The East Lansing taxi cab business, which has boomed over the last few years, now might have expanded past its peak and is slated for review by the city once students descend on campus in two weeks.
City officials are considering regulating the industry more heavily, capping the number of licenses issued to avoid further problems on the street.
But even as the city explores these measures, the industry might also have reached its point of saturation.
In June, the East Lansing City Council reviewed the 2011 Taxi Cab Licenses Status Report, which shows an explosion of the number of taxi cabs in the last several years — from eight active licensed vehicles in 2005 to a high of 122 this year.
But it also shows a significant drop in the number of taxi cab drivers from a year ago: 98, a loss of roughly a third — meaning there are a few less actual cabs on the street at once.
“In a down economy, I think people think of it as a way to earn some money,” Director of Planning and Community Development Tim Dempsey said, adding the city saw steady growth in the number of cabs the last few years, but sees companies are scaling back. “I think as they get into the business, people realized it’s more difficult in practice than in theory.”
This fall, the city is slated to conduct a survey with a variety of student groups to determine if the council should cap the number of taxi licenses, City Clerk Nicole Evans told the council in June.
Currently, there are 28 licensed taxi services in the city of East Lansing.
So many options compared to years past, in fact, that Chuck Maka, Manager of L-Town Cab, recently decided the East Lansing market isn’t worth it.
The company still is licensed in East Lansing, but their drivers try to steer clear of the suburb, focusing on other parts of Greater Lansing as their primary income source.
Though the market here can be profitable, Maka said the downtown atmosphere is too chaotic — dozens of taxis clogging the streets, taking every taxi stand near the bars.
Brad Lentz, co-owner of Shaggin’ Wagon Taxi, attributes the drop to a market flood: There are so many taxis now that some can’t get a big enough slice of post-bar pie.
“It’s been dropping down lately because there’s less money for everyone,” Lentz said. “It’s not the cash cow it used to be.”
Years ago, when there were only a handful of taxi services, Lentz heard tales of drivers making as much as $1,000 per night.
But times have changed. Lentz said Shaggin’ Wagon survives because it has built a consistent customer base, and it is one of a few services that employs enough drivers to run a 24-hour service.
Some have survived through other forms of innovation.
David Thorin, owner of Spar-Thai, developed a business model that gets around the competition — literally. His electric-powered bike pedicab service was one of three new companies this year trying to tap the market. It has made a surplus of profits during events such as the East Lansing Art Festival and U2 concert in June, where streets are closed or clogged, and parking is tight.
Spar-Thai’s service targets people traveling short distances within the city and on campus.
“We’re kind of a different animal,” Thorin said. “We definitely move people from point A to point B, but we’re definitely in the fun business.”
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