DIA Decision Could Change the Taxi Industry in Denver
One of Green Taxi's hybrid cars.
While Uber, Lyft and the A Line continue to take a growing majority of the passenger fares at Denver International Airport, taxi drivers are awaiting a decision from DIA that will dictate who gets the rest.
The Colorado Public Utilities Commission used to cap the number of vehicles a cab company could dispatch at any given time, but no cab company ever had that many cabs on the road, so it was a somewhat arbitrary number. For example, Yellow Cab had a limit of 300 cars but kept about 75 percent of that number on the road. The airport would allot permits based on those caps; bigger companies got more permits, while smaller companies received fewer. But in 2015, the Colorado Legislature passed a bill that eliminated caps. When these numbers were rendered inconsequential, the formula had to be thrown out.
For new companies applying for airport permits, DIA no longer had a system in place for how they should be granted.
Abdi Buni formed Green Taxi as a cooperative in 2016, and in the past year, he's amassed one of the biggest fleets in Denver. When he applied for his airport permits last July, there was no clear way to decide how many Green Taxi should receive. He knew there was limited space at the taxi holding area at the airport, but he was expecting more than the twenty permits he was granted. “Guys are not making money,” Buni says. “It totally holds us back as a business to grow.”
There are 321 available permits to divide between seven cab companies. Metro Taxi has the most, with 97 permits, while Green Taxi and All Cities have the fewest, with twenty each. As DIA officials deliberate over a new way to regulate taxis, Buni is hoping that his fleet, which has grown to employ 244 drivers, isn't left behind. He has proposed that DIA should allot permits based on the number of vehicles insured by each company, which he argues is a much better way of gauging a cab company's size.
“We arrived at twenty spaces for Green to accommodate their business and our limited space as we assessed both an equitable solution and the best path forward for the airport," says DIA spokesman Heath Montgomery.
Montgomery says DIA is considering a few options, but notes that any decision must “provide a fair opportunity for businesses to compete.” In the meantime, the need for transportation from DIA is increasing. Last January, Uber and Lyft gave nearly 40,000 rides from the airport compared to close to 30,000 for taxis. By December, those numbers had risen to 70,000 rides for Uber and Lyft and just over 30,000 rides for taxis. Montgomery says average wait times for taxis have increased from just over fifty minutes in 2014 to almost two hours and fifteen minutes in 2016.
“It's clear that we do not simply need to add more taxis as the demand for [transportation network companies] continues to grow," Montgomery says. "Drivers are getting fewer than two trips per day now, where they used to get more than five in 2014.”
Drivers tend to flock to Buni because he gives them a chance to be business owners. As a co-op, Green Taxi charges its drivers a one-time $2,000 fee to become part-owners and $75 per month plus insurance after that to stay on the road. It's the same model he used to form Union Taxi, Denver's only other taxi co-op, in 2009.
Buni is an Ethiopian immigrant with a calm, disarming demeanor and a natural charisma that endears him to his hundreds of drivers. When he arrived in Denver in 1996, there were only three cab companies in town: Yellow Cab, Freedom Cab and Zone Cab, which has since been bought by Metro Taxi. Having cut his teeth driving taxis in California, Buni didn't mind ferrying passengers around and training drivers for Yellow Cab, but he did mind the way the business was structured. “All of us were feeling the heat that there was no competition in Denver, and we were just paying whatever we were asked; there was no choice,” Buni says.
Every week, he started in the hole, paying fees that could exceed $700 just to be on the road. Regardless of circumstances, that money had to be paid. He remembers being in the hospital when his wife gave birth to his first child; his mother was in the same hospital, recovering from heart surgery in the ICU. Since fees were due up front, he was losing money to spend time with his family. In an effort to fix this issue, he started organizing drivers in 2003 for what would eventually become Union Taxi. His goal was to give taxi drivers like himself a better work-life balance and allow them to take time off without severe financial repercussions.
Union Taxi blossomed, and taxi drivers throughout the city reaped the benefits, Buni says. Competitors lowered their fees and drivers had more options. Two years later, after Union had established itself as a major player in the taxi scene, a new president was democratically elected by its owner-drivers and replaced Buni. There was no ill will; the process worked just as he imagined it. Buni says he was pleased to see democracy in action, especially since voting for change was a foreign concept to many of the drivers, who were immigrants like himself.
In 2014, he says, he was approached by local drivers to create another taxi co-op, and the idea for Green Taxi was born. Buni believed there was room for more competition, especially when he had such faith in his product. Drivers typically want to work for whoever treats them the best, and Buni thinks that's where he has an edge.
Transportation companies are faltering on this front, as Uber recently had to pay $20 million to drivers who, according to the Federal Trade Commission, had been misled about their potential earnings. Uber and Lyft drivers have also been protesting across the nation for increased wages and the right to unionize.
Green Taxi is one of two taxi co-ops in Denver.
Buni has backers in his quest for equity at the airport, including District 3 Councilman Paul Lopez, who thinks all cab companies should have an equal shot at airport fares. “I think we should create a level playing field, despite whether you're new in the market or not. The airport is a very successful entity. Doing business at the airport, whether you're a cabbie or a shuttle driver, whether you're a cleaning contractor or a restaurant inside the airport — the airport can make people into millionaires overnight. That's just the nature of the business; it's a very lucrative one. Why shouldn't we be spreading the wealth and spreading the opportunity?”
District 4 Councilwoman Kendra Black also supports Buni's enterprise. “I'm hopeful that the airport will come up with a new equitable formula to fairly allocate spots at DIA. Additionally, I was happy to learn about Green Taxi's innovative new model whereby drivers own their own vehicles as well as a piece of the company. It is a great way for them to realize the American dream,” she wrote in an e-mail.
The long-term health of the taxi industry may be at risk because of Uber and Lyft, but Buni doesn't buy into that theory. He says there are plenty of customers to go around, and the real battle is for good drivers. For now, he's dedicated to making sure his drivers have the opportunity to thrive at the airport. “I'm not the type to say we're done," Buni says. "There's always hope.”
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