Four bills proposed by Sen. Celestino White that would grant local taxi associations 10-year exclusive franchises to run all taxi services at the territory’s sea and air terminals may violate Federal Aviation Authority guidelines.
In a report commissioned by the St. Thomas-St. John Chamber of Commerce, Attorney Adriane Dudley cited Code of Federal Regulations 49 Subtitle A, Subpart E, sec. 23.75, which expressly forbids entities receiving funding through the FAA from entering into exclusive franchises lasting longer than five years.
“Thus the legislation proposed by Sen. White is preempted by Federal law, rules and regulations to which VI Port Authority must adhere as the recipient of FAA funding and … under federal law,” she concluded.
The law does allow for longer agreements if the airport can convince the FAA that “special local circumstances” make them necessary. Sen. White has not made any public comments indicating that this process has occurred.
Email and phone messages left at White’s office seeking further comment had not been returned at the time this article was printed.
Robert O’Connor, chairman of the Virgin Islands Port Authority, agreed with Dudley’s interpretation of the law in an interview Monday and said the conflict was a perfect example of why VIPA should be allowed to manage its own affairs.
O’Connor characterized the bills as an ill-conceived attempt by the Legislature to micromanage the port authority. He went on to argue that the people in the position to make the best choices on behalf of VIPA – as well as to understand the various regulations and responsibilities affecting it – were the members of VIPA’s board of directors.
“If you have a board running an entity, you should let it manage it,” he said.
The bills as written would not only force VIPA to offer 10-year franchises to prescribed taxi associations, they would also establish many of the details of the lease, including the number of taxis that will be present at the facility when a flight lands, the minimum amount of insurance to be carried by every driver, and even the placement of trash receptacles near the taxi stand.
O’Connor said these were things that needed to be negotiated between the port authority and its concessioners, not written into law.
“Let me be clear. The port authority is not against concession,” he said, but then added that VIPA should be in control of defining the terms of any agreement.
O’Connor said he was particularly interested in negotiating customer service standards with the taxi associations. He said the authority has received many complaints about the level of service being offered by the current franchise holders and stated that improving the experience of visitors was one of VIPA’s priorities.
He said any future agreement negotiated between the authority and a taxi association would likely contain language outlining acceptable customer service practices.
White’s bills make no mention of customer service and stipulate that the franchises could only be revoked if the franchise holder became insolvent, abandoned the franchise, violated the terms of the lease, committed a crime, or failed to pay its rent or any fines levied against it.
In testimony given at the hearing for the bills, representatives of the taxi associations argued that concerns over poor customer service were being overblown and that the exclusive franchises were necessary to ensure consistent and orderly taxi service at the airports.
Various entities in the tourism industry, including the St. Thomas-St. John Chamber of Commerce, the Hotel and Tourism Association and the V.I. Department of Tourism, have voiced their objection to the bills, claiming they will undercut competition, raise prices, lower quality and overall make the Virgin Islands a less desirable tourist destination.
They also have claimed that the bills are being rushed through the legislature without receiving a fair hearing.
The bills only received a single committee hearing, rather than the customary two, before being sent before the full Senate for a vote. None of the bills opponents were invited to testify at that hearing.
A final vote on the bills could take place as early as Nov. 19.
Sen. White has defended the bills saying they were necessary to defend the small business owners who operate the taxis from the interests of large hotels, who want to be allowed to offer shuttle service to their guests to and from the airports.
He also said he believed the taxi associations deserved the extended franchises because they have proven themselves excellent tenants of the port authority and have provided quality service to the territory’s visitors.
The bills would assign franchises to the territory’s air and sea terminals as follows: the Henry E. Rohlsen Airport to the St. Croix Taxicab Association, the Austin “Babe” Monsanto Marine Terminal to the St. Thomas Taxi Association, the Urman V. Fredericks Marine Terminal to the East End Taxi Association and the Cyril E. King Airport to the Virgin Islands Taxi Association.
