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Are Denver cab companies ready for an Uber-bumpy ride?

Are Denver cab companies ready for an Uber-bumpy ride?
Anthony Camera

"We are excited and ready to start our business," says Mekonnen Gizaw, president of Mile High Cab, sitting behind his new corporate desk in a small fourteenth-floor office in Aurora, an office that's nearly empty. The room where Mile High's dispatch system will operate is just a tangle of phone cords sprouting from the wall. The cashier's desk near the front door, where drivers will deal with financial matters, is bare. The phone sitting on Gizaw's desk isn't even plugged into the wall.

But soon enough, Mile High Cab will be fully operational, an outcome that's been a tumultuous half-decade in the making. In 2008, concerned about existing taxi companies' high lease rates and questionable business practices, Mile High applied to become a new Denver cab company. Its attempt faced opposition every step of the way — from politicians, from state rule-makers and, most of all, from Metro Taxi and Yellow Cab, the city's largest and most entrenched taxi companies. But finally, now that Mile High's bid worked its way through the courts, the company has just gotten the green light from the Colorado Public Utilities Commission, the state agency that regulates taxi services. Now it's filing its official paperwork, developing its taxicab color scheme and setting up that office; Gizaw says Mile High should hit the streets by early spring.

Those streets look very different than they did back in 2008, though. Over the past two years, smartphone-based car-hailing companies Uber and Lyft have launched in Denver, triggering turmoil among existing transportation services and radically transforming the very notion of hailing a cab. Meanwhile, the giant multi-national transportation firm that owns Yellow Cab is attempting to buy Metro Taxi, which could result in a single company controlling a majority of the city's $70 million annual taxi business. And finally, Mile High itself is beset by internal turmoil, with various founders challenging each other for control of the company.

Gizaw insists he isn't worried about such bumps in the road. "If you exist, you exist," he says. "Your success is based on the service you provide to the community." And with that, he hands over a sheet listing Mile High's unique services, including focusing on low-emission taxi vehicles and new cab-hailing technologies. On the top, it reads, "Mile High Cab, Inc.: Taxi of Tomorrow."

But what, exactly, will tomorrow bring?

***********

"The taxi industry in Denver is unlike any other taxi industry in the country," says Edem "Archie" Archibong, who started out driving a cab in 1995, among the first to operate one of the purple taxis owned by the then-newly launched Freedom Cabs. Before that year, the PUC hadn't granted a license to a new taxi company in almost fifty years.

That's because under Colorado law, taxis are a protected public service. In order for a proposed cab company to gain approval, the PUC has to be convinced both that there is a public need for its services and that the new business won't put existing taxi operators out of business — and that's an extremely high bar. While Colorado isn't the only state with this sort of arrangement, most others have a trade-off: In exchange for such "regulated competition," taxi companies are restricted in how much they can charge their drivers to lease cars. But in 1991, after the PUC began looking into complaints that drivers were being charged unfair lease rates, taxi-company lobbyists succeeded in getting legislation passed that prohibited the PUC from regulating taxi companies' lease rates at all.

"The current state is the worst of both worlds for the public, which is being charged a monopoly price, and the drivers, who are being exploited with a monopoly lease rate," says former PUC chairman Ray Gifford, an outspoken critic of the current system. According to one PUC study, Denver taxi lease rates increased by an average of 5.4 percent annually between 2002 and 2008, while the market itself, based on total taxi trips, increased only 2.7 percent.

While both Metro and Yellow offer a variety of lease options, in 2012 most Metro drivers paid $540 a week to drive one of that company's 492 cabs, while most Yellow drivers paid $460 a week for one of 300 Yellow cabs, according to a PUC study. The majority of Freedom's drivers, however, shelled out just $285 per week (that figure recently went up to $300). "The reason we try to keep our lease rates down is so we don't put a huge financial burden on the cab driver," explains Freedom general manager Max Sarr. "That way, drivers won't be very stressed out by trying to work long hours and make a lot of money, and not really focused on the street." According to safety audits in 2010 and 2011, over a thirty-day period, Metro drivers had 175 violations for driving longer hours than they're allowed, and Yellow drivers had 62 such violations, while Freedom Cabs' drivers had just one over-hours violation during its own thirty-day audit.

