The Secret Is Out

News of taxi companies overworking drivers, in the news ...

It's no secret to drivers for the Big Taxi Companies that they are forced to work scores of extra hours each week just to make ends meet. But to consumers outside the industry, that's not well known. Thanks to some big stories recently, that secret is out. While on one hand a judge at the Colorado Public Utilities Commission says there are enough cabs in Denver already, another hand of the PUC is fining Yellow and Metro cab for having drivers on the roads way more hours than they should ....

This story, orginally from the Denver Business Journal is now running in sister papers as far away as Seattle:

PUC charges cab companies with overworking drivers

Denver Business Journal - by Cathy Proctor

The Colorado Public Utilities Commission (PUC) thinks some taxi drivers are spending too many hours behind the wheel.

PUC administrative law judges have rejected all or part of plea deals between state regulators and two of Denver’s taxi companies over allegations that cab drivers worked too many hours.

The cases stem from a February 2009 state audit of between 45 and 60 cab drivers waiting for passengers at Denver International Airport. It found some drivers for all three of Denver’s cab companies at the time — Denver Yellow Cab, Metro Taxi and Freedom Cabs Inc. — had violated the state’s rule that drivers limit their work hours to 80 hours in eight consecutive days.

At the time, the PUC permitted the three cab companies to operate a total of 942 cabs in Denver.

“This is a consumer-protection issue,” said Terry Bote, PUC spokesman. “We have no evidence, no data, that drivers are out there involved in accidents because they’re fatigued. But we’d like to make sure that doesn’t happen, and we want to make sure the companies and drivers are following the hours-of-service rules.”

Freedom, which was cited in November 2009 for 29 violations of the maximum-hours rule, based on the audit, faced a fine of $79,500. It paid $39,875, a 50 percent reduction allowable if paid within 10 days of the citation, and the case was closed in December 2009.

“We educated our drivers,” said Max Sarr, Freedom’s operations manager. “Instead of making them pay for the fine, we educated them and told them that if it happened again, they would have to pay the fine. I’m not worrying about my drivers working over hours.”

Metro Taxi and Yellow Cab chose to negotiate plea deals with state regulators involving thousands of dollars in fines, grace periods and periodic reviews of drivers’ hours.

But on Aug. 20, Administrative Law Judge Mana Jennings-Fader rejected Metro Taxi’s entire plea deal. Metro Taxi can appeal that decision to the full commission, pay 50 percent of its original $148,500 fine within 10 days, or try to hammer out a new deal in a Sept. 30 hearing before Jennings-Fader.

Kyle Brown, Metro Taxi’s general manager, declined to comment about the decision, citing pending litigation, but insisted the company’s cabs were safe. “We are safe, we’ve been safe for the last 25 years and nothing bad has happened due to an hours-of-service-related incident.”

Metro Taxi was charged with having between 10 and 20 drivers violate the maximum-hours rule 54 times, according to the Aug. 20 decision.

The plea deal called for Metro Taxi to pay a $40,000 fine, with the remaining $108,500 fine suspended as long as the cab company agreed to prevent drivers from working too long and to submit quarterly reports of driver hours.

In return, the PUC staff offered to give the company a grace period of 18 months after the commission approved the deal. During the first six months, the state wouldn’t issue citations against Metro Taxi, if its drivers were found to be working too long. During the remaining year, state regulators might issue citations, depending on how hard regulators believed Metro Taxi was working to comply with the plea deal, according to the decision.

Jennings-Fader wrote that the plea deal “is not just, is not reasonable and is not in the public interest.” The judge also noted Metro Taxi had 16 violations of the rule in 2004 and paid a $2,200 fine.

Another administrative law judge, Harris Adams, ruled Aug. 17 on the plea deal between state regulators and Yellow Cab.

Adams allowed a $50,000 fine against Yellow Cab to stand, with an additional $115,000 suspended, if Yellow Cab files quarterly reports with the PUC about drivers’ hours for 18 months. But he rejected an 18-month grace period from future fines that the cab company and PUC staff had negotiated.

Yellow Cab had been charged with 60 violations of the rule by three drivers audited at DIA in February 2009, according to the decision.

