Among requests for new taxi permits, a driver-owned company fights to emerge

Tuesday, November 15, 2011 at 7:49pm

Before an overflow crowd, a Metro commission Tuesday delayed voting on a proposal for the city’s first driver-owned taxi company.

The Metro Transportation Licensing Commission agreed to pick up the issue in December. The decision came at the conclusion of a public hearing that spanned two and a half hours. An estimated 200 people attended.

Looking to improve work conditions and financial viablity, a group of cab drivers, primarily Ethiopian-American immigrants, have put forth a plan to start a new taxi company called Volunteer Taxi. Drivers who formerly worked — or perhaps currently work — at Nashville’s five existing licensed cab companies would own the company.

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

Cab drivers pushing for Volunteer Taxi, 60 in all, say they are required to purchase their vehicles, as well as provide maintenance of their vehicles, under the system’s current arrangement. Hours often total 12 to 14 a day, they say, and cab drivers are unable to unionize. Meanwhile, the large corporate cab companies bring in the bulk of profits.

“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.”

Keeping receipts would allow Volunteer Taxi workers to receive health insurance, Ambaw said, which existing drivers don’t get. They could also enhance services, he said. To date, Ambaw said Volunteer Taxi has $532,000 in cash and vehicles to help start the venture.

For the driver-led company to gain approval, the commission would have to increase the cap of permitted cab vehicles authorized in Metro. Metro sets the permit limit one time each year. The cap is currently 585. Volunteer Taxi has asked for 80 cab permits.

But Brian McQuistion, director of the commission, has recommended the board not increase the cap, largely because of staffing. Operating under a tight budget, he said the commission is already struggling to inspect the existing number of cabs in Nashville.

“If we add any more permits, I would prefer it wouldn’t be a large number we would have to respond to,” McQuistion said.

Besides Volunteer Taxi, three other groups have applied to open new companies in Nashville. In addition, three existing companies have asked for more vehicle permits.

At Tuesday’s public hearing, as many people spoke against Volunteer Taxi’s proposal as for it. Some cab drivers said a new company, and more permits, would stretch business. A few said the 585-permit limit should increase after the opening of Music City Center in 2013 when tourism is expected to boost.

Executives of current Nashville cab companies are also skeptical of the idea.

“It’s a challenge. Everybody think it is easy,” said Michael Solomon, executive vice president of Taxi USA of Tennessee, which operates Nashville Cab, Allied Cab and Diamond Cab.

“It takes hard work and it takes a lot of knowledge,” Soloman said. “We have a team of people who have been doing this for years. Just because you’re a cab driver doesn’t mean you can run a company.”

Despite the pushback, Volunteer Taxi organizers –– which include legal counsel and a lobbying arm –– said they were pleased with the commission’s decision to delay voting on the issue.

“We’ve got to get as much public support for these guys as we can,” said attorney Paul Soper of the one-month period before the next vote. “I hope it gives these commissioners time to digest everything they’ve heard today, because they got a lot of information tonight.

“Once they’ve had the time to really think about it –– think about what’s best for Nashville and what’s best for the immigrant community in Nashville –– they will come to the right decision,” he said.

10 Comments on this post:

By: greatadvisor on 11/15/11 at 9:47

There are already far too many permits for any driver who isn't paying off a dispatcher to make a decent living. What needs to be done to bring about the nearest thing to equity -both for drivers and companies - is to put a hold on the number of permits and eliminate the number of permits an individual company is allowed. That would put the companies in competition for the individual drivers and result in a fairer work environment.

In the past twenty years, the policies of the governing body has produced what can only be described as "white flight." An industry that ,in 1990 was 99 percent American is now almost all foreign because of the number of unneeded permits issued. And one major problem - that may have been fixed but I doubt it - is that there is no coherent plan to allow for growth in the industry. Each new permit issued results in a percentage loss of income for the rest of the drivers as drivers aren't paid a salary or hourly wage. Their income comes from their fares and is now so low that few Americans remain as drivers. This is the result of the Taxi and Wrecker Board (appointed by the mayor) not understanding the dynamics of the industry they oversee. Either that or some of them have taken payola from company owners looking to expand

Taxi companies are essentially dispatch services and most of them own very few cars. Mostly the drivers own the cars and pay the company a daily or weekly fee for dispatch services. Therefore, the more cars a company dispatches to, the more the company makes. The more cars that are dispatched to, the less the drivers make. Under this system it is entirely possible for a driver to work weeks on end and barely survive, especially around Christmas time. Summer months are also very bad.

The current system has also affected hotels as they now seem to do everything they can to keep their guests out of taxies because of the incompetence fostered by the white flight. Nearly every hotel now runs shuttles to the airport. Outlying hotels run shuttles downtown. The only chance a cabdriver has to make decent money is to accumulate repeat (personal) customers or hope the next big convention produces a lot of fares.

As far as the drivers starting their own companies, extra cars will only dilute the income available to the present drivers. But here is a solution: Let them have their permits, but let those come from the other companies. Put the present permits up for grabs and in a few years it will become apparent which is the best company to work for and putting the permits up for grabs will also bring a little equity to the industry. Right now the industry is like a plantation for the drivers because their movement is restricted by the amount of permits each company is allowed.

One other thing: Paint all the cars the same color and differentiate the companies with the top light and side logos. That would make it easier for the drivers to change companies.