The way the taxi industry has long been structured in this state, though, drivers have had little recourse regarding high lease rates or other concerns. With so few taxi companies allowed in the market, they didn't have many alternatives if they wanted to continue driving; as independent contractors, they had no job protection or most of the other privileges provided by the National Labor Relations Act. Some drivers claimed this situation led to an abusive workplace environment. In 2009, 21 past and present Yellow Cab drivers, all of African descent, filed a federal lawsuit against the company claiming years of discrimination and abuse. "If you look at the system we have in Yellow and Metro, with the high lease rates and inability for the drivers to go hardly anywhere else, you do have an indentured-servitude vibe going on," Gifford said in a 2010 interview on the case ("Mean Streets," December 2, 2010).

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18 comments
caseyjp1
caseyjp1

Interesting article. What is even more interesting to me is the lack of ANY talk about the suburbs. 

Some of us make our bread and butter AWAY from downtown specifically to avoid the rat nest down there. (Not just traffic, but a large proportion of idiot pedestrians and amateur-hour bar customers.)


Out in the burbs I hear a lot about the ride share companies, and while some of the feedback is good, for the most part the same problem applies: "It take forever to get a ride."


The leases are high for the cab companies, yes, but some of us consider that a "peace of mind" cost of doing business.  The lease covers insurance, dispatching and most importantly: maintenance.

If my car breaks down...I have a loaner waiting. If the indy breaks down...he's done until he can get it fixed.

(I don't count the car, because about 70% of the vehicles in taxi fleets get paid down in a couple weeks as most of em' are cop car auction purchases...which cost about 1200$ a ride to said companies.)
 

That said, I am NOT defending the lease rates for the two major companies. 

THEY ARE TOO HIGH, and no matter what math I use, if I were running a cab company I wouldn't be able to justify the lease rates in a free and open market.  Of course in a free and open market the traditional cab companies wouldn't be able to attract enough drivers to fill a prius by charging what they do.


Competition is good. It is capitalism at its heart. If the traditional companies can't compete, then they will fail and something better will fill the niche. It is how things are supposed to work in this country. <----putting on the rose colored glasses for that last bit, because things don't work like that here anymore.  :-/

hotcabbie
hotcabbie

I hear they are doing weekly meet ups now. We should go talk to them.

DonkeyHotay
DonkeyHotay topcommenter

          *** Boycott the Greedy Big $$ Taxi Cartel Monopolies !! ***


Support you Local Independent Ride Sharing / Carpooling Providers !!

BlueFurious
BlueFurious

This Loyal Merrick character is a scum bag. He has a history of following lyft drivers around and taking their pictures so he can send them to the insurance companies. He is a menacing self righteous vigilante douche bag.

I wonder why that part wasn't reported about him? The part where he creeps out drivers by following them around for miles, or that he flips off and cusses them out. 

You know what is killing your business Mr. Merrick? It is not Uber and it is not Lyft, it is the time you spend being a dick and not giving rides to the public because you are obsessed. The way to make this better is to fix the legislation that your companies are forced to work under, not to stop these others from operating.

P.s. Why not just buy yourself a Prius and be and Uber driver, you will make more money and you'll be a lot less of a cock all the time.

Cheers.


AJ4391
AJ4391

Uber absolutely sucks downtown or after any major event, game or concert.  When you're leaving a bar or a game, it's nearly impossible to find the vehicle you're supposed to be in since they are mixed in with hundreds of other vehicles that look exactly the same.  It's so much easier finding a cab at these times then an Uber.  I cannot even imagine how bad it would be if cabs disappeared and everyone in downtown is searching for the specific vehicle they are supposed to be in instead of just jumping in the first cab you see and getting on your way.  In the end Uber, Lyft, cabs and any other ride is all the same and they should all be regulated the same.  Uber is nice and all but I could care less anymore how I get home as long as I get home safely.

bawdylofree
bawdylofree

Loyal Merrick is a psychotic and aggressive cabbie-monster, who actively harasses other UberX/Lyft drivers.  What's worse is that sometimes he brings his young son along with him in the cab, teaching him "Loyal's Way" of dealing with conflict.


Loyal, work on reforming your own industry and maybe you won't have to worry so much about the competition.

akDan
akDan

As Denver's corrupt Taxi & DIA Ground Operations Officials pulled my Herdic License because I allowed ACLU & NRA lawyers to successfully defend my self-defense rights in Court (case #GS-492135) to carry a firearm to prevent being another cabdriver killed, falsely labeling me as a terrorist, while they allowed the Bomb-making Shuttle Driver Zazi to operate freely, I then had confirmation that Denver's Government was FULL of SHIT !!!

l.merrick0
l.merrick0

History? Time? Private Investigation is unregulated and legal in the State of Colorado. My account closed before October. I've been blind to you since. It's ok that you don't like me. We simply don't like each other. That's what happens when you cheat and lie at another's expense. They push back.

