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- - --- e be substantially lower. Licensing procedures and fees would be established by Administrative Rule after ordinance adoption. An additional opportunity for public comment would be allowed at that time. In response to a question from Ms. Bascom, Ms. Utecht commented that it is difficult to establish criteria for rate setting without some previous expe- rience with the system. For this reason, the ordinance provides authority for rates to be established through Administrative Rule at some point in the future if the City determines rates are necessary. Responding to another question from Ms. Bascom, Ms. Utecht said that the proposed licensing procedures have been successfully used in other cities. If at some time in the future there is not an adequate number of companies to handle community demand, the ordinance allows for additional licenses with a "Public Convenience and Necessity" provision. Mr. Boles noted that as with other overhead expenses, increased driver certi- fication costs would likely be passed on to the consumer and asked for staff's rationale behind the recommendation not to set driver certification fees at 100 percent of the cost. In response, Ms. Utecht indicated the only way to pass the cost of driver certification on to the customer would be to have companies, rather than individual drivers pay the certification fees. She said that because of the transient nature of employment in this business, companies would not likely be willing to pay these costs and the industry has expressed concern that cost burden would be too great for drivers to bear alone. e Mr. Nicholson asked what public benefit is gained by restricting competition in the public passenger industry by placing a cap on the number of vehicles. In response, Ms. Utecht explained that as the degree of competition rises in an industry of this nature, the quality of service often declines. Staff was concerned that companies in this position might employ dangerous cost-cutting strategies such as skimping on vehicle inspections. Clearly such practices endanger public safety. Mr. Gleason said in his experience with the taxi industry business, controlled market entry has been beneficial in limiting such problems. Ms. Ehrman noted that staffing costs would likely increase with this regula- tion system and asked whether these increased costs have been accounted for in the rate determination. In response, Ms. Utecht said that monitoring costs have been included, enforcement costs have not. Responding to another question from Ms. Ehrman, Ms. Utecht said that it is difficult to tell how many companies will be licensed in the city because of the number of sole proprietorships which currently exist. She estimated that the number might total five or six companies. At the time of industry dereg- ulation five years ago, three companies were operating in Eugene. Mr. Green asked whether operators of horse-drawn vehicles would be required to demonstrate that they are able to handle their animals safely in order to have a permit. In response, Ms. Utecht said that only one such company oper- e MINUTES--Eugene City Council December 10, 1990 Page 3