L.A. to Seek 2nd Valley Cab Service : Transportation: The council votes to accept bids. Even after the proposals are submitted, officials could decide not to award a new franchise.

The Los Angeles City Council, lobbied hard by a Burbank taxi firm, took the first step Tuesday toward authorizing a second cab company to operate in the San Fernando Valley.

Rejecting advice from the city’s transportation bureaucracy, the council voted to seek bids from taxi firms for a Valley franchise. Members argued that competition would improve service. Valley Cab Co. has had a monopoly in the area since 1984.

The council had been strongly lobbied to open up Valley business by the Babaeian Cab Co., but there is no guarantee the firm will win the franchise, which is likely to attract several bidders.

Nor did Tuesday’s action make it inevitable that a second franchise will be awarded. Even after bids are submitted, the city could opt to stick with the status quo, city officials noted.

The city’s Transportation Commission and Department of Transportation staff had recommended that Valley Cab’s monopoly not be disturbed, at least for the time being. Two companies will result in “cutthroat competition” that could result in poorer service to customers, a transportation department executive warned the council.

The competition would not be reflected in fares--which are established by the city--but on the basis of response times, cleanliness and comfort of cabs and other customer amenities.

Masood Babaeian, the Babaeian firm’s president, said he would quickly submit a bid to operate a second franchise. Transportation department officials said they expect bids to be accepted by the city during a one-month period, probably ending in late July.

Babaeian, whose firm now owns all cabs operating in Glendale, Burbank and Pasadena, also said in an interview that there is sufficient demand for cabs in the Valley to support two companies. But he added, “I wouldn’t be surprised if Valley Cab goes out of business” if the two firms compete.

Valley Cab General Manager Thomas Hefferan did not return a reporter’s phone calls.

Babaeian’s campaign to break the Valley Cab monopoly included using focus groups to test consumer interest in cab service, hiring ex-councilman Art Snyder’s law firm to lead the lobbying assault and bringing two busloads of senior citizen cab backers to City Hall on Tuesday.

Sally Kaufman of Sherman Oaks was one of 50 senior citizens brought to City Hall by Babaeian and sporting “More Cabs for SF Valley” stickers on their shirts and blouses. “We need more cabs,” said Kaufman, who added that she was asked at a city senior citizens center by a Babaeian marketing representative to join the call for more cabs.

The presence of senior citizens was a telling point for several lawmakers, including Councilwoman Joy Picus, who predicted an “enormous” jump in demand for cab service in the Valley when a new city program takes effect that will subsidize cabs for the elderly in addition to the city’s existing dial-a-ride program.

“We need competition to get the best service possible,” added Councilman Hal Bernson, an early supporter of the plan for a second franchise.

Councilman Zev Yaroslavsky said that “believe it or not” his office gets a “tremendous number of complaints” about cab service from his Valley constituents. “That tells me something--that something is amiss,” Yaroslavsky said.

Despite the repeated tributes paid by council members to the value of competition, Department of Transportation officials warned that competition might be ruinous. Insufficient demand now exists in the Valley to support two companies, department executive Tom Conner testified.

“We are concerned with flooding the market with so many cabs that it becomes such cutthroat competition that the companies start cutting corners,” Conner told the council. Such bitter competition could mean the firms will start hiring less qualified, lower-paid drivers, Conner said.

The history of taxi service in the Valley prior to 1984 was of competing cab companies fighting so hard for the area’s small market that inevitably only one company survived, Conner recalled. “The cycle could repeat itself,” he said.

But the prospect of such deadly competition did not faze Councilman Joel Wachs. “If only one survives, it’ll be the best one,” Wachs said.

While it has been fashionable to criticize Valley Cab, in fact the company is not so bad, Conner said.

Valley Cab--one of eight companies licensed by the city--performs “about average” on service tests conducted by the transportation department to measure how fast the taxi firms answer customer calls, Conner said. The firm attracts an average number of customer complaints, and it has a “better than average” record of complying with department cab rules, he said.

At best, the council should wait several months before deciding to seek a second franchise, Conner said. By then, his department will have the results of a survey of senior citizen transit needs that should provide a better picture of whether there may be enough new demand for cab services in the Valley to justify a second franchise, he said.