Yellow Cab Co-Op, the largest taxi firm in the city – which happens to be where Uber is headquartered – is about to file for bankruptcy, according to a letter to shareholders obtained by the San Francisco Examiner.
The firm has been struggling with “serious financial setbacks” that are partly the result of rising competition from the likes of Uber and Lyft.
In the letter, Yellow Cab Co-Op president Pamela Martinez said that while its usual taxi service will continue for now, the firm has to restructure if it’s to survive.
“On an annual basis, over five million passengers are transported in Yellow cabs,” Martinez wrote in the letter. “We used to have more and our goal is to get them, and even more, back.”
She added that it was important 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.”
A number of drivers who started out by earning a living with a traditional taxi firm have switched to companies like Uber in the hope of better pay and more flexible hours.
In a bid to compete more effectively with newer companies like Uber, Yellow Cab recently launched its own mobile app offering riders many of the features found on its rivals’ apps. Its marketing spiel also points out that it doesn’t use surge pricing, a much-criticized system that can sometimes lead to costly rides for Uber users.
Traditional taxi firms around the world have been fighting Uber in the courts in a bid to get the service banned. They’re unhappy that the company isn’t subject to the same regulations as those operating in the licensed taxi industry, a situation that allows it to charge lower fares.
Yellow Cab’s predicament is certain to cause real concern among other taxi operators, with many fearing that Uber’s rapid growth could have the same impact on their own services in the near future. For some, the response has been to up their game, though unfortunately such efforts don’t always go to plan.
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