A year ago, it seemed as if Green Cab Taxi had won the golden ticket--or, to be precise, the golden licenses. King County, which hadn't issued a new taxi license in 17 years, agreed to give away 50 of them to a fledgling, mostly Ethiopian-run company that had agreed to adopt new eco- and labor-friendly policies in a sometimes-abusive industry. Other competing cabbies were incensed at the way Green Cab won the coveted licenses and sued (see "Taxi-Jacked," SW, March 26, 2008). Yet now Green Cab stands on the verge of financial ruin.
Peter Mumford
Seven of these have been repossessed.
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"We have a month," estimates Habtamu Aboye, one of 23 individuals who joined together to form Green Cab. "After that, Green Cab is going to shut down."
The company has laid off its manager and abandoned its sprawling office space in Tukwila for a smaller locale in Kent, according to Aboye. The Tukwila landlord is suing Green Cab for breaking the lease.
Green Cab is also "way behind" on payments for the 45 pricey new Toyota Priuses it bought, according to an e-mail sent earlier this month to King County Executive Ron Sims by another Green Cab owner, Abebe Adugna, who was seeking Sims' help for the struggling venture. Use of a hybrid-electric vehicle was required by the terms of the county contract.
Craig Leisy, manager of the city of Seattle's Consumer Affairs Unit, which issues licenses and monitors insurance for all taxis, says his department called the county when it saw that insurance on some Green Cabs had lapsed and was told that seven of the cars had been repossessed by the bank. Aboye says the company is still negotiating with its lender (who, according to the car titles, is Cashmere Valley Bank of Wenatchee).
"We borrowed money from a bank for $1.6 million for the cars by giving 15 homes as guarantors," wrote Tigabie Tekeba, a former "community builder" for the Seattle Housing Authority who served as Green Cab's leader before falling ill last year, in a January 2008 e-mail to the county. The e-mail, describing the financial strain Green Cab was under even then, is part of federal court records. Tekeba's house was subsequently scheduled for a foreclosure auction, as was that of another Green Cab owner. Both homes still remain in their names, according to county records.
Aboye attributes Green Cab's predicament largely to the lawsuits that delayed the company's start. The county first announced the award of licenses to Green Cab in September 2007. Green Cab promptly started gearing up. According to the January e-mail from Tekeba, the company began paying expenses that included car insurance at $258,000 a year, rent of $60,000 a year, and dispatch equipment at $90,000 a year—all in addition to the $1.6 million for the cars.
Yet the company didn't get its licenses until nearly a year later, in August 2008. First, a newly formed alliance of cabbies filed suit in King County Superior Court, resulting in a temporary injunction. The suit objected to the county's opaque process of awarding new licenses to Green Cab without holding any lottery or Request for Proposal, and many of the aggrieved parties suggested that campaign donations to Sims by Green Cab members had something to do with it. Sims, soon leaving for a job as deputy secretary of the federal Department of Housing and Urban Development, denied the charge.
Then the county backtracked and declared it would hold an RFP. It selected Green Cab all over again. A reconstituted group of cabbies sued the county once more in federal court, claiming that the process was still rigged and therefore unconstitutional. (A ruling in that case is expected soon, according to Barbara Duffy, a lawyer representing the plaintiffs.) But no injunction was made. Last summer, Green Cab was finally free to put its Priuses on the road.
By the time Green Cab started operating, it had a different problem: the economy. "There is no business," Aboye says.
Seattle's Leisy says that in recent months taxi trips have been down by as much as 30 percent compared to last year. Even so, he says, the number of people who want to drive taxis has been rising due to unemployment. The city once ran two classes a month for new drivers; it now runs three or four.
But Green Cab itself can't get drivers, according to Aboye. He notes that the company is obliged to operate differently than other cab companies. Most cabbies are self-employed. They either own a license or lease a taxi from someone who owns one. But the county, trying to ensure that drivers could earn a living wage and benefits without being subject to the whims of license owners, mandated that the new company be run according to a traditional employer-employee relationship. Green Cab would pay drivers regular salaries and allow them the opportunity to unionize.
But many drivers like the independence of working for themselves. And Green Cab can only afford to pay $8 or $9 an hour, Aboye says, whereas non-employee drivers in the region average $10.50 an hour (without benefits), according to a recent Seattle survey. Unable to recruit drivers under those conditions, Aboye says he and other Green Cab owners are driving the taxis themselves, rather than hiring others to take the wheel. Right now, only 18 Green Cabs are on the road, even though the county was prepared to issue 50 licenses.
