Focus Groups Figure in Bid to Lobby Council to End Taxicab Monopoly

As the fight over whether a second cab franchise should serve the San Fernando Valley nears a City Hall showdown Tuesday, lobbyists working to break the existing taxi monopoly have introduced market research techniques to plead their case.

Babaeian Cab Co., the outsider firm trying to enter the Valley’s taxicab market, is using “focus group” research to support its pitch that Valley residents believe that they are ill-served by the area’s one cab firm, Valley Cab Co.

Focus groups are a widely used technique in which groups of randomly selected people discuss their views about a topic, product or person. The reactions are analyzed to help the client weigh the marketability of a product.

A report on the findings of the Babaeian group sessions, as well as videotapes of 20 Valley residents participating in them, were distributed last week to Los Angeles City Council members by the Babaeian firm’s lobbyist team, headed by former Councilman Art Snyder. Observers said use of the focus groups shows that the stakes are high in the taxi battle.

“People don’t work this hard unless there’s money to be made” on a second franchise, said Francine Oscin, Councilman Hal Bernson’s transportation aide. “It must be that the business is out there for more cabs.”

Valley Cab’s gross revenues in were $4.5 million, according to city transportation records. City officials expect cab demand to grow as city programs begin operating to encourage cab use by seniors and businesses.

The Babaeian firm, which operates all cabs in Burbank, Glendale and Pasadena, is a major advocate of the second franchise plan. Valley Cab, which has exclusively operated in the Valley since 1984 and has city permission to run 96 taxis, opposes it.

Whether the focus group findings will affect a council vote scheduled Tuesday on the second-franchise issue is uncertain. But their use in a City Hall lobbying campaign is a novelty.

“It’s a new one on me,” Dan Beal, a veteran City Council transportation adviser, said when asked about the latest feature of the Babaeian company’s lobbying pitch. “I guess I’m just a cow county boy. But what’s a focus group?”

City transportation staff members, who are on record as opposing a second franchise, are leery about the validity of the focus group conclusions.

For the findings to have merit, focus group participants must be chosen “in a statistically valid and scientific way,” said Ken Cude, the Transportation Department’s top taxi regulation official. “Unless they can substantiate that it is, I’d question it.”

Nor is Valley Cab’s management impressed--except by the lengths to which its opponents have gone to present their case.

“I’ll bet any survey Snyder does, he probably knows the answer beforehand,” said Tom Hefferan, Valley Cab’s general manager.

The focus group sessions for the Babaeian firm were conducted by a division of Equifax Marketing Services Inc. Equifax Inc., its Atlanta-based parent company, is a marketing and credit information services firm that did more than $840 million of business in 1989.

Louise Kroot-Haukka, an executive at the Van Nuys office of Equifax, said the taxi sessions involved interviews conducted April 29 with two groups, one with 10 men, the other with 10 women.

Kroot-Haukka refused to say how much the Babaeian taxi company paid for the service. However, the minimum charge for a single focus group is $3,500, she said.

The participants expressed “general dissatisfaction” with the taxi service in the Valley, Kroot-Haukka said. Most believed that the Valley did not have enough cabs and that a competing cab company would “provide a significant opportunity and incentive” for Valley Cab to improve its service, she said.

The Babaeian firm’s sales task is a tough one at best.

Approval of three-fourths of the City Council, not a simple majority, is needed for a second taxi franchise. The super-majority is required under the City Charter as the only way to override a city Transportation Commission decision. The commission voted March 28 to not solicit bids for a second franchise.

Even if the second franchise plan is approved Tuesday, it may be months before another firm is selected. There is no guarantee that Babaeian would be awarded a franchise.

Transportation Department staff originally recommended that the commission support a plan to seek a second franchise. Initial tests measuring Valley Cab driver-response time to customer phone orders showed that the company flunked a city standard of arriving at least 76% of the time within 15 minutes.

Later, after concluding that initial results were not valid, officials ran additional tests that showed that Valley Cab came just within the acceptable standard. Based on the favorable results, transportation staff rejected the second-franchise proposal.

Bernson has been the council member most receptive to a second franchise. Last week, Bernson said if more cabs are needed in the Valley, then they should be provided by a second cab company instead of giving Valley Cab authorization to operate more cabs.