Thread: City Owned Taxi's: Friend, Foe, or Folly...

Back on August 13, the Kokomo Tribune announced local government plans to develop and operate a government taxi-cab service - displacing private business that already provides public-assistance transportation throughout Howard County.

Friend?

NIK requested, and quickly received, quite a lot of information regarding the City's Proposals and planning in this venture.

Mr. Larry Ives, Director of the Kokomo / Howard County Governmental Coordinating Council answered our questions (Thanks to him for his candor and cooperation!):

We asked where the subsidy money goes in the current First City Rider program, and who pays for what...

Mr. Ives replied:

When a patron contacts our provider, now Rhino Taxicab, they book a ride and we pay a subsidy depending on the status of the rider. The subsidy could be as little as $3.00 per rider or up to $21.00, depending on their status, basic, handicapped, or special. Additional costs are paid by the patron to the provider. If KATS becomes the provider, the patron's share, approximately $300,000 per year would be paid to KATS for operating expenses. The patron's share is sometimes prohibitive for riders and therefore they can not use our program. We hope to reduce the patron's share significantly with lower costs in the operation of KATS..........this will be determined as revenues are evaluated.......the current proposal cites current costs, not projections with savings.

We asked about records concerning the current taxi provider, and how well the service was performed...

Mr. Ives replied:

As to whether the existing provider could continue to provide the service, there are considerable doubts based on past performance in the last 3 months. For instance, since June 1, 2009, the provider has a total trip count for FCR of 13,970 of which 1,897 (13.5%)we early pick-ups, 8,046 (57%) we on time (meaning within 15 minutes before or after the requested pick-up time), and 4,027 (29%) were late (8% were more than 30 minutes late). These late pick-ups are a continual problem for the patrons who rely on rides to work and other important appointments. Add the several complaints from patrons on driver and dispatcher courtesy, dirty vehicles, and lack of professionalism, we seriously doubt the quality of their performance.

We asked whether other private providers were available in Kokomo / Howard County that could replace Rhino, if necessary...

Mr. Ives replied:

As to other providers, there are no other providers in Kokomo capable of providing the amount of trips required for the subsidized program. More importantly, public transportation, like police, fire, street, and sanitation services are best provided by the government entity and not subject to the uncertainty of private companies.

Finally, we asked if there were other uses for Kokomo's ARRA (American Reinvestment Recovery Act, or 'federal stimulus') funds...

Mr. Ives replied:

Use of ARRA funds: The funds must be used for public transportation purposes only. No other projects are planned that would qualify for their use.

Ives also provided NIK with a copy of the Business Plan for the newly-proposed governmental program called K.A.T.S. (Kokomo Area Transit Service). You can download a copy by clicking here.

After reviewing the Plan, we had some more questions... which Mr. Ives also answered.

We asked why a 'public' transportation system owned and operated by governmental agencies is a better choice than a privately-contracted system...

Mr. Ives made this observation:

Over 90% of the public transportation services in the US are operated by a public agency. Ours should be too.

We asked why the administrative costs were so high in relation to what is spent actually providing the services...

Mr. Ives replied:

Administrative cost can not be evaluated without knowing what they include. In our case, those costs also include writing the FTA 5307 grant application, execution of the grant, quarterly and yearly reports, filing the National Transit Database report (about 27 pages), and preparing for audits by the State Board of Accounts, and a triennial review by the FTA. All of this takes a lot of time and personnel, you don't get that kind of money from the federal government without a lot of red tape.

We asked what would happen to this program once federal funding runs out...

Mr. Ives replied:

At this time the funding for 5307 in reauthorization seems to be increasing........ every transit agency in America would go under without 5307 funding.

We finally asked if Ives had any data that would demonstrate that Rhino cab is later or earlier than any other cab company or governmental service..

Mr. Ives replied:

First of all, there is no data for the KHCGCC, only Rhino's, and they should be at a 5% or less late rate to be acceptable. According to the FTA, anything over 15 minutes is considered a denial an that rate shoulc be less than 5%.

Mr. Ives believes this service would best be provided by the government... that First City Rider would become less expensive, higher quality, and more responsive.

Foe?

On August 14, I posted a message on the Kokomo Tribune's Forum, Tribtalk, asking for comments regarding the proposal to do away with Rhino and start a government service.

You can find that thread by clicking here.


In a nutshell, I received over 300 replies to our NotInKokomo email. A quick review indicated none of those who responded would be pleased with a switch in providers.

About 72 percent are current First City Rider recipients, while the rest are simply customers of Rhino Cab.

There were several dozen heart-warming stories whose central theme indicated just how far Rhino drivers go to assist the elderly, poor, and sick. This company has a demonstrated, considerable amount of loyalty from the very people who use the program consistently.

Mr. Ives himself wrote a grateful letter of support for the company to the Kokomo Tribune upon the founder's death last May. Click here.

Before going any further, I'd like to tell you what the history of this company is...

Steve "Rhino" Wisehart retired from Delco in 1980 and began to try his spare time in many endeavors. Steve's Dad was a dispatcher for Kokomo's City Cab, and Rhino drove for City Cab quite a long time.

