About 125 drivers for Airport Cab, Minneapolis Yellow Cab and Town Taxi protested Wednesday in New Hope at the headquarters of Taxi Services Inc., the company that owns them, expressing frustration with a targeted rate change.

A long queue of cabs lined the frontage road along Hwy. 169 after morning rush hour.

At issue was a rate reduction between the cab company and outside organizations -- health, nonprofit and educational -- that negotiate contracts for service. Drivers said recent changes have resulted in a discount of as much as 50 percent for those contracts, making it impossible to earn a living in their jobs. Pint countered that such a deep discount occurs only when drivers take passengers from the far end of one metro fare zone to the far end of another zone; drivers also can experience surpluses when they get the flat fee for a short run across a zone boundary. Taken as an average, he said, the contract rate is about an 11 percent discount from the company’s metered fare.

Drivers work on a contract basis with the company, and Thursday, drivers will be reassessing those contracts, which are renewed weekly. Many had received memos Wednesday that said, "Your lease has been terminated and your auto insurance has been cancelled effective immediately." The company also repossessed several cabs that were still under lease to drivers. During one repossession attempt in St. Louis Park, an employee was pulled out of a cab and assaulted, said company President Steve Pint. The cab was reported stolen.

The company represents about 450 drivers. Pint said there were some service interruptions on Wednesday.

While drivers objected to losing income, Pint countered that the changes were a result of cost-cutting by a client, whom he declined to identify. The difference, he said, was shared between the company and the drivers.

There have been attempts in recent weeks to come to a mutual understanding around the contract rates and other issues, Pint and drivers' representatives said.

Drivers gather

On Wednesday, drivers shivered in small groups around the industrial park where the headquarters are located, before congregating across the street from the firm's offices, waving protest signs.

"We are underpaid, under the federal poverty rate," said Yemane Mebrahtu, president of the Taxicab Drivers and Owners Association. He and others said they believe the company was undercutting them to hold onto lucrative contracts. "It's like going to the casino and playing with someone else's money."

He added that depending on whether or not drivers own their cars, they pay from about $310 a week up to $520 to the company; the service fee covers insurance and licensing. The fee is due, regardless of holidays, sick days, and whether drivers are delivering full-cost or discount fares. Drivers are also responsible for their gas, maintenance and other costs. A recent move by the city of Minneapolis to require taxis to accept credit cards was another blow, they said, as drivers will have to absorb service fees of 5 to 7 percent on full-fare rides.

"We have to work 16 hours a day to cover our expenses," Mebrahtu said. "We don't want to accept anything under the meter rate, and we think that should be banned by the state of Minnesota."

Most companies work on a similar system, he said; although drivers could move, they likely would have to pay to repaint their cabs with a new company's logo and colors.

Company representatives said that drivers' renewal of the weekly contracts is a signal that they accept the terms.

Drivers are welcome, Pint said, to come back into the office and sign a contract agreeing to the price structures. Some already have done so, he said Wednesday afternoon.

"We didn't want this to happen," Pint said. "It's not good for anyone."

Maria Elena Baca • 612-673-4409