“Denver Yellow Cab has accepted the settlement agreement as modified by ALJ Harris Adams and will abide by its terms,” said Richard Fanyo, the attorney with Dufford & Brown PC who represented Yellow Cab before the PUC.

Fanyo said Yellow Cab now has better information on drivers’ hours than it did in February 2009, and has a system to check its drivers’ log sheets. Drivers who may be violating the maximum-hours rule are called in for a talk, and could be subject to firing or fines, Fanyo said.

Fanyo said Yellow Cab’s taxis were safe, due to the new monitoring system and the driver training programs.

Tom Russell, an attorney for Mile High Cab, which is fighting for state approval to become a new Denver-area cab company, said having drivers log too many hours on the road contributes to the belief that Denver has too many cabs. Fanyo rejected that assertion.

“These are events that occurred a year and a half ago, all based on DIA,” Fanyo said. “That’s old news. It’s just coming out now because the administrative process takes a while.”

Senator Chris Romer supports Mile High Cab

State Senator Chris Romer has written to the PUC supporting Mile High Cab's application.

Senator Romer, a member of the Senate's Transportation Committee, writes that "The intent of the Legislature is passing HB 1227 was to open the taxi cab market to new cab companies and offer greater choice to consumers, rather than create only a single new cab company."  See his letter here.

Romer, a Denver Democrat, represents Senate District 32, a district that includes parts of Jefferson and Denver Counties.

Mile High Cab has applied for authority to operate in Adams, Arapahoe, Denver, Douglas, and Jefferson Counties.  The 150 Mile High Cabs would be one additional cab for every 16,000 persons living in these counties and one more cab for every 25 square miles.

If you support lower fares, better service, and more competition in the cab business, please let the PUC know.  To send email to the PUC, click here

9news talks to drivers about high lease rates and illegally long hours

What happens when Taxi companies charge drivers high lease rates?

Apparently, drivers drive way too many hours, according to the Public Utilities Commission. Denver's Channel 9 reports that all three corporate cab companies, excluding the driver's cooperative of Union Cab, stand accused of violating the so-called "80-in-8" rule, meaning drivers have been found to be driving more than 80 hours in eight consecutive days.

To be fair, it's not the driver's fault. Facing weekly lease rates of sometimes more than $900, drivers have to work long hours, since they don't make a dime until they pay The Man. But is that safe? Having drivers on the road so long? And is it fair to the drivers and their families?

Since Mile High Cab is owned by the drivers, they just need a weekly lease rate that pays operating expenses. They don't have to pay off shareholders, or in the case of Yellow Cab, a corporation based back in France. Mile High drivers would pay only $250 a week, so they can make a living driving legal hours.

Why wouldn't that be better, PUC?

Mile High Cab Back In the News

The Denver Daily News writes about Metro Taxi violations ...

Cab drivers want new company
Say alleged violations against Metro Taxi is indication that Denver needs new company
Peter Marcus, DDN Staff Writer
Tuesday, August 24, 2010

A group of taxi drivers seeking to open their own cab service is using recent alleged violations against Metro Taxi as an example that the Denver area could use another company.

Mile High Cab, a group of about 150 local cab drivers fighting to open their own service, points out that Metro Taxi is currently facing 54 alleged violations for allowing drivers to work more than 80 hours in eight consecutive days.

The group of drivers says if companies like Metro Taxi are violating the so-called “80-in-8” rule, then that is an indication that there is not enough cabs on the road, but instead too many tired drivers.

A proposal by Mile High Cab to open a new company was rejected by an administrative-law judge earlier this month because the judge ruled that the new company would damage existing local cab companies. An attorney for the group is asking the Colorado Public Utilities Commission to overturn the judge’s ruling.

To read the rest of the story, click here.

Can You Hear Us Now?

Mile High Cab is riding the airwaves ...

Listen to Mile High Cab on community radio station KGNU, Monday morning drive time. Link is here.

And on Saturday morning, Mile High Cab was on the Jeff Crank radio show in Colorado Springs. Link is here.

Asleep At The Wheel?

