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Orange County

3 Firms Set to Take Over Airport Taxi Service

November 22, 2001|JEAN O. PASCO | TIMES STAFF WRITER

Three taxi companies will start ferrying travelers from John Wayne Airport next week after the county determined Wednesday that the firm that now provides the taxi service is incapable of continuing.

County supervisors were told late Wednesday that the airport's exclusive taxi provider, American Livery, which operates American Taxi, will be unable to continue after Tuesday because most of its 140 cars are being repossessed by Ford Motor Credit Co.

"American Taxi has acknowledged that it will not be able to provide taxicab service as required," Airport Director Alan Murphy said in a memo to supervisors.

American Livery filed for Bankruptcy Court protection in April, attempting to reorganize its finances. Last week, a bankruptcy judge allowed Ford to collect the natural-gas-powered taxicabs as early as this week to repay $3.3 million owed for their purchase.

Ford notified airport officials Wednesday that it would seize the cars Tuesday--after the busy Thanksgiving weekend.

Lyle Overby, American's treasurer and principal, said he wasn't aware of the county's termination notice late Wednesday.

"I'm shocked," he said. "I thought we were negotiating a solution [with Ford]. I thought a resolution was being worked out."

A contingency plan created last week calls for a consortium of taxi companies to step in. The companies combined have at least 50 cars that will be used for airport service beginning Tuesday. They are Yellow Cab of Northern Orange County Inc.; Taxi Systems Inc., which operates as Fiesta; and Cabco Yellow Inc.

Travelers will be able to request a taxi from any of the three companies or take whichever cab is first in line for pickups at the airport terminal.

American Taxi took over the county's exclusive contract to serve John Wayne Airport in March 2000.

The company replaced the previous cab company, A Taxi, after it failed to provide proof of adequate insurance. A Taxi had held the airport cab contract for three years.

At the time it was chosen, American Livery had been in existence four months.

In retrospect, airport officials should have been more careful about recommending a taxi company without a track record, Supervisor Todd Spitzer said Wednesday.

During the selection process, American was criticized by competitors as undercapitalized and unable to provide the service it promised.

"The board needs to make it very clear to staff that when they make their recommendations to the board that they place greater emphasis on the financial security and the track record of the company," Spitzer said.

"Obviously, there was a lot of benefit [from the proposal] but you want to make sure you're going with a company that has financial stability."

Spitzer said he was confident the three other taxi companies will step in and provide a seamless transition for travelers.

American's attorney argued in court last week that the company needed more time to pursue five potential buyers.

Attorney Maryann Cazzell of Orange said American's financial difficulties were compounded by the Sept. 11 terrorist attacks, which triggered a slump in airline travel.

Income from drivers dropped $100,000 in September, she said.

Bankruptcy Judge John Ryan said Ford Motor Credit, a subsidiary of Ford Motor Co., had the right to repossess American's 140 vehicles if the company did not present a signed sales agreement by Tuesday. Ford's notice to the county said it would seize most of them.

The muddled taxi situation will continue even with American's departure. The owner of A Taxi, Hossein Nabati, has sued the county for the loss of his contract. He accused county officials of improperly favoring Overby, a former supervisorial aide and a longtime lobbyist.

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