About two years ago, Metro Cab earned the right to be among exclusive company in Santa Monica. That exclusivity is all but gone, as Metro Cab needed another taxi company to come to its rescue and take over its obligations of servicing Santa Monica residents.
In less than two weeks, All Yellow Taxi will complete a takeover of Metro Cab, finalizing a $2.8 million transaction that the City Council approved by a 5 to 1 vote on Tuesday.
Metro Cab was one of five taxi companies granted exclusive right to operate in Santa Monica. The council had voted on the top five taxicab operators in 2010. Interestingly enough, All Yellow Taxi was on the outside looking in, ranked sixth by City Hall and unofficially carrying the title “best of the rest.”
With the council vote, All Yellow Taxi will acquire the Metro Cab franchise, which will allow the new company to maintain the same fleet here in Santa Monica. Accordingly, very little will be changed, other than the fact that All Yellow Taxi is not a local company. Even the cars – green-and-white Toyota Priuses – will remain looking the same.
Based in Gardena, CA, All Yellow Taxi’s acquisition of Metro Cab will allow the company to both drop off and pickup passengers from Santa Monica. Prior to the acquisition, as All Yellow Taxi was not one of the top five taxicab companies authorized to operate its franchise in Santa Monica, it could only drop off passengers within city limits.
Only one of the five approved taxicab franchises is allowed to pickup passengers in accordance with the new system that council members established in 2010.
Business and Revenue Operations Manager Salvador M. Vallas said the local Metro Cab drivers would continue to be driving those Priuses.
“The company has committed to maintaining the existing Metro Cab drivers, however the drivers are expected to comply with all Yellow Taxi standards,” Vallas said.
Though dispatch goes to All Yellow Taxi’s base in Gardena, Santa Monica residents will still be able to call a local phone number to contact the company for drop off or pickup service.
However, the proposed franchise transfer and subsequent council approval was not without fanfare.
Several representatives of taxicab companies told council members during public comment that they believed the franchise transfer was absent of fair competition.
A key issue on the dais was process.
Council member Bobby Shriver, who cast the sole nay vote, was concerned how Metro Cab could have been rated as the top-rated taxicab company among the franchise applicants in 2010, only to be in such financial dire straits in 2012 that the sixth-ranked taxicab company had to bail it out.
Shriver pondered what kind of criteria could be in place to determine a company’s capacity to execute a business plan despite its solid financial health and its presentation of a proposal that appeared sound on its face.
“Doesn’t it say something about the process we went through that we did not see that at the beginning?” Shriver asked. “This may not be the last time we have an item like this. Other people may fail, combinations may occur, various things may happen. We haven’t set ourselves up to understand what our other powers might be.”
Vallas responded: “I think the committee that reviewed this did so with the information available at the time. Unfortunately, Metro Cab did not fulfill its commitment by adhering to that business plan,” Vallas said.
Mayor Pro Tem Gleam Davis addressed concerns expressed during public comment questioning whether City Hall may have been significantly involved in the franchise transfer.
“This was not some plan that the city concocted. This was a private transaction, but there’s this franchise issue and the franchise just has to be transferred,” Davis said. “It’s not a transaction where we’re being asked to terminate franchise. Metro has come up with a perfectly acceptable solution to its inability to comply with its obligations.”
Along those same lines, the council does not necessarily have the power to revoke franchise rights in the event of noncompliance.
In 2010, 13 companies submitted proposals to City Hall to earn five franchise slots to operate taxicabs within the city. The top five performing companies judged upon 10 criteria were awarded the franchise rights.
The judged criteria included proof of financial viability, experience, a proposed business plan, fleet composition, senior fare discounts, communications systems, and the like. A maximum achievable score was 200 points.
Metro Cab had earned the top score among the 13 submissions, with Bell Cab Company, Inc., Independent Taxi Owners’ Association, Taxi! Taxi!, and Yellow Cab Company also granted exclusive taxicab service in Santa Monica. All Yellow Taxi finished only 4.4 points behind the fifth-ranked taxicab operator.
Metro Cab was located at 3303 Pico Boulevard in Santa Monica, while All Yellow cab is based at 17800 S. Main Street, Suite 101, in Gardena.