METRO CAB ADMITS DRIVERS ON THE ROAD TOO MANY HOURS

Denver’s largest taxicab company, Metro, already attempting to block a driver-owned taxi cooperative from serving Colorado customers, has admitted to violating state rules at least 54 times by allowing its taxi drivers to work illegally long hours.

A state administrative law judge on Friday rejected a plea bargain worked out between state auditors and the company, and instead ordered a full hearing.

While Metro Taxi claims the five-county Front Range market is adequately served by the existing four companies, documents filed Friday with the state Public Utilities Commission show Metro has admitted to 54 violations of the so-called “80-in-8” rule. 

The rule prohibits drivers from working more than 80 hours in eight consecutive days.

A startup company, Mile High Cab, is seeking to enter the Denver market, offering lower fares, better service to the suburbs, and eliminating surcharges for extra passengers or bags. A PUC judge earlier this year denied the 150-cab license after hearing from Metro and others that there are enough cabs already in Denver. The judge ruled that the lower prices and competition might end up harming consumers.

“What you have is Metro saying there are too many cabs out there already,” said Tom Russell, representing Mile High Cab. “Sure, if your drivers have to work too many hours in order to pay the company the $800 weekly lease rates Metro charges them. Nobody wants to work that much, but they have to. The result is you have exhausted drivers on the roads. And, as the PUC recognizes, that’s a risk for everyone.”

Russell says Mile High as a cooperative would charge its drivers around $250 a week. That would allow them to make a decent living working a safe number of hours. 

“We heard testimony from Union Taxi’s drivers that their lower lease rate allowed them to take their children to school, go to religious services, continue their educations, and, most importantly, get enough sleep,” Russell said.

In a ruling issued Friday, Aug. 20, state Administrative Law Judge Mana Jennings-Fader found Metro agreed to a plea bargain in which they would pay $148,000 in fines. But state PUC staffers agreed to forgive $108,000 of that if Metro paid $40,000 up front and abided by the rules going forward. Metro faced a maximum penalty of $248,000, the ruling states.

Metro also agreed to file quarterly monitoring reports to the PUC, but the company asked for a 180-day grace period, claiming it first needed to learn how to monitor its own drivers.  The proposed settlement also bars the state from imposing penalties on any future 80-in-8 violations that Metro self-reports.

And, in the proposed settlement, the state agreed Metro didn’t have to report on any driver who drove an unsafe number of hours if he no longer worked for the company. The judge found that meant that Metro could monitor its drivers, release any who had broken the rules, then simply not report the violation.

Jennings-Fader rejected the settlement as not in the public interest. The judge ordered a hearing Sept. 30.

“The existence of the 180-day grace period undermines Metro Taxi’s incentive to file accurate quarterly reports because, for the duration of the grace period, Metro Taxi is shielded from civil penalty assessments even for violations of the 80-in-8 Rule that Metro Taxi does not report and that Staff uncovers during an audit,” the judge ruled. “The proposed process is not just, is not reasonable, and is not in the public interest because it may hide from the Commission and Staff the very information the quarterly reports are designed to reveal.”

Russell said Denver’s biggest companies, Yellow and Metro, charge such high weekly lease rates that their drivers must drive long hours just to meet the charges, let alone make a living wage. Drivers are contractors under the system, so they don’t get paid overtime for working 12 to 15 hours a day.  And because of the pressure to bring in the weekly fee, drivers jockey for lucrative airport runs at the expense of service in area neighborhoods and suburbs, Russell said.

“The fact is, Denver as a market is underserved. Is it too easy to get a cab in Denver? Is it too cheap? No. It’s a market that would benefit from more cabs and from a company that rewarded its drivers with fair treatment and didn’t demand these unsafe working conditions,” Russell said. “Metro says there are enough cabs on the road. Well, apparently they feel that way because their drivers are on the road way too much to be operating safely. Is it going to take a driver falling asleep at the wheel and hurting someone to finally prove that?”

Mile High Cab is continuing its quest to put more cabs on the road and offer consumers lower fairs. The owner-operators have asked for a hearing before the full PUC board.

Hear Mile High Cab: The Interview

Representing Mile High Cab, Tom Russell on the Mike Zinna show .. 