When I showed up I paid my fees, taxes, lease, took my tests, my picture, my prints, my urine. I then served my customers, took credit cards, cash, vouchers with a thank you and a smile. I followed the rules. Kept the cab perfectly clean and fresh. I trusted the deal. Then you showed up and took what you were not entitled to. You used lies, deceit, fraud to get it.

Btw I do own that premium Prius 5 on the cover. I lease my Prius 5 out. I make more money then you, in more ways then you, serving more kinds of people then you will ever find. I'm fighting for a business that I built through hard work, perseverance and fair play. Your role here is of the corner-cutter, cheap-skate, the exploited and naïve scab who undercuts the common man. This is why you are scum.

l.merrick0
l.merrick0

Oh Radhika, your being ridiculous.

Your business depends on fraud. Fraud is your advantage. Go ahead and tell your personal auto insurance company that you are providing taxi service under that policy. They will cancel your policy in a heart beat. I'm not about about to let fraudulent actors like you steal business that I paid for. If competition in this business means working for minimum wage or less count me out; I got kids to feed. Unlimited numbers and no-bar to market entry is a race to the bottom that is so unconscionable as to be immoral.

A pox on all your houses.

l.merrick0
l.merrick0

Opps, Radhika just called me. It wasn't her. My bad. You just used her inside info to make it ugly, bringing my son into it, consciousnless scab. You're likely that thick lesbian that tried to run me over. Right? Too bad you didn't hurt me. I would have loved to sue your idiotic company. Next time you see my cab just hit me ok? Gimme another shot at it. Make me bleed this time.

BlueFurious
BlueFurious

@l.merrick0  You sir are trash, but let me set the record straight. 

1. If you have so much knowledge of the insurance industry, why the hell are you a cab driver?  You don't. You believe what you mob boss ass hat taxi unions tell you to say because you are a puppet. If you do have the knowledge you claim, prove your assertion. You cannot do so, because it simply is not true. Further, if you do have this knowledge QUIT DRIVING A CAB AND SELL INSURANCE!

2. I hope we do get to count you out. But for now stay away from me and from my pals on the road.  I am not nice, and I will defend myself. Threaten or menace me and I will have your ass tossed in the pokey for a night.


3. The cab companies have had an unrecognized monopoly in this city for 5 decades, you have enjoyed the freedom to treat your passengers like shit, abuse the system by not accepting credit cards when you are required to do so, by not accepting short rides because you do not make as much money, and the list goes on and on. I never have any of these problems with the rideshare companies. Never once as a passenger and certainly not as a driver. 


If you wanted to hold onto your monopoly as an industry, there was one thing you could have done. Be better. Now that these organizations are kicking your ass, I would either jump on board, or get out of the way.  

Beyond that Chief I think you are out of luck. 

See you on the road.

bawdylofree
bawdylofree

@l.merrick0 YOU brought your son into it when you brought him along in your cab on your mission to harass Lyft drivers. How does your cab company feel about that? You almost got ran over because you were blocking a car on purpose.  You've tried running people off the road.


Multiple police-reports have been filed because of Loyal Merrick's psychotic stalking and reckless confrontations.


Loyal Merrick, you're an angry attention-whore, check yourself before you wreck yourself.  Please seek therapy for your troubled past, and stop taking it out on everyone else.  Be happy that you have a family and a job and own your prius.  

You'd be an attractive person if you just smiled vs being such a bitter mess.


LET IT GO!


Once again, work on reforming your side of the industry, tell your co-drivers to stop smoking in their damn cars, to stop being rude, to get off the phone while driving, to speak english and to stop harassing women.

l.merrick0
l.merrick0

I actually see daily the people that your corrupt business will leave behind & I have a conscience & I give 5 star service & and I serve short grandma trips & I take cash/credit/voucher & I can be summoned via text, phone,web, or app. I am superior to you in everyway. You just have an illegal and immoral app. Your talking to the wrong mofo with that stereotype.

Face it. You have no answer to the problem I posed to Joel Warner. The elderly, poor, handicapped, tough neighbourhood, aka "hard to serve" customer may have obsolete technology, but people don't become obsolete. Your business is immoral and unfair to us both, you scum, thief, liar, fraud.

I hope you get into an accident and have to face the reality of your fraud and lies.

 
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