In NYC, Many Layers of the Taxi Cab Rip-Off — Procurement and Beyond

I often warn Chicago visitors about how bad many of our cabbies are. From the typical, filthy old police vehicles not worth the whole fare it would cost to drive to a distant suburb to the creative routing that can tack on more than a mile to the fare, the Chicago taxi experience leaves much to be desired. I had one particular gem of a racist jerk the other day that insisted on telling me "All Arabs are filth and rotten dogs" as a happy-looking Muslim family crossed the street downtown. Yet NYC cabs (and cabbies) don't have a much better reputation. This perhaps explains why the city is going to tender on behalf of the companies and drivers and bring in a new fleet of vehicles that will showcase unique, purpose-built design. Sound smart? I'd most certainly welcome this approach in Chicago. But I'd hope our new Mayor would take a smarter procurement strategy than NYC is taking. Charles Dominick recently penned a great piece on the subject over on his blog.

In it, he outlines the selection criteria that NYC took as part of the procurement process for a new citywide taxi vehicle selection process, citing a press release on the topic. The announcement notes that evaluators in the tendering process considered two main criteria: "the organizational capability of the proposer and relevant experience of the proposer" and "the proposed vehicles' safety, ergonomics, average cost to the taxi industry to purchase and total lifecycle costs to operate the vehicle as a taxi, internal air/environmental quality (HVAC), overall ride quality (noise or vibration), the vehicle durability, the design elements, and warranty and service provision, as well as proposers' plans for stakeholder outreach to help provide input on the final design."

This all sounds quite reasonable for an RFP process. But it appears that the city might have made a serious negotiation mistake when it came to picking the victor by putting the trunk before the hood, so to speak. To wit, the city announced the winner (Nissan) before final contract negotiations. As Charles opines, "it is almost impossible to negotiate with a supplier who thinks that they have the deal in their pocket. NYC didn't just create the perception that Nissan is a front-runner. They held a freakin' press conference in which the mayor told the entire country that Nissan won the business!"

Perhaps it's not surprising that the cost of income taxes in NYC (state and local) are among the highest in the country what with the city showing such a great track record in tenders such as this. Of course, Chicago would welcome those migrants from the Big Apple with open arms if they get too fed up at the cost of living -- and poor procurement processes -- at home. Personally, I'm betting the Rahm administration will take a much harder look at reforming procurement than Mayor Bloomberg ever did in NYC where the whole process feels like a means of driving press releases than securing the best deals for its citizens.

Jason Busch

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