Mike Zinna is an up and coming radio talk show host on FM 101.5 in Denver, a talk radio station called "The Truth."

Tom Russell talked with Zinna in a high energy discussion about Mile High Cab being blocked from competing in a free and open market, blocked by a judge who feels competition is somehow bad for consumers ... Yeah, Zinna had trouble getting his head around that one too! Listen to the show here. And check out Zinna weekdays from 4-7 at www.truthdenver.com or FM 101.5.

Listen UP! Mile High Cab on the Radio!

Making noise ...

Mile High Cab attorney Tom Russell will be riding the airwaves this weekend. Don't forget to tune in and listen.

Tonight, Friday, Aug. 20, hard-hitting talk show host Mike Zinna has Tom in studio to talk about why the state of Colorado thinks you should pay more for less service when it comes to taxicabs in the five-county region. Should be entertaining ... 101.5 FM, 730 p.m. ... or listen online at http://www.truthdenver.com/

Then tomorrow, Saturday, Aug. 21, Colorado Springs host Jeff Crank will "Crank It Up" with Tom on his show from 8-10 a.m. on AM 740 ... and if you're not in the Springs, you can listen live at http://www.kvor.com/

Spread the word, share with friends. Why should drivers be forced to work for someone else instead of starting their own company? Why should consumers have to pay more for less service? What does the Colorado State Government have against creating 150 new jobs?

Ask your local representative and write to the PUC by clicking here.

We're a National Issue!

Nationally Distributed AOL News Writes About Mile High Cab

Here's what AOL writer Bruce Kennedy wrote:

Need a Taxi? Drivers Want To Expand Demand for Cabs

By BRUCE KENNEDY

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."

Real People React ...

Do You Think Competition and Lower Taxi Fares are Bad?

Mile High Cab only wants to compete, but the state Public Utilities Commission feels competition, and lower fares for consumers, is bad for the big companies that have a lock on Front Range taxi service.

One reader has had enough, she took the time to write to her state senator and she shared the letter with us.

If you're tired of big government blocking free enterprise, better service, and a fair way of doing business, contact the PUC at Doug.Dean@dora.state.co.us

Here's the letter one fed-up reader had for her Senator, Thanks!

Dear Senator Mitchell,

This brief letter is to alert you to a worrisome free market situation in the Denver metro area and, as a member of your district, to recruit your assistance.

According to the Denver Business Journal, "Mile High Cab wants to operate 150 cabs in the counties of Denver, Adams, Jefferson, Arapahoe and Douglas. It filed a PUC application to start operations in September 2008. Administrative Law Judge Paul Gomez, tasked with hearing arguments and recommending a decision to the commissioners, denied the application in mid-July.

"He said adding a new cab company — one that offered essentially the same cab service as the four existing companies — would drag down all the cab businesses and result in lower service for customers, he said.

'When a market is at or near capacity, a homogeneous, undifferentiated entrant such as Mile High, does not serve the public interest,' the ruling said."

Senator Mitchell, as you know, in America free enterprise is a widely-held tenet of our American liberty. When Judge Gomez determined that Mile High Cab would be "hurting" competition by starting business in several Denver-area counties, he demonstrated his obvious lack of knowledge of, or respect for, laissez-faire. I appeal to your sense of the free enterprise system in America, and ask you to encourage the PUC to overturn Judge Gomez's ruling regarding Mile High Cab, allowing the spirit of American business to continue to take its course as it should. We owe it to the citizens of our city, state and country."

What a great letter. Thanks for your support!

The Word Is Spreading ...

Read What The Denver Post Wrote About Mile High Cab:

BUSINESS

Taxicab startup appeals Denver roadblock

By Greg Griffin
The Denver Post

A startup taxi company owned by drivers is trying to win approval to launch service in the Denver area but may face an uphill climb.

An administrative-law judge recently denied Mile High Cab's application to operate a fleet of 150 taxis in Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas and Jefferson counties.

Judge Paul Gomez wrote that Mile High's entry would harm Denver's existing cab companies economically and "impede the ability of those carriers to provide safe, economical and efficient service."

