Taxi Cabs Cheaper They're usually considered either a luxury or a necessary evil belonging to America's older and larger cities, where traffic is insane and parking nonexistent. But some observers believe taxi cabs could become an important and much more visible part of the U.S. transportation landscape in the near future.

The growth of the taxi industry, however, isn't anticipated by everyone. A group of veteran taxi drivers in Denver, who have worked for several of the city's established cab services, now want to start their own company. But the proposed, employee-owned company, Mile High Cab, recently had its application rejected by Colorado's Public Utilities Commission, which oversees the state's taxi industry.

Tom Russell, the attorney representing Mile High Cab, says the judge in charge of the ruling concluded the company was financially and operationally sound -- but that the additional competition would hurt metro Denver's existing cab companies and, by extension, the public interest.

Mile High Cab is appealing the ruling. "The term the experts in this case ... and the judge used is 'derived demand'," says Russell, "that there are only so many people who are going to want cabs, and that that number is a more-or-less fixed demand. Mile High Cab very specifically believes, and has as a part of its business plan, efforts to expand the demand for cab services. We think that if there's better service, then more people will want to use taxi cabs. Our point is, competition benefits the public in all sorts of ways."

Short Fares Won't Pay for High Leases

Russell says Mile High Cab is also looking to reduce a cost that is the source of constant complaint and worry for many taxi drivers across the U.S.: their weekly lease. Most taxi drivers contract cabs from their companies and pay the company a weekly lease fee. In some cities like New York -- and even in Denver -- that lease fee can cost a cabbie $800 or more per week -- or over $40,000 a year. The result is that many taxi drivers work long hours and sometimes seven days a week, trying to eke out a profit.

For many cab drivers, "you work six days for the company and one day for the job," says Edem "Archie" Archibong, a cabbie in Denver for 15 years and chairman of Mile High's board. "The first six days you are working for the company, the last day you work for yourself." Archibong says the need to make the weekly lease means cabbies spend much of their shifts looking for big fee rides -- particularly to and from airports. "Drivers who have to pay the really high lease rate are disinclined to take short fares," says Russell. "If the driver's been waiting at a cab stand for a long time hoping for an airport ride, and you just want to go a mile-and-a-half, it creates a disincentive for the driver."

There's a movement among some cab companies like Mile High to establish lower lease rates for their drivers -- and to take their business outside of the traditional airport, hotel and downtown markets. Eric Morris, a researcher at UCLA's Institute of Transportation Studies, says taxis provide desperately-needed mobility for three important but underserved groups: the elderly, the disabled and the poor.

Breaking the Cycle of Suburban Car Culture


"People believe mass transit is an option, but taking mass transit is very physically demanding for the elderly," says Morris, who also writes a column for The New York Times Freakonomics blog. "Taxi service is a really important lifeline for people unable to use the transportation system. And taxis are surprisingly important for poor. Once in a while they have to take a trip via taxis. It's also a lifeline service for them."

Archibong, who has a steady clientele of children and elderly he takes around Denver, says low leases would allow cab drivers to reconsider the smaller calls and to still be profitable.

"You make money from smaller fares because once you start responding to them, they keep coming," he says. "You work for eight or 12 hours, and by the end of the day you make about maybe $130, you give $30 to the company and keep $100. It's that simple. But right now everyone is queuing for $50 [airport fares]. If you're lucky you'll get a couple, and even if you get a couple, you won't make your lease."

An influx of taxis could also help break the cycle of the U.S. suburban car culture. "People don't think, for example, 'Oh I can go out and if I drink too much I'll just take a cab home,'" says Russell. "People think instead, 'Well, I'd like to go out, but it's going to be so hard to get a cab, so I'm not going to try it.'"

"I think there's definitely a need for cab service in outlying areas, especially as time goes on and the population ages," says Morris. "There's a huge role for cabs and other transportation-for-hire services. It's especially important in the suburbs, where you have very few options to driving."

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pmurray@gannetthg.com

Follow the money - did the current cab company owners make any "political" contributions?

