SANTA MONICA, Calif.—When city officials in this prosperous, highly regulated municipality last interfered with its taxi industry, circa 2009, the existing rules were simple. As the Los Angeles Times put it in a contemporaneous article, "anyone with a clean driving record and no criminal history can get permission to operate a cab, provided the vehicle meets set standards." As a result, "anyone looking for a taxi has plenty to choose from, but the fares and quality of service vary."
Lots of choices with varying prices and quality describes Santa Monica's restaurants, bars, dry cleaners, nail salons, clothing boutiques, and cold-pressed juice emporiums. But city officials believed that the taxicab industry should be standardized and that Santa Monica's residents were being afforded too many choices. A study found that a population of 84,000 was served by 454 licensed taxis. "It's just too many," then-Deputy City Manager Elaine Polacheck said at the time.
With that questionable premise, the city decided that the best way to improve transportation going forward was to pass a more thorough regulatory framework. City experts settled on a franchise system: Competition would be limited to five cab companies. The total number of taxis would be fixed at around 200. The biggest losers, besides the Santa Monica residents who had a tougher time finding a taxi, were the single proprietors who'd bought taxis and earned their livings in the city only to be told that they were no longer welcome there.