A TAXI-ING DILEMMA; LIFE GETS TOUGHER FOR CABBIES IN L.A., WHERE COMPETITION ALREADY IS FIERCE AND MORE HACKS ARE ON THE WAY.

Byline: Deborah Adamson Daily News Staff Writer

Early one recent Sunday, at a time when churchgoers seem to be the only people awake, a green taxicab and a red taxicab quickly passed each other on Roscoe Boulevard. One cab ferried a family of four.

Cabs are a common sight in New York City. But Los Angeles?

Yes, indeed. In this sprawling metropolis of car lovers, where driving is as common as breathing, the taxicab is growing in popularity. They fill the need for immediate, easy travel in a city without an efficient transportation system.

Since 1991, the number of cabs operating legally in Los Angeles has risen by 48 percent to 1,935. The number of cabs that patrol the San Fernando Valley has almost doubled in that time to 181 taxis, according to the Los Angeles Department of Transportation.

And more taxicabs are coming: The City Council recently decided to allow an 11th cab operator in Los Angeles. The bidding process will start soon.

The reasons behind this growth are as complex as the freeway system that carves up the city.

To be sure, an estimated 25 percent increase in demand from 1991 to 1997 from travelers and other sources has fueled some of the expansion. City ride programs that give vouchers to seniors, the disabled and the poor also give cab companies plenty of business. And so do hospital patients and people who have too much to drink.

The increased demand has led to cab companies sending out the maximum number of taxis they are permitted, when only a few years ago they were sending out a small percentage of the number of cabs allowed by the city.

In addition, illegal cabbies - known as bandit cabs - are crowding the streets, meaning the city probably has 4,000 taxis, not the 1,935 that is its official count.

With more cabs deployed, competition has gotten stiffer as well.

``The city of Los Angeles is overflowing with a lot of cabs. Making a living is getting more difficult,'' said Reza Nasrollahy, president of United Independent Taxi of the San Fernando Valley, one of two cab companies licensed to operate in the Valley.

One main contributor to the taxi population is Yellow Cab, which sued the city in the mid-1990s for not awarding it a franchise. The company won, and it now deploys about 400 taxis in the city. Around the same time, Bell Cab received approval to add 250 taxis that had been operating illegally.

But the biggest competition comes from bandits.

There are an estimated 1,500 to 2,500 bandit cabs in the city, said Ron Sinsabaugh, chief transportation investigator for the city's Department of Transportation. These are taxis that are not licensed to operate as cabs, vehicles that have licenses in neighboring cities but sneak into Los Angeles to illegally pick up fares, or individuals hiring out regular cars for a fee.

Bandit cabs not only take fares away from legitimate drivers, they also pose a threat to riders, Sinsabaugh said. Since bandit cab drivers are not regulated by the city, Sinsabaugh said there has been cases of overcharging, and even muggings and rapes.

In one case, some Japanese tourists were charged $300 to travel from Los Angeles International Airport to downtown Los Angeles. It's usually $24.

But arrests of bandit cabs have slowed down because of staff cuts at the transit department, city officials said. The department only has two full-time investigators for the job, compared with six before 1996.

The use of cellular phones instead of central dispatch systems also makes catching bandits more difficult and their presence more prevalent. Customer calls don't have to come into a central office, which can be tracked and shut down by law enforcement. Calls go to cell phones of drivers, who can be anywhere.

``They're all over,'' said James Okazaki, Department of Transportation assistant general manager.

This black market for cabs is fed in part by the regulated environment of the taxicab industry. Since rates are set by the city ($1.90 for one-fifth of a mile or 64 seconds, $1.60 a mile thereafter), taxi companies mainly compete on service. But bandit cabs can charge what they will - they might overcharge but they also have the flexibility to undercut the competition to snatch business.

With weak enforcement, bandits are operating with impunity. Many advertise openly in telephone directories.

It's a sore point among legitimate cab companies, which are frustrated by the lack of action as law enforcement tends to focus on tougher crimes.

