For 2 small cab companies trying to compete, it’s resistance at every turn

Convenience factor: A PayPass payment system is shown in the back of a taxi at Deluxe Taxicab Services in Henderson. VeriFone Transportation Systems provided Deluxe with the technology for free.

Two small Southern Nevada taxi companies are waging a David-and-Goliath battle against industry competitors to be allowed to pick up passengers on the Strip, the city’s convention centers and McCarran International Airport.

Deluxe Cab and A-Cab — statistically, the two smallest companies among the 16 that operate in Clark County — are geographically restricted from picking up passengers in the places where most of the business is.

The two companies have expansion proposals that are winding their way through the regulatory process. Today, the Nevada Taxicab Authority took actions that will move the decision a little closer.

Deluxe’s Boulder Cab operates primarily in Henderson and Boulder City and is restricted from picking up passengers north of Sunset Road. A-Cab operates in western Las Vegas, restricted from pickups east of Interstate 15. Both companies can transport passengers from their respective zones past the border, but can’t pick up there.

Jay Nady, who owns A-Cab, has been battling to get his company’s geographical restriction lifted for three years. He withdrew a petition to repeal the restriction in 2010, but refiled it a year ago. Today, the Taxicab Authority approved motions on four matters that will result in A-Cab filing a revised request within 48 hours, leading to a process at which board members will decide whether they will set a hearing date for a formal request.

Board members spent more than an hour today debating whether A-Cab’s petition to lift restrictions could be heard because it was based on Nevada Transportation Authority regulations instead of Taxicab Authority rules. Ultimately, the board voted unanimously that it couldn’t accept the petition, starting a chain of events leading to a new hearing.

Nady’s company has 56 industry medallions — less than 3 percent of the total issued by the Taxicab Authority. In December, the company ranked 15th of 16 companies in monthly trips, trips per shift and trips per medallion and last in revenue per shift.

When Nady began operations in 2001, he was told by contemporaries that his company would never be profitable under geographic restrictions. But he also observed that most of the companies operating in Southern Nevada started out geographically restricted, but had those restrictions lifted by the authority and they went on to serve all corners of the city.

Even Virgin Valley Cab, which started exclusively in Mesquite, was given permission to operate countywide. Now, the company has a handful of cabs in Mesquite and most of its fleet in the Las Vegas area.

Regulators are reluctant to lift geographic restrictions because new companies like Nady’s were approved to serve the resorts and neighborhoods of the Summerlin area. They fear that if the restriction is lifted, the company’s drivers would go where the money is — the airport and the resort corridor — instead of Summerlin.

Nady said he stays afloat by being as efficient as he can, but acknowledges that his drivers are among the industry’s lowest paid.

“With our operation, we pretty much hold our own with the other companies,” Nady said. “But deadheading after a drop on the Strip or at the airport really kills us.”

“Deadheading” is driving a cab empty to the next pickup and it takes a toll on Nady’s $1 million annual fuel budget.

Nady said regulators acknowledge that A-Cab is helpful during busy periods like this month’s Consumer Electronics Show. With cab lines long at the Las Vegas Convention Center at CES and an all-hands-on-deck strategy needed to move convention-goers to their hotels quickly, Nady said he was called to supply cabs there in violation of his geographic restriction.

Nady acknowledged that he faces an uphill battle to get restrictions lifted because under the cab industry’s regulatory structure every existing shareholder — all of Nady’s competitors — get to weigh in on prospective changes. Nearly every other company would lose market share if the restrictions are lifted so they vigorously oppose Nady with armies of attorneys.

Sometimes, tensions rise during the debate, like today, when Nady testified that other cab company executives were being “mean-spirited” in opposing his plan. Nady also said that it would be impossible for him to prove that other cab companies would not be harmed if A-Cab were allowed to compete countywide, one of the standards that will be considered when a decision is reached.

Nady hinted that if his request is not approved, he’d appeal it to the Nevada Transportation Commission.

“I’m just going to keep plugging away,” he said. “I’ve been working on this for more than three years. I’ve got to keep trying.”