liveries, they put any driver there – criminals, drug addicts," Pawar charged. "I don't agree with that. A driver is a driver. It's about the safety of the clients."

"We were concerned that a service that was unregulated would be unsafe for our residents," Touma said.

Schuster said anyone who's had a felony conviction within the last five years, or two misdemeanors within two years, is ineligible to drive a taxi. Sex offenders and those with drug convictions are permanently barred from driving cabs, Schuster said.

Touma said the issue may be resolved by altering the bans on those with criminal records to apply only to certain types of crimes, or changing how recently the crimes have to be to bar someone from driving for a transportation service.

"We should provide a schedule in the ordinance that spells out exactly what would not be allowed as far as some type of criminal activity," Touma said in the wake of a meeting with livery owners and Police Superintendent E. Bryan DalPorto.

Mahmood's group argued that criminal background checks for livery drivers would be racist, but Council Chairman Walker, who is African-American, shrugged that off.

"I don't agree with that," Walker said. "It affects everyone, individuals who have gotten their lives back on track. It just so happens that most of those drivers in the City of Niagara Falls are African-American, but it affects everyone."

"We want to give people opportunities. We don't to be too restrictive, yet we have to be careful of who is driving the public and make sure they're safe as well," Touma said. "We're trying to find that fine line."

He said the Council likely will hold a public meeting on background check policies before voting, perhaps this fall.

The Council also has instituted a taxicab commission, to be appointed by Walker, to advise it on taxi-related issues.

Walker, who intends to make appointments after the August Council recess, said he wants to make sure all stakeholders are represented.

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