Folks who had the pleasure of riding with 'Rhino' in a City Cab still tell stories about what a caring man he was.



Steve eventually found a business in which he could both be successful and happy... Rhino's Cab.

One emailer told it like this:

He loved to drive a cab... and got a thrill out of helping someone. It didn't even have to be a person he knew. Owning and operating his own cab company fulfilled that need for him. He was finally able to own his own business, be his own boss and he could give people jobs and he still got to drive a cab whenever he wanted!

In his mind, it was the best of all possibilities!! He put his heart into that business. He felt that it honored his father's memory and served a need in the community. He didn't just open it and walk away. He spent most of every day in the office or in a cab. He loved it. He was proud of it and proud that he would be leaving something he thought of as so valuable to his community and his family.

He would have been tickled to death if it had made him a multi-millionaire. It didn't and he was just as happy. He ran that business from his heart not from a balance sheet.

From the email I've received, it looks very likely Steve's family is continuing his tradition of serving the Community well.

Folly?


In the government business plan, many questions remain.

For the money details, scroll directly to page 8.

We had five banking professionals and two wealthy investors (two bankers who are supposed to be transportation experts) review this 'plan'.

In all seven reviews, the City's plan would not stand up to the scrutiny of private (rather than government) funding.

Expert comments included:

Lack of sufficient maintenance costs being included. (The transportation folks say current wisdom is that AT LEAST $2,000 will be spent per vehicle after 1 year of service).

Lack of sufficient equipment and personnel. Rhino currently utilizes nearly twice as many vehicles in their fleet (19 vs. 10 in the City plan), and triple the driver-hours (1,500 versus 525 in the City plan). None of our experts could fathom how a company might provide better service with so fewer resources. One expert modeled the data and told us "Rhino currently has about 34 minutes of driver resources per trip. The City Plan would allocate only 11. How can an organization expect to perform 13,790 trips (** data Mr. Ives gave us on utilization from June 1 to August 19**) and only spend 11 minutes on average per trip?"

Woefully underestimated fuel costs. Experts say that making assumptions that the price of gasoline will not vary over three years is the type of error made by many novice business-people new to the transportation industry. "Fuel costs are the largest single operating expense a transportation company has. This plan, which arbitrarily throws around the $100,000 per year figure, is simply fiction or wishful thinking."

Lack of sufficient planning regarding building operation and maintenance. Our experts claim that spending only $10,000 to operate and maintain an $800,000 building is ludicrous. "I certainly wouldn't finance a building of that value which the business only plans to spend $10k a year heating, cooling, lighting and maintaining. If someone only spent that... the property would be trashed in just a few years."

Lack of Insurance cost risk-analysis. All of our experts realized the City is self-insured, and therefore the cost of vehicle insurance is easily overlooked. In this case, however, they were flabbergasted to see there was no cost or associated risk in the business plan AT ALL. The transportation specialists told us taxis are among the highest-loss vehicles in the transport sector... much higher than even police cars or fire trucks. They explained that's simply because there are generally more cabs on the road, and the drivers certainly aren't as well-trained as police officers or firefighters. The issue of huge liability exposure also made them wonder why there is NO cost in the government business plan for insurance.

In short, our 'experts' qualified this 'plan' as 'amateur-ish' and 'way, way too optimistic'.

The best quote from one banker... "Only the government would fund such a folly".

So now you know a lot more about this issue.

There are supposedly two public meetings scheduled for review and public comment.

Wednesday, September 2, 9:30 AM, Howard County Government Center, 120 East Mulberry. Click for map.

Thursday, September 3, 2:00 PM, Kokomo City Hall, 100 South Union, Kokomo. Click for map.

NIK

So the funding ends at a later date.

Unsustainable.

What unbelievable arrogance.

Sounds like this plan is full of holes, just like the annexation is.

So....basically the city waited until...immediately after the funeral to try to grab the cab company?? Why does this not surprise me????

My question is...why NOT before the death of Rhino?

Why is Kokomo being lead by people with no understanding of how business is run. Did they all come from a government funded not for profit background. They seem to make decisions based on the opposite of common sense and neglect anything the voters ask for.

Sooner or later voters will stop believing that politicians really have their best interest at heart and will actually listen to what they say compared to plain old common sense.

Everything they government spends comes from us first.

Originally Posted by MaybeTomorrow

My question is...why NOT before the death of Rhino?

Because then they would have had Rhino to answer to....and he knew the cab business inside and out. Our beloved city is counting on the family members to not know everything Steve did.......In my opinion.

It sure sounds like the least experienced at Rhino has more experience than anyone at the city and county level.

Does it seem odd to anyone that the next morning after I post a link to this article at the Kokomo Tribune's forum I was banned from the site and most of my posts deleted?

In four years, I've probably posted more than a hundred links on Tribtalk for reporting I've done here.

Is it just a coincidence this is the topic some would prefer not to be discussed?

I wonder....

NIK

The Tribune seems to be the poster child for Politically Correct speak. They do not offend anyone that may hold influence in this area. They certainly do not offend any of the stronger politicians. When they don't have what it takes to answer my e-mail inquiry, it says, to me, they avoid controversy at all cost.

Some days I read more actual news in a church bulletin than in the newspaper.