Yellow Cab Company in San Francisco Files for Chapter 11 Bankruptcy

by San Antonio Attorney

One of San Francisco’s oldest and largest taxi companies filed for Chapter 11 bankruptcy on Jan. 22. Yellow Cab is one of the many traditional taxi companies that went bankrupt due to the tight competition against upstart competitors such as Lyft and Uber.

Pamela Martinez, the president of Yellow Cab cooperative, stated in a court filing that the taxi company is dealing with many challenges, such as numerous accidents-related lawsuits and liabilities, a major slump in ridership and rivalry from mobile ride request company services, , which have also gradually pirated the co-op’s drivers.

According to the company, it faces around 150 open claims that could set them back $10 million.

The dilemma of yellow cab operators in many areas in the U.S. illustrates app-based riding services are little by little displacing the old taxi business model, compounding the pressures that taxi companies are already dealing with.  For that reason, many taxi companies filing for bankruptcy.

Yellow Cab taxi service in Chicago sought for bankruptcy protection in 2015, pointing out that some of its financial troubles were caused by competition against the new app-based riding services. The company resorted to bankruptcy after it was ordered to pay around $26 million for being held liable to an accident that caused brain damage to a victim.

Experts in the industry say that traditional taxi companies like Yellow Cab are obviously threatened by the latest competitors, and they expect more companies will close their operations as a result.

Last year, New York taxi mogul Evgeny Freidman filed bankruptcy protection for his many cab companies in order to prevent his creditors from taking his 46 medallions, a portion of his at least 860 that he controls.

Bankrupt San Francisco’s Yellow Cab, which has around 520 taxis, intends to continue its normal operations throughout the Chapter 11 proceeding.

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