Yellow Cab in Uber's hometown to file for bankruptcy
07 Jan 2016
Yellow Cab Co-Op, which serves San Francisco, home to ride-hailing apps Uber and Lyft, is preparing to file for Chapter 11 bankruptcy, the San Francisco Examiner reported citing a letter to shareholders it claimed to have obtained.
''We are in a midst of serious financial setbacks,'' wrote Yellow Cab president Pamela Martinez. ''Some are due to business challenges beyond our control and others are of our own making. Today we are faced with fiscal obligations that far exceed expected income.''
The letter is dated 10 December, 2015, only two days after Martinez replaced former Yellow Cab president James Gillespie. The letter stated that documents were being prepared for the bankruptcy filing to move forward ''within a month'' meaning any time now.
According to Gillespie who spoke to the Examiner, Yellow Cab, a cooperative was co-owned by 300 shareholders who had not received dividends since October.
Yellow Cab is the largest taxi company in San Francisco, transporting over 5 million passengers every year.
It has 530 medallion (driver's badge) owning drivers, compared to around 16,000 who drive for Uber, which provides similar services at far cheaper rates.
Taxi industry sources told the Examiner the bankruptcy was a result of fierce competition with digital ride-hail rivals, who are not only drawing away business - but scooping up talented drivers as well.