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Friday, April 5, 2019 by Ryan Thornton

Austin’s oldest cab franchise calls it quits

After more than 75 years in business, the city’s longest-running taxicab operator, Austin Cab Company, closed its doors on Saturday, March 30.

The franchise had been in business since 1943 and was one of only four taxicab businesses (the city officially caps the number of operators at five) strong enough to compete with the growing variety of transportation options.

Taxi rides across the city have plummeted since Texas Gov. Greg Abbott overrode Austin’s attempt to regulate transportation network companies – aka rideshare operators like Uber and Lyft – with his own comparatively lax regulatory standards in May 2017. Though the city’s mandate requiring transportation network company (TNC) operators to conduct fingerprint background checks on their drivers had given taxis a temporary competitive advantage, Abbott’s House Bill 100 erased that city regulation and instantly gave the market back to TNCs.

The Austin Transportation Department proposed a set of deregulations of taxicab services approved by City Council in June of last year to make them competitive with the influx of TNCs, that, controversially, are not limited by the policies that complicate operations for taxicab businesses.

Of those deregulations, the most consequential was the ability for taxicab companies to set their own fare rates and allowing drivers the option to choose their own vehicle color. The results, however, have not been entirely positive.

Sean McKenzie, who sits on the board of directors of ATX Co-op Taxi, one of Austin’s three remaining taxicab companies, told the Monitor that while the changes are finally shaping up to the advantage of taxicab businesses, things haven’t been perfect so far.

For example, McKenzie said he is still awaiting a decision by the city regarding whether or not they will allow taxicab companies to fluidly adjust pricing based on real-time demand fluctuations, similar to the pricing systems rideshare operators use. He said they are technically already able to adjust pricing based on demand, but are required to submit those changes to the city 24 hours before going to market, a system that is, in his words, “not as smooth as Uber.”

McKenzie also added that the flexibility in taxi color caused new drivers to flock to Lone Star Cab, which welcomed vehicles of any color, saving drivers the cost of repainting their cars. He said the other companies, ATX Co-op included, have been slower to adapt to change, to their own detriment.

Austin Cab, McKenzie said, held on to its own signature color (white) up until the very end. “We all were dinosaurs, they were just a little slower to evolve.”

Regarding the fate of Austin Cab, McKenzie said it was likely a combination of things that led to the decision to close, including its resistance to change but also possibly related to other struggles the company experienced in recent years.

Austin Cab took a blow to its reputation in 2014 when one of its drivers, Sherman Wilkins, stabbed a customer, Jose Herrera, in a heated argument over a fare. Herrera survived and filed a lawsuit against the company and the driver. Last year, a Travis County jury found the company liable for hiring Wilkins despite knowing about his criminal record, awarding $1.02 million to Herrera.

Ronald Means, former general manager of Austin Cab, said the company would not comment on the decision to end business.

According to Jason Redfern, a parking enterprise manager with ATD, a large number of the roughly 30 taxicab drivers previously contracted with Austin Cab will be moving to Lone Star Cab. Redfern said ATD is moving as quickly as possible to issue new cab numbers to those drivers to get them back on the road as soon as possible.

The remaining taxicab companies serving Austin are ATX Co-op, Lone Star Cab and Yellow Cab Austin.

Photo via Twitter.

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Key Players & Topics In This Article

Austin Cab Company: One of three taxicab companies in Austin.

Transportation Network Companies: Companies that provide transportation services through applications such as Uber or Lyft.

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