All Ted Praul wanted to do is start his own taxicab service in the tourist mecca of Myrtle Beach.
He would find out just how hard it would be dealing with city officials.
After working for four years for another taxi company, Praul decided to strike out on his own with his seven-seat, 2004 Dodge Caravan. He obtained a state “Class C” certificate in January for his taxi business, called “Coastal Carriage,” which allows him to operate statewide, but he needed separate approval from the city of Myrtle Beach to pick up riders within the city limits.
That’s where he ran into trouble.
He paid a $500 non-refundable fee to the city to apply for a “certificate of convenience and necessity,” also known as a taxi medallion. He applied for the certificate on Jan. 30; on March 27, the city’s Taxi Hearing Panel rejected his application by a 4-1 vote, Praul said, though they didn’t give him a specific reason.
“I think they do have a cap,” Praul told The Nerve in an interview Tuesday. “They have a total of 185 medallions, and I think that’s all they want to issue.”
Praul said what made the rejection even more puzzling to him was that he wasn’t asking the city to issue an additional certificate, but rather to be given an existing medallion that had been turned back in earlier to the city by another taxi driver.
Contacted this week by The Nerve, city spokesman Mark Kruea denied the city has a quota on the number of taxi drivers, though he didn’t give a specific reason about why Praul’s application was rejected.
“The applicant has the burden of proving that the need for additional service exists,” Kruea said in his email response.
Mary McDowell, the hearing panel chairwoman, declined comment when contacted by The Nerve, referring questions to Kruea.
In rejecting his application, the hearing panel said Praul failed to provide “sufficient information to support the need for a new certificate,” according to a written appeal filed by Praul with the Myrtle Beach City Council.
In his application for a certificate, Praul cited the following reasons: “continued growth in the Grand Strand, along with increases in construction, tourism,” and “increased airliner growth in 2013.”
Praul didn’t have an attorney when he appeared before the Taxi Hearing Panel. He hired Myrtle Beach lawyer Reese Boyd III to represent him in his appeal to City Council.
In his written brief for the appeal, Boyd cited statistics from the Myrtle Beach Area Chamber of Commerce showing that from 2009 through 2012, the projected number of annual visitors to the area grew by 1.5 million, or nearly 11 percent, to 15.2 million. In comparison, from January 2011 through May of this year, the city had issued just three new taxi medallions, he said.
“When compared with the number of visitors coming to Myrtle Beach annually, it is clear that the growth of our number of taxi service providers has failed to keep pace with the increasing number of visitors coming to Myrtle Beach,” Boyd wrote.
Boyd also wrote that Praul “should be able to obtain a permit for his own entry-level taxicab business without regard to how many other such permits exist,” adding that the city’s “anti-competitive cap … arbitrarily limits economic liberty and therefore violates the U.S. and State constitutional guarantees of due process and equal protection.”
City Council was ultimately persuaded, voting 7-0 on June 10 – more than four months after Praul initially applied for a city certificate – to approve the certificate, according to minutes of the meeting.
“The taxi drivers came out in numbers to oppose our appeal,” Boyd told The Nerve. “And they also were harping about the looming threat of Uber.”
The Nerve since last month has reported about the legal controversy involving the San Francisco-based Uber, a popular ridesharing service that relies on a smartphone app, and S.C. regulators and local government officials. The company announced on July 10 that it was launching its UberX service that day in Myrtle Beach, Charleston, Columbia and Greenville.
Asked by The Nerve if the launch of Uber in Myrtle Beach will put more pressure on the city’s Taxicab Hearing Panel to issue fewer certificates to new taxi drivers, Kruea said in his email response: “No. Applicants for new certificates must show that the additional service is needed to enhance the public welfare. It may cause an increase in requests, though.”
Boyd told The Nerve although he understands the need for certain regulations for city taxi drivers, “the whole (application) process is subject to a certain amount of subjectivity.”
“The market is much better suited to determining what taxis are needed,” he said. “I’m not saying anyone should be able to park a Crown Victoria on a corner and slap a taxi sign on it, but there has to be some balance.”
Praul agreed.
“It makes it tough to start a business if the regulations go too far,” he said, noting, “All I wanted was something to start my own business.”
Reach Brundrett at (803) 254-4411 or rick@thenerve.org. Follow him on Twitter @thenerve_rick. Follow The Nerve on Facebook and Twitter @thenervesc.