Push for driver-owned taxi company follows unrest in Nashville's cab industry

Sunday, November 20, 2011 at 10:05pm

On a September day inside an Antioch union hall, dozens of Nashville taxi drivers — primarily Ethiopian-Americans who have come to depend on the cab industry for employment — met to put the final touches on a novel idea.

Held at an ironic venue given the inability of cab drivers to unionize, discussions centered on the business structure for Volunteer Taxi, a proposed start-up company aimed at chipping away at the monopoly dominated by Nashville’s five existing taxi corporations. The would-be venture, which needs approval from a Metro commission, rests on a radical approach: Drivers themselves plan to own Volunteer Taxi, a bottom-up strategy they say would allow them to work fewer hours, create a less strenuous workplace and supply health benefits to employees. It would be the first driver-owned cab company in Nashville.

“This is America,” one of the 60 Volunteer Taxi organizers said when discussing their entrepreneurial dream.

The scheme has been met with resistance from the cab industry establishment, however, with many fearful that more cabs, along with added competition, would stretch business. Things got contentious at that particular meeting in September, according to attorney Paul Soper, who was there as the group’s legal counsel.

“Representatives from some of the existing companies showed up there in an intimidating manner,” Soper told The City Paper. “They were asked to leave, and refused to leave until they were escorted out by security. They had people out in the parking lots that were taking pictures of the [cab drivers’] license plates. After that happened, six or seven of these guys got fired.”

Soper claims a few cab drivers are now “blackballed” and unable to land other taxi-driving positions in Nashville.

One cab boss who appeared at the meeting was Doug Trimble, president of Yellow Cab. Asked about the episode, Trimble doesn’t deny he was there, but said his company is not one of those that fired any drivers.

“I went to the meeting,” Trimble said. “There was not a word said. They basically knew who I was, and didn’t want me to attend the meeting. All I was trying to do was have a conversation.”

Trimble said “out-of-town tyrants” from the company Taxi USA of Tennessee, a competitor that has cabs under three names, are responsible for firings. An executive from Taxi USA rejected the accusation.

Following weeks of contentiousness, Volunteer Taxi organizers packed a room inside the Metro Courthouse last week to push their cause before the Metro Transportation Licensing Commission, which oversees and authorizes Nashville’s cab services. Commissioners warned “no booing or hissing” before a public hearing began, recognizing many opponents of the plan were there as well. The gathering, an overflow crowd of perhaps 200, offered a glimpse into Nashville’s often-overlooked taxi industry.

In the end, the commission deferred voting on the Volunteer Taxi proposal, as well as applications from three other groups seeking to open new cab companies and three existing companies looking to expand their number of licensed cars. For the driver-run company to become a reality, the licensing commission would need to authorize additional cab permits above the 585-permit cap that currently exists in Metro. The commission sets the limit one time each year. 

The seven-member commission is set to reconsider the issue in December. Between now and then, they will have to weigh two basic questions that could help decide the fate of the driver-owned company: Is there a demand in Nashville for more cabs on the road? If so, does the transportation licensing commission have the manpower to inspect more vehicles? 

Though supporters of a driver-owned company talk about advancing working conditions and fostering a fairer system, the issue could come down to more mundane issues. Odds of approval could be stacked against them. 

 

 

Cab drivers in Nashville, as in many other cities, are considered “independent contractors.” Hence, efforts to unionize here have been unsuccessful under the interpretation of existing labor law.

Nashville’s taxi drivers are required to buy their vehicles, insurance as well as maintain and fuel vehicles. In addition, drivers pay weekly franchise fees, called “licks” — sometimes totaling more than $200 a week — to use a cab company’s logo and work within its business apparatus. These expenditures, drivers say, force them to work between 12 and 14 hours daily, seven days a week to provide for their families.

“We’re trying to help the drivers financially, as well as in benefits,” Volunteer Taxi lead organizer Delelegn Ambaw said of the proposed concept. “The drivers would be the owners, the shareholders, of the company.”

Decreasing the weekly fee, or “lick,” amount would lessen the hourly workload of drivers, Ambaw said. He also said keeping receipts would enable the driver-owned company to offer health insurance and other benefits, which they don’t receive. The plan, he said, is to improve the quality of service through direct ownership. To date, Ambaw said Volunteer Taxi has $532,000 in cash and vehicles to help start the venture.

“The vehicles are owned by us, the insurance is paid by us, and all maintenance expenses are paid by us,” said Ambaw, who claims he was fired from his previous cab company after bosses learned he was organizing the company. “So, in a real sense, we already are the owners.”

The driver-led taxi company push has some notable supporters. In attendance at last week’s meeting was Councilwoman Karen Johnson, whose Antioch district is home to many of the Volunteer Taxi organizers: “This a great opportunity for us as a city,” Johnson said. “They are law-abiding citizens who pay their taxes, and deserve every opportunity to operate an independent business that will meet the growing needs of our city.

“Competition is great,” Johnson added. “I don’t think anybody should have a monopoly.”

