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Denver taxi drivers' struggle pays off

After a four-year fight, they change a state law easing requirements for aspiring companies. Their taxi cooperative is the first new cab company since 1995.

May 25, 2009|DeeDee Correll

ENGLEWOOD, COLO. — Esam Yousif hovered by his freshly painted taxi, holding the decals that would christen it taxi No. 654.

Once the stickers were affixed and his radio and meter installed, he would be ready to hit the road.

For Yousif, 39, and more than 200 other veteran cab drivers, this month marked a new start in their careers -- as members of a taxi cooperative launched after a four-year fight to increase competition in Colorado's tightly controlled taxi market.

The drivers -- most of them immigrants from Ethiopia, Sudan and other African nations -- got a state law changed last year making it easier for aspiring companies to enter the industry, which hadn't seen a new firm since 1995.

Now they hope to flourish with a business model they say will improve the lot of drivers who struggled to eke out a living working for Denver's taxi companies.

"I worked seven days a week, 18 hours a day, no day off. Sometimes I didn't make nothing for myself," said Yousif, who emigrated from Sudan nine years ago.

Although most other transportation industries have deregulated, the taxi business largely remains regulated across the nation, said Jerry Fruin, an associate economics professor at the University of Minnesota.

In Colorado, state law long required that an aspiring company had to prove why existing firms provided inadequate service -- a standard that was difficult to meet, said Phil Roselli, a Denver lawyer who represented the taxi drivers.

"It was impossible for anybody who wanted to open a taxi business to have that dream come true," said Abdi Buni, who led the drivers' fight and is now president of the Union Taxi Cooperative.

He said drivers also found it impossible to make a decent living.

Cabbies are independent contractors who lease their vehicles from a company at sums ranging from $1,600 to $2,100 per month, with those who own their taxis paying less. Drivers said that it was hard to earn enough in fares to break even and that they had to work grueling hours to make a profit.

Eyassu Ayele, 44, who came from Ethiopia in 1990, said he rarely saw his family; he would leave at 4 a.m. and return at 10 p.m.

"I was making money for the company, not for me," he said. "It was very hard. But I needed to buy milk and bread for my kids."

Banding together several years ago, the drivers pressed for a change in the law that would let them start their own company. Lawmakers passed a bill that requires applicants to prove only that they have a viable business plan, leaving it up to incumbent companies to prove that the new entry into the market would be "detrimental to the public interest."

Deregulation historically has led to increased taxi fares and poor service, said Ray Mundy, a transportation professor at the University of Missouri in St. Louis who researched the Denver market in a 2008 study commissioned by the Denver Metro Convention & Visitors Bureau and funded by cab companies.

Such fare and service changes may seem counterintuitive, he said, but "this is a marketplace where bad actors will drive out good actors."

The taxi cooperative now faces two "very well-entrenched and high-service providers," Mundy said.

He said associations like Union Taxi had not done well in such circumstances. "Although they could prove to be the exception," Mundy said.

This month -- after securing approval from the state's Public Utilities Commission to operate 220 cabs -- Union Taxi set up shop at the local chapter of the Communications Workers of America, which helped the group in its fight. On a recent morning, a lone dispatcher flipped from call to call.

Drivers milled about, some preparing for a day of work, others, like Yousif, waiting for their cabs to be outfitted. Members pay $700 a month to the cooperative, far less than what they paid their former employers.

To Ayele, that translates into working fewer hours. When he recently arrived home at 7:30 p.m., his daughter couldn't believe it.

"I'm happy now," he said.

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Correll writes for The Times.

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