Mile High this week filed an appeal of the decision with the Colorado Public Utilities Commission, which regulates taxi service in the state and will make a final ruling.

There are four cab companies in the Denver area authorized by the commission to operate 1,262 taxis. Gomez agreed with experts for Metro Taxi, Denver's biggest cab company, who concluded Denver's supply of taxis is at or above capacity.

"When a market is at or near capacity, a homogeneous, undifferentiated entrant such as Mile High does not serve the public interest," Gomez wrote.

An attorney for Mile High said its entry would benefit the public. Mile High would charge 25 cents less per mile than two of the existing cab companies, would not charge extra for additional passengers or baggage and would offer superior customer service, said attorney Thomas Russell.

"Competition of another firm is good for the public interest. . . . There's widespread dissatisfaction with cab service in the Denver area," he said. "If there are too many cabs, how come everyone has to wait so long for one?"

In 2008, Colorado lawmakers eased restrictions on new entrants into the regulated taxi market. Companies must prove they have adequate financial and managerial resources, but they no longer have to show a need for their services. Still, new service can be barred if existing taxi operators prove it will be a detriment to the public interest.

The PUC last year allowed Union Taxi to launch service with 220 cabs. Two other startups have applied with the commission to launch service, and Denver Yellow Cab has requested approval to add 150 taxis. The commission has not yet ruled on those requests, spokesman Terry Bote said.

Greg Griffin: 303-954-1241 or ggriffin@denverpost.com

Mile High Cab to Challenge Ruling

Judge Rules Against More Front Range Cabs, Lower Fares

Taxi Drivers Challenge Ruling That Blocks Entrepreneurs and Stifles Competition 

DENVER – It may seem that more taxi cabs and lower fares would create jobs and offer consumers lower fares and more convenience. But a Colorado government official says no, claiming lower prices and competition are bad for the residents of Adams, Arapahoe, Denver, Douglas and Jefferson counties. 

Some 150 experienced taxi drivers seeking to form an employee-owned company, Mile High Cab, are asking the Colorado Public Utilities Commission to overturn an administrative judge’s ruling and let them operate in the five-county area and compete in a free market. Taxi service is tightly regulated by state government, and the judge’s ruling blocks fair market competition.

Mile High Cab wants to provide 150 additional cabs – about one for every 16,000 people in the five-county area, or one every 25 square miles. But while state Administrative Law Judge Paul Gomez finds Mile High Cab would be financially stable enough to compete – even with its proposed lower fares and no extra charge for additional riders or luggage – he claims competition might challenge existing companies, and that might be bad for consumers.

“The administrative law judge concluded that Mile High Cab is financially and operationally fit.  But, the judge says that more competition will hurt the public,” says attorney Tom Russell, representing Mile High Cab. “The judge has the law and the evidence wrong.  Mile High Cab will offer lower fares and better service.  These veteran cab drivers just want a chance at the American dream. They aren’t asking for favors or government bailouts, they just want government to get out of the way and let them compete in a free market."

A 2008 report prepared by the PUC’s staff finds Denver’s two biggest cab companies, Metro and Yellow, charged more just to get into the cab than the average rate of companies in 14 comparable large cities. And one, Yellow, also charged a higher per-mile rate than the average. In addition, the study found many Front Range cab drivers complained existing companies set taxi lease rates so high that they had to drive 12 to 14 hours a day just to break even. 

The PUC’s 2008 report states there have been ongoing state “policy efforts to expand the number of companies serving the Denver Metro area and to expand the number of authorized vehicles.” Yet the judge’s ruling would bar a willing startup from entering the market.

Mile High Cab is challenging the Administrative Law Judge’s ruling that competition in the five-county taxi market is bad for consumers. Lower rates and more cabs would help riders across the metro area, from Adams to Arapahoe to Denver counties. Russell and drivers are available for interviews. The story offers readers, viewers and listeners an intriguing view into the misunderstood world of taxi companies and drivers. 

A copy of the Mile High Cab challenge is attached. Mile High Cab operates a blog at www.milehighcab.blogspot.com. Follow Mile High Cab on Twitter at www.twitter.com/milehighcab