Taxis in Colorado operate under a broken regulatory system that serves cab companies - not the public or cab drivers, former state regulators testified Thursday.

"The cab companies have a great deal going," Ray Gifford, a former state Public Utilities Commission chairman, told the House transportation committee. "They get to take all the producer surplus from the drivers and they have an entry barrier to all new entrants" in the market, creating a virtual monopoly, he said.

"But for the public and the drivers, it is the worst of all worlds right now," he added.

That's because cab firms, which are guaranteed income from leases and other fees paid by independent-contractor drivers, have no financial incentive to serve the disabled, elderly and other low-paying short-trip passengers, according to Gifford and others.

House Bill 1114, which calls for unlimited certification of new cab firms to spur competition, won approval in the House Transportation and Energy Committee by a 10-2 vote Thursday.

In nearly four hours of testimony, legislators and witnesses referred to a series of Rocky Mountain News stories told by disabled residents, seniors and even revelers trying to avoid drinking and driving. They complained that cabs often take hours to arrive - if they show up at all - while dispatchers keep making excuses.

Lawmakers heard testimony of abuse and exploitation from some of the nearly 300 African immigrant cabbies packing the old Supreme Court chambers in support of HB 1114.

"Some drivers have been physically and mentally abused by a general manager at one of the local cab companies," said Abdi Buni, the president-elect of Pro Taxi, a drivers-rights alliance with 400 members started in 2003. He said immigrant drivers work an average of 12-to-16 hours daily, mostly to pay for company leases of as much as $500 a week and service fees charged when passengers pay with credit cards.

But other witnesses pointed out that drivers aren't totally innocent, either.

Desperate to "cherry pick" the most lucrative fares, some of them at times simply duck dispatches for short trips that pay less, the critics said.

"As independent contractors, (cabbies) cannot be ordered to pick up a fare," Gifford said. "So the cab companies have no authority to make them take an unattractive fare."

Cab company officials denied any knowledge of driver abuse, to the astonished laughter of cabbies in the audience.

Diane King, a civil rights attorney who said she is exploring legal action against a Denver taxi firm, described "inhumane" treatment in which drivers have been physically assaulted and taunted with racial slurs. She said drivers have said the treatment includes being "called a dumb African and being called the N-word."

"The passage of this legislation would give taxi drivers an opportunity to live the American dream that has only seemed to elude them so far," Buni said.

Sponsored by Rep. Jerry Frangas, D-Denver, the bill would wipe out PUC rules that make it "practically impossible" for new start-ups to win a taxi certificate in the face of monied opposition from the three existing cab companies in the metro-area market, according to Gifford and former PUC Chairman Greg Sopkin.

But Denver Yellow Cab President Brad Whittle warned that 21 U.S. cities experimented with taxi deregulation in recent decades, only to reverse course after facing "absolute chaos" as a flood of new cabs spawned rising prices and deteriorating service.

Yellow Cab provides special driver training for aiding disabled passengers, and more than 5 percent of its fleet is customized for wheelchair access, Whittle and the firm's lobbyist said. Yellow Cab also uses satellite-tracking of cabs to ensure prompt and reliable service.

But Whittle cautioned that the bill's partial deregulation could result in firms no longer providing service to the disabled community, which is often unprofitable.

"Deregulation has not worked," Whittle said. "Colorado is counting on travel and tourism, including the Democratic National Convention for 2008. We should not make a shortsighted mistake that would harm (tourism service) in Denver."

Complaints

• Complaints about cab service can be registered with the state Public Utilities Commission. Call 303-894-2070 or e-mail the agency's Citizen Advocate at edo@dora.state.co.us

• State rules: Cab companies face fines if they fail to pick up a passenger within 45 minutes in a 10-mile radius of the firm's terminal face. For a pickup outside the 10-mile radius, the 45-minute deadline is increased four minutes for each mile over 10.

• House Bill 1114 pushes for tougher sanctions and partial deregulation to encourage greater competition and improve customer service.

gathrighta@RockyMountainNews.com or 303-954-5486