PEAKS ISLAND – A teenager who carries passengers around Peaks Island on his golf cart has run into a controversy.
While some praise Matt Rand’s entrepreneurial spirit, others say his service is undermining the island’s nonprofit, year-round cab service.
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The City Council may weigh in this month when it takes up a proposal that would effectively shut down Rand’s business.
The issue illustrates the difficulty of providing taxi service in a place where there aren’t enough customers for anyone to make a living from it.
Two competing services, with different business models, started at the beginning of last summer.
Rand’s is a low-cost, seasonal service that uses a golf cart, depends on tips, and avoids the regulations and costs that come with running a taxi business.
The other, which was supported by the Peaks Island Council and the Portland City Council, is a licensed year-round cab company. It received a startup subsidy of nearly $20,000 from the city.
Rand is a 19-year-old Cape Elizabeth resident whose family has a summer home on the island. In June 2009, he began using his family’s four-passenger golf cart to ferry people around and offer quick tours. He doesn’t charge fares, but he accepts tips.
Two weeks after Rand began giving rides, a nonprofit called the Island Transportation System began a taxi service using a Dodge Grand Caravan. The group spent $5,000 on liability insurance and persuaded the City Council to increase the maximum fee for an island livery service from $1.50 per person to $5.
The group hired Jay Desmond, an island resident, to be a full-time cab driver. It allowed him to keep all of the money after he paid the operating expenses.
Right from the start, there was tension. Rand said Desmond urged him to quit and told him he was operating an illegal taxi service.
But Rand said he did a lot of research before starting the service and found that he could give people rides as long as he didn’t ask for payment or accept money during a ride. He said people can legally give him tips once their rides are over.
A police officer gave Rand a summons in May for operating a livery service without a license. A few weeks later, the same officer told Rand that the city was dropping the charge on the advice of its attorneys.
Now, Rand’s opponents are trying another approach.
At the urging of the Peaks Island Council and the Island Transportation System’s directors, City Councilor Kevin Donoghue wants to amend the city’s definition of a taxi service to include anyone who is paid for any trip in which the passenger determines the destination and route. The council will vote on the issue Aug. 19.
Supporters of the proposal say Rand is making money in the easy days of summer but isn’t around the rest of the year, when the island’s population drops from a summer peak of 4,000 to 5,000 to less than 1,000.
They say Rand is taking business from the island’s taxi service, which needs all the summer money it can get to survive the lean winter. The taxi service is especially important for the island’s elderly residents, they say.
Lynne Richard, a member of the Peaks Island Council, said Rand’s service would fill a need if the island didn’t already have a taxi service. “He’s skimming the cream off the top,” she said.
The taxi service has struggled since its inception. Desmond quit in the middle of winter. He couldn’t be reached for comment on this story. His replacement quit without notice during the first big summer weekend.
The Island Transportation System is now recruiting volunteers to take turns driving the taxi. It already has five drivers. Also, because customers complained that the $5 fare was too expensive, it has dropped its fares altogether. The drivers now ask people to pay any amount they want.
Rand said the taxi service is copying him. He said the Island Transportation System would have been better off from the start if it had used his model, asking for tips and avoiding the high operating costs of running a licensed taxi.
If his opponents succeed in making his service illegal, he said, they will only harm themselves, by removing a low-cost option that they could use in the future.
He said, “They are attacking what they want to be.”
Staff Writer Tom Bell can be contacted at 791-6369 or at
tbell@pressherald.com
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