Sky Harbor Cab Service Update: It's Even Screwier Than We Thought

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The Phoenix City Council is scheduled to vote tomorrow on contracts with three cab companies to serve passengers at Sky Harbor International Airport.

But a New Times' review of public records associated with the city's selection process reveals shocking irregularities with one of those company's proposals - omissions and misrepresentations so bad, the city should have no choice but to halt the process.

The records, which we finally obtained yesterday, show that one company, Visum Investments, has failed to comply with the city's requirements. Visum's references don't check out. Its proposed general manager appears to be lying on his resume. And, even though the city has insisted that there's no collusion between the two upstart companies recommended for selection tomorrow, Visum's proposal actually uses its supposed rival, the owner of Apache Taxi, as a reference.

And here's the worst part.

The Apache reference appears to be the only one on the proposal that's actually legitimate.

As we reported in last week's paper, the city is poised to give new contracts for cab airport service to one longtime supplier, AAA Cab, and two upstarts, Visum Investments and Apache Taxi. Our column explained that Visum and Apache are both less than a year old - and that the company's owners purchased property together a few years ago. And while Apache seems to be a legitimate company, albeit a small one, Visum is so new that it's operating out of a UPS Store box.

That certainly raises questions about whether the two companies coordinated their bids. And what we found in the public records yesterday only makes things worse.

The city has mandated that any company seeking the contract must have a general manager with three years' experience managing a fleet of at least twenty vehicles.

To meet that requirement, Visum's proposal states that its team includes Hassan Abdell, currently the general manager of Cultous Medical Transportation in Tempe. Abdell's resume says he's worked as the general manager of that company for five years.

But Cultous Transportation, oddly, has only been in business for one year, according to the Arizona Secretary of State. The company filed its articles of incorporation in September 2008.

And that doesn't appear to signify a failure to file the right paperwork on time: The company's Web site, too, is just a year old, according to Internet records.

Does Abdell have experience managing a cab fleet other than for Cultous? If so, he doesn't list it on his resume. Before forming Cultous, he was a car salesman and, before that, a taxi driver.

Reached by phone today, Abdell said "I can't talk to you about that." He promised to call back later; we'll update this story if we hear from him.

But Abdell's resume isn't the only part of Visum's proposal that doesn't check out. Under the city's very minimal requirements, Soroosh Ghafaripanah, the fledgling company's owner, was asked to submit contact information for three clients "for whom the proposer is furnishing or has furnished services similar to those described in this RFP."

That should mean someone who's hired Ghafaripanah for taxi service, right? But the only reference that's connected to the industry, at all, appears to be Abbas Naini, the owner of Apache Taxi and Ghafaripanah's fellow high bidder.

Neither Naini nor Ghafaripanah has returned calls for comment, so their relationship is not clear. But Ghafaripanah once used Apache's address as his own, which suggests the two men may have worked together in the past.

The other two references are far more nebulous.

One of them, Ronald Clifton, owns a financial services company. But Clifton had every reason to give Visum a good reference: Corporate records show that he's actually a part owner of the company -- even as the city called on him to vouch for it. (Clifton did not return calls for comment.)

Visum's third reference, Marc Wilson, appears to be a 32-year-old Scottsdale real estate broker. When I reached Wilson on his cell phone last night, he originally said he had a few minutes to talk. But when New Times asked about Ghafaripanah, Wilson was suddenly busy and asked us to call back in an hour.

He hasn't returned a call since. And believe us, we've tried.

But all the problems with Visum's proposal may actually end up paling in contrast to one big admission New Times found in the city's records.

Critics of the city's process, like the owners of Discount Cab, have said that the two upstart companies about to win contracts to service Sky Harbor don't have a viable business model. Both Visum and Apache bid exorbitantly high per-cab rates, yet both companies said they could only supply the minimum number of cabs permitted in the city's RFP: just twenty cabs each.

That left a huge number of cabs for AAA Cab, the clear winner in the city's bizarre RFP process. Yes, AAA is paying a high price per cab, but it's been in business for years and, since it handles much of the Valley's taxi business outside the airport, it could likely afford to subsidize the airport contracts.

But as critics point out, without the economies of scale, the upstart companies' high bids are completely impractical. How can Visum and Apache even stay in business, they question, if they have to pay the city nearly $400,000 for the right to win the contract, even as they're just getting started?

The city has insisted that such concerns are silly. And AAA Cab, which stands to benefit if the new contracts go through, has attributed them to "sour grapes."

But in private, it turns out, both Visum and Apache's owners actually agree.

According to notes from the city, apparently generated by staff after a meeting with Visum and Apache, both companies "stated they made a mistake."

Why? Twenty cabs just aren't enough to be profitable, Apache's owner explained.

"Apache stated they thought another opportunity would be given to increase," the notes say. "Apache thought the process was unclear and are unsure whether they will be profitable with only 20 vehicles." The note-taker then added, "Declined offer to remove themselves from consideration though."

That admission is a key one, because it shows that even as critics of the city's process have been accused of sour grapes, at least two of the winning bidders have expressed the exact same concern to the city.

City staff should have shared those concerns with the council when the issue was raised at subcommittee meetings. Instead, they seemed determined to push the new contracts through.

Indeed, city staffers offered a pat answer to the companies, according to the notes obtained by New Times: "Staff explained that if the fleets were increased in the future, they would have an opportunity to gain vehicles at that time."

But from everything we've heard out of Sky Harbor lately - and trust us, we've heard from plenty of cabbies unhappy with the entire system - there are already too many cabs idling at the airport. In this slow economy, there isn't enough business for the cabbies on site to make a living wage as-is. Add more vehicles, and it would be a recipe for disaster.

We said it in last week's paper, and we'll say it again today: There are enough concerns with the proposed bidders on this contract that the City Council simply cannot give it a green light tomorrow.

Council members, are you listening?

UPDATE at 3:50 p.m.

The city's Deborah Ostreicher tells us in an email that "All requirements of the RFP were met and business references were checked to the City's satisfaction." She also had this to say about the notes we found showing that Apache and Visum were both concerned about only having twenty cabs:

Each company was asked to provide the bid amount and the maximum number of vehicles they would be willing to provide for taxi services at the airport.  The minimum bid was $3,000 and the minimum number of vehicles was 20 vehicles.    

In addition to their bid amount Visum and Apache taxi each indicated they would only be willing to provide 20 taxicabs.  Once they were notified that they were one of the recommended proposers, they each expressed an interest in having a higher allotment than the 20 they initially proposed. If customer demand increases in the future, additional vehicle allotments may be available to the three successful companies.

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