A new way to think about taxi cabs

By Kedir Wako, Dacho Gada, Hassen Ahmed and Abdul Hussen of Portland, Oregon. All four are long-time City of Portland cab drivers and founding members of Union Cab Cooperative.

On Wednesday, Portland City Council has the opportunity to help improve conditions for a whole class of workers with a single, simple vote. Their vote will encourage growth in an industry. It will increase competition. It will improve service. It is the right thing to do.

I'm talking about the opportunity City Council has to approve the first new cab company in Portland in almost 15 years.

A report last spring conducted by the City of Portland found that on average cab drivers work 10-12 hour days, make just over $6 an hour, and pay up to $580 a week in fees to the companies for which they drive. Cab drivers reported conflicts to fixing the system: increase permits to drive and you’ll decrease earnings per driver unless demand increases; don’t increase permits to drive and you’ll continue to have a system with long waits and unreliable service, stifling demand; work long hours and risk driving tired, but work shorter hours and risk losing money for the day; the list could go on.

It is clear to us that the only solution is to offer an alternative cab company model, alongside the companies that are already operating in Portland.

Currently, most cab companies in Portland charge a fee that drivers pay every time they are on the road. The fee pays the company for the use of one of the company’s permits (every cab on the road in Portland must have a city-issued permit, and permits are issued to companies who then hire the drivers) and for dispatching pick-ups to the driver. If it’s a slow night (or week, or month), drivers lose money because the fee is set at such a high rate – they pay more to the company to be on the road than they collect in fares the company dispatches to them.

This model requires drivers to work long hours. It doesn’t provide any benefits, but it leaves drivers free from any work on the business side of most companies. The model works for some drivers, but it shouldn’t be the only option that drivers have to operate in the City of Portland.

Wednesday, City Council could vote to let a new cab company that has pledged to operate under a different model enter the market with new operating permits.

The new company, Union Cab Cooperative, has created a business model that includes 24 hour dispatch and schedules that keep passengers safe by limiting the hours drivers are on the road in each shift, replacing current cabs with alternative-energy cabs, while funding healthcare for drivers and ensuring that drivers make a profit by the end of their shift. In exchange, drivers will operate as a cooperative and share administrative burdens.

By cutting out a for-profit company and operating as a cooperative of cab owner-operators, Union Cab can provide an alternative model that brings competition to Portland’s cab market, offers drivers a broader choice, and puts more cars on the road to expand options for consumers without taking any permits away from existing companies.

It is the solution the cab market is looking for. Given the report on working conditions in the cab industry, it is time to implement change.

This should be an easy vote for our City Councilors.