San Francisco’s largest taxi company, Yellow Cab Cooperative Inc., filed for chapter 11 bankruptcy protection Friday, adding it to a growing list of traditional taxi companies that have been feeling the burn from ride-sharing startups Uber and Lyft.
“We are in the midst of serious financial setbacks,” Pamela Martinez, president of San Francisco’s Yellow Cab reportedly said in a letter to its members last month. “Some are due to business challenges beyond our control, and others are of our own making.”
According to the Wall Street Journal, part of the San Francisco’s Yellow Cab’s liabilities includes $8.1 million in reparations paid to a woman who sued the company after becoming paralyzed in a collision. The co-op is also reportedly facing some 150 open claims valued as high as $10 million.
An article in Market Watch suggests ride sharing companies, like Uber and Lyft, that employ the independent contractor model might not be shielded from the same plight as San Francisco’s Yellow Cab co-op. Multimillion-dollar lawsuits stemming from injuries during rides could wind up catching up with the startups. Uber, which is currently valued at more than $50 billion, is better able to afford such a scenario.
The Journal notes that San Francisco recently waived fees for taxi-license applications and renewals, in an effort to boost the Yellow Cab’s business output. However the move proved futile, as the waivers did little to save the plummeting industry. San Francisco’s Yellow Cab also recently released its own app, Yo Taxi, to evolve with the times. Despite filing for chapter 11, they reportedly plan to continue operating normally.
Both Uber and Lyft have been poaching Yellow Cab drivers for their own enterprises. Breitbart News had previously reported on Uber’s tendency to also poach talent from large companies like Google Maps and even from Wall Street.
San Francisco’s Yellow Cab has also provided some incentives for passengers issuing promos on its social media accounts:
— Yellow Cab Co-op (@YellowCabSF) January 12, 2016
Follow Adelle Nazarian on Twitter @AdelleNaz.