August 23 2010 at 2:22 PM Report abuse +1 rate up rate down Reply
TED

If the existing cab companies did something like this, they would all be brought up on charges of price fixing and collusion. A government beaurocrat however can accomplish the same thing with a caveat of "the greater good" ???? For who???

August 23 2010 at 12:09 PM Report abuse +1 rate up rate down Reply
Christopher

I live in New Orleans and we have multiple comapnies that provide service in my city. They are relatively inexpensive and plentiful. With bars open 24 hours/day, our streets are much safer because they are utilized most at night for people who have been drinking. Cities need to get with the program and make it easy for companies to enter the market. If they are abundant, people will use them.

August 23 2010 at 11:03 AM Report abuse +1 rate up rate down Reply
tornado

our government would do well to help support the buses and taxis of this country. little good with airplanes and trains -- air travel is a joke; you may as well take greyhound. train infrastructure -- tracks -- in dire straits. cars are FAR too many on our highways and byways. the average cost of owning and maintaining a car is $8,000 per year. try walking, biking, buses and taxies and make a better america and healthier pocketbook.

August 23 2010 at 11:02 AM Report abuse -1 rate up rate down Reply
cbcircustim

Last time I was in New York I called for cab and specified I am 6 foot 6inch and 330 pounds. Theysent a toy econo box that wouldn't hold my lap top. When I rejected the cab the refused to send a full size car ,had to hire a limo. Next time I will either drive my van in or rent a full sizr car. This is why so many people skip going to plays on broadway. If I want to see a musical I wait till it goes on the road to a civilized location

August 23 2010 at 10:46 AM Report abuse -1 rate up rate down Reply
cbcircustim

Last time I was in New York I called for cab and specified I am 6 foot 6inch and 330 pounds. Theysent a toy econo box that wouldn't hold my lap top. When I rejected the cab the refused to send a full size car ,had to hire a limo. Next time I will either drive my van in or rent a full sizr car. This is why so many people skip going to plays on broadway. If I want to see a musical I wait till it goes on the road to a civilized location

August 23 2010 at 10:46 AM Report abuse -1 rate up rate down Reply
cbcircustim

Last time I was in New York I called for cab and specified I am 6 foot 6inch and 330 pounds. Theysent a toy econo box that wouldn't hold my lap top. When I rejected the cab the refused to send a full size car ,had to hire a limo. Next time I will either drive my van in or rent a full sizr car. This is why so many people skip going to plays on broadway. If I want to see a musical I wait till it goes on the road to a civilized location

August 23 2010 at 10:46 AM Report abuse -1 rate up rate down Reply
cbcircustim

Last time I was in New York I called for cab and specified I am 6 foot 6inch and 330 pounds. Theysent a toy econo box that wouldn't hold my lap top. When I rejected the cab the refused to send a full size car ,had to hire a limo. Next time I will either drive my van in or rent a full sizr car. This is why so many people skip going to plays on broadway. If I want to see a musical I wait till it goes on the road to a civilized location

August 23 2010 at 10:46 AM Report abuse -1 rate up rate down Reply
Willie

Maybe these guys speak english too well , so the thought they were over qualified

August 23 2010 at 10:36 AM Report abuse +1 rate up rate down Reply
Tim

I live in New York City and take cabs often. But when I go home to Milwaukee,WI. it is a different story. Wisconsin has a very large problem with drunk drivers. Miwaukee is a city with a lot of taverns that close at 2:00am. At that time of night there is no public transportation and for some reason the city has let one company monopolize the buisness. So with no competion fares are very high. Therefore people who live in Milwaukee rarely take cabs. I would be willing to venture that over 50% of thier buisness is to tourist. There has to be compition in a buisness like that. Otherwise it becomes a real problem for the consumer. The city does not regulate what they charge so there is no oversite when it comes to pricing. Milwaukke needs to look at the big picture. You want to keep drunken drivers off the road than help to make it a little easier for people to have alterative transportation.

August 23 2010 at 10:19 AM Report abuse +1 rate up rate down Reply