OCTA Board Revokes Permits of Taxi Firm

The Orange County Transportation Authority board voted Monday to yank the permits of 100 taxicabs whose owner is inadequately insured--a lapse officials claim could potentially leave passengers uncovered if they were injured in a crash.

The action, prompted by a recent audit of cab companies operating in the county, focuses on A Taxi Cab of Santa Ana. It also overturns a decision by the Orange County Taxi Administration Program, which previously had given the company a month to fix the problem.

Monday’s decision, according to some officials, comes in response to lax oversight of taxicab companies, and prompted OCTA Director and Orange County Supervisor Todd Spitzer to characterize the taxi administration program as “organizationally dysfunctional.” The OCTA’s vote also promises to add fuel to a legal dispute between the county and the owner of A Taxi Cab, who contends he was unfairly deprived of a lucrative taxi service contract at John Wayne Airport this year.

Shortly after he was told Monday to change his company’s insurance policy or shut down operations, A Taxi Cab owner Hossein Nabati said he would attempt to make the necessary changes by that afternoon, but he also planned to fight the decision in court.

“They are doing this to me personally,” Nabati said. “First they take away my airport contract and now this. They’re trying to push me out of business because I’ve got a lawsuit going on.”

The flap centers on a government requirement that cab companies buy $1 million in insurance in order to receive a permit. Although A Taxi Cab meets that requirement, the company is self-insured for passenger injury claims for up to $100,000. County transportation officials say this violates both state law and county permitting requirements.

Although Nabati insists his self-insurance is adequate for all reasonable claims, OCTA officials say passengers stand the risk of not being compensated for injuries. Vacation and business travelers were most vulnerable, Spitzer said.

Alleged problems with A Taxi Cab’s insurance, as well as the insurance policies of other cab companies, came to light in March, when officials at John Wayne Airport began reviewing permitting materials for the cab company’s contract. Although airport officials initially renewed the contract, which A Taxi Cab had held for four years, county supervisors learned of the insurance problem and instead gave it to another firm--a move that prompted Nabati to file suit.

Prompted in part by the ensuing controversy, the taxi administration program began an audit of insurance policies held by all 21 companies it oversees. That audit found that eight of those companies had failed to comply with insurance requirements. Of the eight, five had insurance policies with varying levels of deductibles, while three had self-insurance arrangements.

In an effort to correct the problem, the taxi administration program sent out a letter June 15 giving violators a month to meet its insurance requirements. On Monday, OCTA officials said all but A Taxi Cab had come into compliance.

OCTA Director Tim Keenan, who cast the only vote against pulling A Taxi Cab’s permits, argued that the county should honor the one-month deadline.

The taxi administration program, created about three years ago, is charged with permitting all of the county’s 701 cabs and monitoring potentially illegal activities. It operates on an annual budget of roughly $200,000.

In a memo to OCTA officials, program officials said the taxi insurance problem went unnoticed for years because the documents used to confirm coverage don’t show complete details of the policy. Spitzer is pressing for a wholesale review of the taxi administration program and urged fellow OTCA board members to take a larger role in its operation.

Nabati lamented Monday that he was one of the cab owners who first lobbied for the creation of such an organization. Before its creation, cab companies were forced to get separate permits from each city in the county. Nabati and others had said the project would cut down on bureaucracy.

“Look at this,” he said. “Now it’s coming back to haunt me.”