The economics of cab driving in Tampa Bay

Taxi Drivers in the holding area at Tampa International Airport

The St. Petersburg Times ran an article about the state of taxi cab companies and drivers in Hillsborough County. They quoted me (Tim Fasano) in the article because of this blog. I believe the article hit hard on some very real aspects of the current state of cab driving. 

Jack Nicas went all over Tampa talking with taxi drivers and cab company owners. He went to the holding area at the airport, the major hotels downtown, the club party areas on the weekends and he saw first hand what goes on in our work. This is what he saw at Tampa International Airport.

"For hours under the sun in a lot near Tampa International Airport, a harsh course in economics plays out.
Dozens of taxicabs snake into a queue. Men shout and engines start. The line barely budges.
Rene Jeune is up front now, having waited two hours for one customer. Farther back, Jean Bourdeau watches birds fight. He has just $25 in his pocket for five hours of work.
A few men play cards. Others read. Some doze off.
All tell a similar tale: They work 80-hour weeks, yet take home what a waiter earns in tips — about $200 to $300. Some are said to be homeless, sleeping in their cabs and living for their next fare.
This is the taxi business in Hills­borough County." via www.tampabay.com

Unlike waiters, many taxi cab drivers are barely able to survive. This was not the case before the recession. The economy was good then. That is why I stayed with it for so many years. When the Great Recession hit OUR EXPENSES REMAINED THE SAME AND EVEN WENT UP! 

There is no other way to say it-United Cab use to have a call count of over 2,000 on weekdays, and over 3,000 on weekends. There are days now when we don't crack 700, and with 262 cabs, you figure that out. 

We need the meter to be raised so we can recoup what we have lost. In other business (even transportation) they pass the cost off to the customer. However, with taxi leasing companies, the driver is the customer and we bare all burdens and cost. 

You would think that a cab company would want all of its drivers to prosper and be successful. I believe that if they marketed the company to increase the base line of customers over time. The drivers and the company would all share in a cash party. However, when accountants run companies, their shortsightedness becomes contagious, and whatever visionary may be at the helm, he will shortly be converted by a spreadsheet.

"In 1967, the manager of the only cab company in town told the Tampa Taxicab Commission his drivers made about $112 per week. Adjusted for inflation, that's $742 in today's dollars.
Drivers were employees then, with health insurance, vacations and bonuses, city records show. But in 1975, the Yellow Cab Co. jumped on a national trend and made its drivers independent contractors. The agreement cost cabbies their benefits but let them keep whatever they made.
At the time, Yellow Cab manager Nick Cambas told the Tampa Times: "This should be the answer to those squawking about the little man not having a chance to make it in business."
Thirty-six years later, the little man still awaits his chance.
Drivers today say the system leaves them poor and at risk. Their predicament is compounded by a lack of choices: Two companies control 87 percent of the county's permits.

via www.tampabay.com

Adjusted earnings have not followed the taxi cab drivers nationwide that work on a lease system. All the major cities (except Las Vegas) use a lease system. Most of their drivers struggle to make a subsistence living. I can deal with being poor but as I get older, it would be nice to have some health insurance or Workman's compensation. If I am injured in a car accident today, I have no coverage. I have no pension or retirement. I have nothing, and I am one of the better drivers with over sixteen years experience.

I thought Obamacare would cover me but it will only cover the employees of the cab company. They call that "a prohibited cost" so they will pass that on to the drivers and raise our leases again forcing us to work 16 hours a day 7 days a week. With the price of gas, where is the tipping point?

When the economy collapsed a few years ago, drivers say they shouldered the burden. Their customers vanished, but the companies prospered. With unemployment rising, more people decided to give taxi driving a try, which meant more revenue for the companies.
"There was no concession on their part," said Tim Fasano, a United Cab driver who blogs about the industry. "Times have never been better for them. They have more drivers than before the recession and they're getting higher leases now."
Yellow and United managers say lease prices increased because they invested in better dispatching technology.
They also dispute drivers' claims of poverty-line earnings and say their business model is not as profitable as depicted. Their overhead and risk is high, they say. Searcy says Gulf Coast can't fill all its cabs and is "barely paying our bills." Yellow Cab co-owner Louie Minardi said Yellow isn't far behind.
But the most recent statement of income for either company on file with the commission show Yellow Cab reported $451,211 in profits for the first half of 2006.
The company filed for bankruptcy just four years earlier.
via www.tampabay.com

 One thing that I will never understand and my experience in life still leaves me with no reference point to make a judgement, is why do so many grown men continue to work under these circumstances? I am one of them but I truly believed that over half these guys would quit when the recession took hold. That does not seem to be the case. They know how many hours they will have to work and that kids at MacDonald's make more money. Are they just a collection of little boys? 

Many of them do come from third world countries so they have adapted to poverty and seem to have a real tolerance for it. They just keep driving every waking minute of their lives. Many  have died and they still keep going. I will never understand that. 

I do want this stated for the record: The old manager of United Cab was fired a few months ago and Rob Searcy and Paul Hinton took over. They have a completely different management style. They are very accessible and Paul keeps his door open at all times so any driver can walk in and state whats on his mind without any fear of reprisal. That could not have happened under the old regime. These new managers are what I call "drivers managers." I have not seen moral this high in years. The new GPS dispatch system has been a blessing. I know many drivers have had issues. I have not. I can't wait to the Fall time of the year because I just may be able to go on the Camping/fishing trip I have wanted too for years.