MEETING DATE:
JUNE 26, 2018
SUBJECT:
Title
ORDINANCE NO. 2018-1466 - AMENDING SECTION 5.48.040 OF THE SAN MARCOS MUNICIPAL CODE RELATING TO TAXICAB INSURANCE
Body
Recommendation
Recommendation
APPROVE first reading of an ordinance amending Section 5.48.040 of the San Marcos Municipal Code relating to taxicab insurance.
Body
Board or Commission Action
Not applicable
Relevant Council Strategic Theme
Not applicable
Relevant Department Goal
Not applicable
Executive Summary
The City of San Marcos regulates taxicab companies operating within the city limits. Currently, only one provider, North County Transportation Services (dba “Yellow Cab”) serves San Marcos. Within the last few months, several local agencies have reduced the automobile liability insurance limits for taxicab companies from $1 million to $350,000 combined single limit. The purpose of the reduction is to help taxis better compete with app-based ride-hailing companies.
Discussion
The taxicab market has undergone significant changes in the last few years and it has faced increased competition from companies like Uber and Lyft. As a result of a recent state law, drivers for those ride-hailing companies are only required to maintain the California minimum for personal insurance coverage when their app is turned off, and must only cover low-level commercial insurance ($50,000/$100,000/$30,000) when the app is turned on.
The City of San Marcos increased the automobile liability insurance limits for taxis in 2009 to $1 million in part to stay consistent with surrounding communities. Beginning this year, a large number of area communities have reduced taxis’ automobile liability insurance levels to $350,000 including: San Diego County (unincorporated areas), Vista, Escondido, Oceanside, and the San Diego Metropolitan Transit System that regulates taxis for the cities of El Cajon, Imperial Beach, Lemon Grove, National City, Poway, San Diego, and Santee.
To maintain consistency with the County and area cities, staff recommends the adoption of the attached ordinance, amending San Marcos Municipal Code 5.48.040, to decrease the automobile combined single limit insurance requirements for taxicabs operating within San Marcos from $1 million to $350,000. This proposal makes no changes to the City’s requirements for taxi companies’ general liability or workers’ compensation insurance.
The purpose of the reduction is to help maintain the financial market for taxicab operators, while still ensuring that insurance levels are at a level that mitigates risk and safety concerns. It is estimated that the decrease could reduce insurance premiums by 30 percent or more.
Environmental Review
There is no environmental impact.
Fiscal Impact
There is no fiscal impact.
Attachment(s)
Ordinance
Prepared by: Michael Gordon, Administrative Services Manager
Reviewed by: Helen Holmes Peak, City Attorney
Approved by: Jack Griffin, City Manager