By: sidneyames on 11/16/11 at 8:11

This was on Bloomberg:
"A license to drive a New York City taxi is not only worth more than its weight in gold, investing in a yellow cab has been more lucrative than the yellow metal.

The CHART OF THE DAY shows the cost of a New York City taxicab license has increased more than 1,000 percent since 1980. The individual ‘medallion’ -- the transferable aluminum plate found on the hood of all cabs -- sold for $678,000 in July, according to data compiled from the New York City Taxi and Limousine Commission, up from $2,500 in 1947. "

Cab owners can do very well in some areas. I just wonder how well they do in Nashville when so many people have cars at this time.

By: yucchhii on 11/16/11 at 8:28

I'm going to say one thing and if the owners of the taxi companies are reading BETTER take HEED!!! GET YOUR DRIVERS UNDER CONTOL!!! You DON'T want ME to be a victim of your drivers wreckess driving!! If I am, I WILL OWN YOUR COMPANY, YOUR HOME AND YOUR LIFE!!! You "WILL" become homeless!!! I can "PROMISE" this. Don't believe me? THAT IS "YOUR" PROBLEM!!! HEED WHAT I SAY!!!

By: Bellecat on 11/16/11 at 9:38

Drivers say they are required to purchase their vehicles, as well as provide maintenance of their vehicles. Hours often total 12 to 14 a day, they say, and cab drivers are unable to unionize. They own the vehicles, pay the insurance and maintenance expenses, and they don't get health insurance.
Meanwhile, the large corporate cab companies bring in the bulk of profits.
"Executives" of the current companies are skeptical--yeah I bet they are.

Sounds like the taxi drivers are doing all the work, paying all the expenses, and getting very, very little of the profits. Who in their right mind would want to be a cab driver? Now I see why all the cabbies in the cities are "foreigners". Looks like there should be a better way.

By: Rocket99 on 11/16/11 at 10:50

I'm guessing the taxi companies pretty much have a lock on this because of things they probably do under the table for the officials in the governing body that controls them.

One thing to start with is, a top down review and audit of the governing body to determine if everything is being handled above board.

Maybe the group of drivers should start a limo service of some sort. They don't seem to fall under this commission.

By: greatadvisor on 11/16/11 at 11:43

Driving a taxi in Nashville is as far removed from driving a taxi in New York as Earth is from Jupiter. The average driver will not make minimum wage but that's irrelevant as they are classified as being self-employed, even when driving a company-owned car. Read my initial comment if you want to know how the system works.

By: Loner on 11/17/11 at 8:29

From the article:
"It’s a challenge. Everybody think it is easy,” said Michael Solomon, executive vice president of Taxi USA of Tennessee, which operates Nashville Cab, Allied Cab and Diamond Cab."

So, one guy operates at least three cab companies and he's the main obstacle to increased competition, from an owner-based competitor? And the bureaucrat who approves the permits,, Brian McQuistion, director of the Metro Transportation Licensing Commission, is also against any new competition? Hmmm...follow the money....I smell corruption here.

This Solomon character owns three cab companies? Something fishy there....and the drivers own , insure and maintain the vehicles that carry his logos? You gotta be kidding.

Now, some African immigrants want to take advantage of America's freedoms, its free marketplace and its free enterprise....but they are now facing an entrenched, time-honored,sweetheart arrangement that is telling them to go to hell.

My advice is to investigate and audit Mr. Solomon and Mr. McQuistion and their respective operations. Gotta be some kind of kickback-sweetheart deal going on here.....this stinks.

By: daniel831 on 11/18/11 at 11:58

Volunteer Taxi's facebook page for supporters. Good stuff:


"We are a group of taxi drivers here in Nashville who want to be able to run our own taxi company in order to provide better, cheaper service to customers who are not getting it now.

We are tired of the Transportation Licensing Commission catering to the entrenched interests of Nashville's existing taxi "companies," which provide no value at all to the Nashville community. These companies stifle competition, they charge drivers hundreds of dollars in fees each week for the use of their licenses, and they operate nothing more than a dispatch service. These companies do not provide health care for drivers. They do not provide workers compensation for drivers injured in accidents. They fire drivers for trying to unionize. These companies are all owned by the very same people, and they use their monopolistic power to drive up prices for customers. Nashville's government continues to let them do this.

It is not fair, and it is not right.

Tell the Transportation Licensing Commission that it's time for them to start working for Nashvillians, rather than for entrenched corporate interests. If you stand by us and want to help restore fairness to Nashville's taxi business, please let the city government know by sending the following email to the Director of the Transportation Licensing Commission at:

"Dear Director McQuistion,

I stand by Nashville's taxi drivers, and I support a driver-owned taxi company in Nashville. I believe in fair competition, and I am tired of the city government placing arbitrary limits on Taxi licenses in order to drive up prices for consumers and benefit the current players in Nashville's monopolized taxi industry. I believe workers should not be at the mercy of corporate dispatch services, and I believe it is unfair for corporations to charge taxi drivers hundreds of dollars in weekly fees to drive vehicles that the drivers themselves own and pay to maintain. I also believe that these corporations should not be allowed to deny their employees basic benefits like health care or workers compensation when every other industry in Nashville must do so.

It is wrong that so many of Nashville's taxi drivers can be and have been fired for trying to unionize in order to fix these many problems. I therefore believe that a driver-owned taxi company is the only solution, and I support Volunteer Taxi's permit application to the Transportation Licensing Commission."

By: tgs on 11/18/11 at 6:59

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By: tgs on 11/18/11 at 7:00

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