The city's taxicab industry is getting an overhaul.

The Salt Lake City Council on Thursday approved both an ordinance and a resolution that will begin the process of gutting the city's existing cab system.

"This sets us on a path that I think will be good for taxi cab drivers, it will be good for hotel guests and will be good for city residents who now often wait a long time while taxis are sitting at the airport," Councilman Dave Buhler said.

Some of the changes are immediate, but most of the overhaul will likely take at least nine months and could be complicated by lawsuits from the city's three existing cab companies that will lose their operating licenses and be forced to compete with other taxi services for permits.

Salt Lake City's 268 existing cab licenses are shared by Yellow Cab, Ute Cab and City Cab; most are held by Yellow Cab.

The new resolution directs city staffers to develop a new system that will eventually strip away those 268 licenses and allow 200 cab permits. Any company could submit a bid but would have to operate at least 50 of those permits. That means two to four new cab companies would hold the 200 permits.

Cab company attorney Don Winder said the action amounts to government suddenly declaring a company out of business if it doesn't win the bid, even though it has operated for years and has invested thousands of dollars.

Those permits would be subject to review and future bid requests so, unlike the licenses, individual cab companies couldn't hold onto them forever.

Council members said they want more competition. Some outside transportation companies have recently begun operating in Salt Lake City while not being regulated by the city. Those suburban operators say they provide better service, newer vehicles and better drivers and therefore people want to deal with them rather than the cab companies.

Several downtown hotels have also complained about bad service from the existing cab companies, and a private consultant the City Council hired to examine the industry criticized the industry for having older, polluting cars and lax service.

Cab companies countered that such suburban transportation companies are illegally stealing their business and the city has done little to stop them.

Several dozen cab drivers showed up at City Hall on Thursday to speak against the council's action. Council members responded that the decision will make the system better and allow drivers to make better livings.

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