But Brian McQuistion, Metro’s transportation licensing director, has recommended the commission deny requests for additional permits that would force Metro to increase its 585-permit cap, regardless which group has applied for them. Volunteer Taxi is seeking 80 taxi permits.

McQuistion said his concern is staffing. A single Metro employee is required to inspect Nashville’s 585 taxis on a periodic basis, he said, and in the past eight years, taxi permits have risen by more than 30 percent.

“It’s already almost an impossible task,” McQuistion said. “Keeping the same one-man staff that the city had back in the 1940s to manage hundreds more cabs is getting to the point where you’re not doing the job that you need to be doing.”

Whether there’s a market for additional cabs is a completely different question, though McQuistion said he has “some doubts whether [more] cabs are needed right now.” Conventional thinking among the industry suggests a spike in cab services could be required to accommodate the expected tourism boost following the spring 2013 opening of Music City Center, Nashville’s $585 million new convention center.

Terry Clements, the Nashville Convention and Visitors Bureau’s vice president of government and community relations, told commissioners that Music City Center bookings have totaled 500,000 room nights. When also factoring in planned hotels, Clements suggested the need for additional taxis should rise. He said he doesn’t know how many permits the city needs, but indicated the commission may need to approve more before November of next year in anticipation of the convention center.

 

 

Organizers of Volunteer Taxi must overcome not only the stance of the transportation licensing director, but also opposition from the city’s cab establishment.

“I think it’s a bad idea, a very bad idea,” said Trimble, the head of Yellow Cab. “It’s not because of who is applying for the company. It’s a free enterprise. I don’t have no problem with them guys owning their own company. The problem is, the amount of cabs that are on the streets right now, pertaining to the population of Davidson County. The convention center is not open. There’s too many cabs in Nashville right now.”

Other cab companies, however, have applied for more taxi permits, including Taxi USA of Tennessee, which is seeking an extra 40. Nonetheless, executives of this company — which operates under the names Nashville Cab, Allied Cab and 1-800-Taxicab — are skeptical of a driver-owned taxi company.

“It takes hard work, and it takes a lot of knowledge,” Michael Soloman, executive vice president of Taxi USA of Tennessee, said. “We have a team of people who have been doing this for 50-some years. Just because you’re a cab driver doesn’t mean you can run a company.

“They may do a great job, and God bless them if they can,” he said. “But if they can’t, the problem is the customer is the one that sacrifices.”

6 Comments on this post:

By: parout66 on 11/21/11 at 1:18

Let them live the American dream. This is a right to work state. Get out of the way and let them operate in a free market economy! The market will sort it out.

By: localboy on 11/21/11 at 9:31

How many cab companies currently operate under the current 585 permit limit? From the story it appears that Yellow and Taxi USA (under three names) are basically operating a duopoly - if that's the case then another player would upset the status quo. If the concern is due to the capacity of Metro's inspection unit, then perhaps Metro can license private garages/inspectors to perform inspections that meet Metro standards and that can charge the cab companies on a per inspection fee.

By: brianwood67 on 11/22/11 at 6:13

Live the American dream
24 hour taxi cabs

By: Loner on 11/22/11 at 6:51

When one guy owns 3 of the 5 operating taxi ompanies in the same town,you have a mob problem and your Commission is undoubtedly corrupt; no more to it than that.. An outside auditor needs to come in and find out who's been screwing whom. Watch out for mob intimidation tactics; this is serious corruption.

By: yogiman on 11/22/11 at 7:21

What is the competition when one man owns three companies. They're competing? BS.

By: Shane Smiley on 11/22/11 at 9:42

Something needs to be done.
Nashville Taxi service as a whole is a black eye on our community.
Most cabs are dirty, and poorly Maintained.
Take a look at the worn out tires on most cabs at the Airport.
Yesterday,I had to go to the fifth cab in line to find one with enough rubber to be safe on the wet streets.
When I got inside, The thing was nasty and the driver talked on the phone the entire time.
Our visitors should not be forced to inspect a cab before getting in or listen to the driver talk on the phone non stop.
Taxi's offer the first and last impression of our city to many visitors.
Visitors spending hard earned money in Nashville for both business and pleasure..
As a frequent traveler, our quality in this area suffers greatly over all other cities of any size in the U.S. and Canada.
If these owner drivers can provide late model, well maintained, safe vehicles, Let them have a shot.
These other companies should have their allotted permits reduced if they can not supply a safe, clean vehicle.

Inspections,
Run them thru a Metro garage inspection. Charge a fee, and get some of this junk off of our streets.
Make the Taxi come to the inspector on a quarterly basis. I would bet more than 80% of our current cabs would be red tagged and taken out of service until repairs were made and the cab was re-inspected.
Lack of tire tread depth, worn out suspension, and lack of cleanliness would be top offenders

As for these drivers working 14 hour days, I feel these drivers should be limited to a 10 hour day.
A commercial driver of an entertainer coach is only allowed 10 hours.
14 hour shifts are unsafe and should not be allowed.
Are they not requires to have a commercial drivers license?