While I wasn’t paying attention, a cab company closed. This shouldn’t be surprising. Whatever their own problems, Uber and Lyft have solved many of the problems of the taxi business and, as a plan, the latter seems to me rather uncompelling.
But this particular taxi business was one I worked at in the 1990s. I dispatched and drove, eventually acquiring my own cab. I left when I discovered the company had rotated me off their insurance to cover other cars while still collecting premiums from me.
Greg McCord, owner of the Marin-Sonoma Taxi Cab Co., was short on details about why he decided to close the business.
“There’s not really much to report, we just closed it. I’ve been doing it a long time and that’s the benefit of owning your own business. You can sell it, close it, do what you want when you’re done,” McCord said.
Robert DeWalt, former operations manager for the Marin-Sonoma Taxi Cab Co., said he feared the business would decline after his retirement last year.
“I worked for the company through about three or four owners for about 40 years,” DeWalt said, adding McCord was more interested in operating Hattar Motorcycles in San Rafael and his other motorcycle shops than running the taxi business. “Over the years, he just shaved all the company off to buy his motorcycle shops.”[1]
That Greg McCord would be so cavalier about drivers is utterly unsurprising to me. It was in the taxi business that I began to understand how capitalism really works.
In the taxi business, I learned that no one—absolutely no one—is in business to make you rich and I had my first experience with the disposability of workers. As Don Malvey (whom I knew only in passing) put it, “It [the company shutdown] created a pretty serious situation for a lot of drivers who have to pay rent and buy food. It’s not like we’re the top 1 percent of the economy.”[2]
But McCord, like all taxi company owners, could count on an unlimited supply of drivers desperate to work. And in the taxi company business, which is a different side of the business from driving, the way he made ‘his’ money was by leasing cabs to drivers for a fixed fee, regardless of how much money the driver actually could make. When I worked there, the normal ‘gate’ (lease fee) was $80 for a ten-hour shift. The gate included dispatch services, insurance, (inadequate) maintenance, and, of course, the car. But drivers also had to pay for gasoline and corruption is rife, requiring ‘tips’ to, well, just about everybody else in the business to ward off. And if a customer passed a bad check or the driver couldn’t verify a credit card or company account, the driver could simply be out the money.
In short, the taxi company business is about transferring business risk from the company onto drivers who generally really can’t afford to assume the risk. It is about leasing as many cabs—regardless of market conditions—as one can get away with, because that’s how the companies make their money, not actually by serving customers. More than once I heard a company owner justify the arrangement saying s/he also didn’t get a share of the really long trips—which are also, although a cab company owner will never admit this, exceedingly rare.
For a taxi company, drivers are an inexhaustible resource to be utterly exploited. And drivers are generally people who can’t find regular jobs (yes, I was in that category, even then), so they are uniquely vulnerable to abuse.
For me, my years as a taxi driver were years of sheer financial terror. I would work five or six days a week and I would start each shift knowing I was already in the hole, owing the company money. As an evening driver, my busy period occurred early in the shift—and the money I made then went to pay for “gas and gates,” as we called it. Even if I managed to break even in the early hours, there usually wasn’t much business in the later hours.
I did try a day shift for a while. I’m not a morning person, there were many more “dumpers” (short trips that aren’t worthwhile), and, if anything, I made even less money than as a night driver. So I returned to driving at night.
After I learned of the McCord’s insurance fraud (naturally, he blamed an underling), I briefly went to work for Sausalito Taxi. As I saw how seasonal the business was in that town and feared my net might actually go negative, I went to Luxor Cab in San Francisco. I eventually got sucked into the dot-com boom, during which the cab companies added many, many more cabs to their fleets (the City and County of San Francisco added thousands of medallions), so when the dot-com bust came, I found it impossible to make any money and I haven’t been gainfully employed since, despite finishing a B.A., M.A., and Ph.D.
- [1]Megan Hansen, “Marin taxi company abruptly shuts down, leaves 60 people jobless,” Marin Independent-Journal, May 3, 2015, http://www.marinij.com/article/NO/20150503/NEWS/150509949↩
- [2]Megan Hansen, “Marin taxi company abruptly shuts down, leaves 60 people jobless,” Marin Independent-Journal, May 3, 2015, http://www.marinij.com/article/NO/20150503/NEWS/150509949↩