Yellow Cab Co-Op, San Francisco’s largest taxi company, is gearing up to file for bankruptcy, according to a latest report from San Francisco Examiner.
In a letter to its members sent last month, the company said that it is in the midst of serious financial setbacks and is faced with fiscal obligations that far exceed expected income. It cited the challenges stemming from other ride-sharing service providers such as Uber and Lyft, along with rising lawsuits from traffic collisions as the reasons behind the crisis, SFExaminer reported.
Forbes reported that Uber and Lyft recruit drivers with hefty bonuses, and also offer more flexibility in hours, which makes it difficult for the old taxi companies to retain the best drivers.
“We need to have not just more drivers but drivers who are happy to be behind the wheel of a Yellow cab because we offer the best opportunity to make a living in a taxi,” Pamela Martinez, President of Yellow Cab Cooperative Inc. wrote in the letter.
Yellow Cab representatives told the media house that regular cab operations will not be affected in the near future and the company has no plans to close if it can successfully restructure.
“Bankruptcy will allow us to reorganize our financial status and relieve us of certain unsecured debts. It also means that our regular business will continue and we will be able to meet all our expenses necessary to operate our business”, Martinez said.
Jim Gillespie, former president of Yellow Cab, confirmed to the Examiner that the co-op would file for bankruptcy soon, but did not reveal a specific date. He pointed out that the mounting lawsuits ended up hurting the company’s bottom line.
“It was a combination of the number of claims but also the high awards and high settlements that got to us well over a million dollars in a couple cases,” he said.
