Council Committee Urges Award of 2nd Taxi Franchise

The Los Angeles City Council’s Transportation Committee recommended Wednesday awarding a second taxi franchise in the San Fernando Valley to a Burbank-based firm, despite questions raised by a citizens panel about the company’s financial strength.

The recommendation to award the franchise to Babaeian Transportation Co. came after some experts have said there is not enough business in the Valley to support another taxi franchise. Critics also have charged that the firm’s campaign donations to key council members may be influencing the award process.

New questions about Babaeian’s financial resources were raised by members of the Transportation Commission, a citizens panel appointed by the mayor. Two weeks ago, the commission delayed a decision on awarding the franchise, saying it needed more time to study whether Babaeian has the money to provide the Valleywide service that the company promised.

But Councilman Nate Holden, chairman of the Transportation Committee, decided last week that the process had dragged on too long and that the question of who should get the taxi franchise should come before the council committee.

While the committee recommended Wednesday on a 2-0 vote by Holden and Councilman Hal Bernson that Babaeian be awarded the franchise, it agreed that the matter would not go before the City Council for final approval until the Transportation Commission meets again on Feb. 11 to discuss Babaeian’s finances. That panel has no authority to stop the award, however.

A Holden representative said the council will probably take up the issue on Feb. 18, at which time they could award the franchise.

City transportation officials said the committee’s decision Wednesday was unusual because such transportation issues normally are acted upon by the citizens panel and then the Transportation Committee before they are considered by the entire City Council for a final decision.

The second franchise was requested in June by the City Council to improve taxi service in the Valley and to provide competition for Valley Cab Co., which has had an exclusive city franchise in the Valley since 1984.

Babaeian operates about 100 cabs in Glendale, Burbank and Pasadena. To meet the new obligations of the new contract, the company would be expected to add about 85 cabs.

The only person to speak Wednesday against Babaeian was David Shapiro, who owns and drives a cab with United Independent Taxi, a group of about 400 independent taxi drivers operating primarily in the downtown area.

Shapiro charged that the committee had given preferential treatment to Babaeian because the company has hired the influential law firm of former Councilman Art Snyder to lobby on its behalf at City Hall. Shapiro indicated that his group is interested in obtaining the franchise.

Holden angrily denied the charge. “Art Snyder doesn’t run Nate Holden,” he said. “It has nothing to do with Art Snyder.”

In an interview last week, Valley Cab President Lloyd Conway made similar remarks, charging that Babaeian has been favored by the city because the company has made large campaign contributions to council members.

Campaign records show that Masood Babaeian, the company’s owner, and his brother, Mahmood Babaeian, donated $10,000 to Holden between 1988 and 1990.

A spokeswoman for Holden rejected Conway’s allegation, saying Valley Cab and Babaeian have received equal consideration. “For Valley to say that Babaeian got preferential treatment, I just don’t think that’s true,” said Phyllis Moats, Holden’s transportation deputy.

Also sitting on the Transportation Committee is Councilwoman Joan Milke Flores. Because of a scheduling conflict, Flores left the meeting before a decision on the franchise was reached.

As a condition of the franchise, Holden and Bernson required Babaeian to put aside enough money to guarantee that the company will provide the service promised as well as adequate insurance.

“If they don’t meet the terms of the franchise, they are going to get the franchise yanked,” Bernson said. “I don’t care who they are.”

Babaeian attorney Gilbert M. Archuletta Jr. said the company is willing to put $200,000 into a trust account to guarantee the city that it has the money to fund operations in the Valley.

Wednesday’s meeting was the latest episode in a two-year territorial battle between Valley Cab and Babaeian.

The Transportation Commission and the Transportation Department concluded last year that there was not enough business in the Valley to support a second taxi franchise. Nonetheless, the City Council, lobbied hard by Snyder’s firm, agreed in June, 1991, to seek bids for a second cab company.

The commission has met only once to discuss whether to award the franchise to Babaeian, but it has met several times since September, 1990, to consider the question of whether a second franchise should be awarded at all.