``You know how long we've been asking why'' things haven't improved, asked Boris Yudelevich, vice president of United Independent Taxi. ``We've been asking why for 21 years.''

In the meantime, legal cab companies have to meet city requirements - including paying franchise and other fees, and making sure the cars are maintained properly. An L.A. cabby can even be disciplined by the city for rude or obnoxious behavior.

``It's a lot simpler for them to keep us in line,'' said Anthony Palmeri, president of Administrative Service Coop in Gardena, which runs L.A. Taxi and Yellow Cab. ``They can take away our license.''

One possible solution to the bandit problem is for the industry to carry the cost of having two police officers dedicated to catching these cabs, he said.

``We're willing to pay for it,'' Palmeri said.

Whether the city agrees or not, company executives had their voices heard at a recent public hearing on bandit cabs. The hearing solicited comments for a refranchising of the taxicab industry next year and will re-examine the rules that cab companies abide by. They include everything from franchise fees to taxi rates and illegal cabs.

It works this way: The city grants a franchise to a cab company to operate a fleet of cabs in a designated area. In exchange, the city collects a fee of $64 a month per cab.

The cab company may sell ``slots'' of the franchise to cab owners - essentially the right to operate a cab. Slots could cost from $25,000 to $50,000, said Palmeri, a past president of the International Taxicab and Livery Association. Joining a more desirable cab company will cost more.

However, a cab company also might have a single owner who owns the taxis and leases them to drivers.

Ownership and fee setups vary. A common structure is for the cab owner, who might drive the taxi or lease it to a driver, to pay a group of fees to the cab company that include franchise, insurance and administrative expenses.

In return, the cab owner gets the privilege of receiving customer calls and other support from the company. The cost is at least $1,000 a month. On top of that, the cab drivers or owners pay for gas and the maintenance of the cars. But the cabby keeps all the fares.

Cab drivers earn between $25,000 and $55,000 a year, Palmeri said. At the airport, they can make $250 to $300 a day.

Cab driver Wartan Alexan, an Armenian from Glendale, said while business goes up and down, he can make $600 to $700 in a good week.

At United Independent Taxi, part of the fees that cabbies pay gives them the support of a global-positioning satellite system that pinpoints their destinations and tracks cabs' whereabouts at any given moment. A computer console mounted near the driver's seat relays customer pickups and messages. It's a system that United is proud of and will come in handy when refranchising begins.

Regardless of which company wins the refranchising wars, one thing is sure: There's always a place for taxicabs.

``The city of Los Angeles and surrounding areas have a transportation problem and it's not going to go away,'' said Ric Walker, spokesman for Independent Taxi Co. in east Hollywood. ``Because of that, there will always be a need for cabs.''

IN SERVICE

The 10 most expensive cities for a 5-mile cab fare.

1. Philadelphia $10.50

2. San Francisco  $10.40

3. Miami $9.60

4. Los Angeles $9.58

5. Broward County, Fla. $9.45

6. Fort Lauderdale, Fla. $9.40

7. San Diego  $9.30

8. New York  $9.20

9. Milwaukee $9.00

10. Houston $8.85

CAPTION(S):

3 photos, chart, box

Photo: (1 -- color) United Independent Taxi President Reza Nasrollahy, left, and Vice President Boris Yudelevich run the San Fernando Valley-area service.

John Lazar/Daily News

(2 -- color) Vazgen ``Shorty'' Baghoumian is a City Cab supervisor who assigns passengers to taxis at the Burbank-Glendale-Pasadena Airport.

John McCoy/Daily News

(3 -- color) Don't drive without it

This is literally the city's seal of approval: All taxis legally allowed to operate in Los Angeles must have this mark. The city affixes the seal to each car. Each cab company pays $64 a month for each car to operate in the city.

Box: In service (see text)

Chart: Hey, taxi!

The number of taxis legally in operation in the San Fernando Valley has nearly doubled since 1991.