Tevlin: One person's helping hand is a costly fare for another
- Article by: JON TEVLIN
- Star Tribune
- January 28, 2012 - 6:46 PM
The patient was late. So John Shannon waited, and waited, outside Hennepin County Medical Center for his next client, a woman who had a voucher to pay for her ride to the far northern corner of Brooklyn Park. The voucher was paid for by a health provider or social service agency that negotiated a flat fee with the cab company because the client had no other way to get to the hospital.
Fares like this are Shannon's meal ticket, representing a remarkable 90 percent of his rides. As we waited, several cars pulled up; they are the competition, new cab drivers "who slap a sign on the side" and vie for patients who rely on some sort of assistance to get to appointments.
This particular type of customer became an issue recently when more than 125 drivers from Airport Taxi, Town Taxi and Yellow Cab protested a new rate reduction negotiated between the company that owns all three and their large list of clients. Those clients include health, nonprofit and educational organizations that were looking to cut costs. Between 70 and 100 of the drivers have quit or been cut.
The drivers, most of them African immigrants, said the change would substantially lower their income and cause them to work 16-hour days to pay expenses. The angry drivers said they could lose up to 50 percent for some fares, which the company disputes.
Though he's not thrilled with the change, Shannon sides with the company and says the other cabbies are exaggerating the impact. The company let him take me along for a shift. For this ride, a 30-year veteran of the cabbie life received $27. He said it was "pretty close" to what he would have gotten if the trip had been metered. As usual with these contracts, he did not get a tip.
A few minutes later, Shannon got a call for a short ride near where he dropped the first client ($7.50) and then another flat-fare trip to Eden Prairie ($53). In three hours, Shannon had made $87.50. Not bad.
When I told Yemane Mebrahtu, president of the organization leading the revolt, the fares Shannon made, he laughed.
"This is a back stage drama" manipulated by the dispatcher and Shannon for a reporter, Mebrahtu said. "This was very lucky." Mebrahtu said the first trip would run about $45 and that Shannon lost about $20.
Steve Pint, president of Taxi Services Inc., backed Shannon's numbers. He said rates were actually reduced by only about 8 percent. Pint said flat fees are 40 percent of overall business, and he offered that 200 East Africans chose to stay.
Shannon, who said he is happy to be working for Airport Taxi, acknowledged he will lose money due to the new deal, perhaps $25 a day working 10-hour days. He also acknowledges the recent mandate that taxis take credit cards hurts the bottom line by 5 percent.
Like most drivers, Shannon leases his taxi and pays the company for services, such as insurance, dispatching, gas and marketing. He said he makes $23,000 to $25,000 a year. His wife also works for Airport Taxi, so he gets by fine.
Shannon said the company's president "has done yeoman's work to secure the account business. Steve did what he had to do to keep in business," which has kept the company stable in light of increasingly vicious competition. Minneapolis phased out caps on numbers of taxi licenses over the past five years. In 2007 there were 373 cabs and 942 drivers. Today there are 821 cabs and 1161 drivers.
Shannon drove by a long line of taxis downtown, what he calls the alternative to fighting for lower paying contract clients. "They might sit there for an hour, hour and a half for a run," he said. "I feel sorry for some of these guys, but they chose to do it."
Mebrahtu said some drivers revolted because "there are no laws about how taxi cab companies run, just laws that scrutinize drivers."
For example, drivers can't by law turn off meters in order to overcharge customers, yet no law prevents cab companies from turning off meters to lower prices, and deprive drivers, for institutional customers.
"They don't practice American capitalism," said Mebrahtu. "We want to make Minnesota our home. We want to show we are coming to this city to contribute, not to be a burden. But this is about dignity. You should not have to work 16 hours to cover expenditures. Twelve? That's fine."
"I understand some of these guys have families to raise," countered Shannon, whose children are grown. "I won't do 16 hours. Either you live with what you've got, or you find something else."
Mebrahtu said they may just do that. The group will try to change taxi laws at the Legislature, and they intend to do something else.
"We are going to start our own cab company," he said.
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