Taxi Blog

2008 was a year filled with scandal. Idols were exposed, heroes turned out to have ordinary frailties, and financial advisors were exposed as frauds. It was a tough year to have faith in anyone in the public eye, whether they were teen idols such as Miley Cyrus posing in racy photos, football heroes with sweat pants issues, or governors selling senate seats I think we would all agree that it has been a disappointing year for idols, albeit a great year for comedians. Maybe the bottom line is that we will all be more wary going forward before putting our faith and trust in anyone.

I have found that people generally assume that others have the same level of honesty as they do. Those who would swindle their own grandmother out of her last pair of underpants tend to assume that others think and act the same way as they do. In negotiations they look for every possible way that the other party might try to take advantage of them, and they write onerous contracts which try to presage every possibility. But that’s what contracts are for right?

Well, actually, no. The purpose of a contract is to delineate the basic terms of a deal. A good contract will also point out possible breaches of those terms, and will provide methodology for correcting those breaches, and penalties for failure to correct. No matter how good a contract is, however, it is only as effective as the intentions of those signing it. Even the best of documents cannot mandate honesty or good faith, and if you find yourself lying in bed at night staring at the ceiling thinking of ways that your new partner might put one over on you, then perhaps the question you should be asking yourself is not, “How can I use the contract to protect myself?”, but rather, “Why am I entering into a contract with someone that I am sure is trying to screw me?”

Assume that you go forward with a proposed deal and you think you have covered every base in your contract, including a noncompete clause. Now your new acquisition is yours, and four months later the guy you bought the company from starts up a new company doing the same thing in relatively the same neighborhood as you. Are you going to be able to sue him? Is it going to be worth it? At the end of the day if you spend $100,000.00 in legal fees and you get him to stop, can you prevent him from serruptitiously working with your competition anyway, and then moving in full time when his noncompete is up? Many states don’t even recognize noncompete clauses, or they offer very limited protection for them.

Assume the same deal, and the company you are buying is purported to have seventy five vehicles in operation, and they are answering one thousand five hundred calls per day. Given that the former owner was probably not reporting all of his income can you have any certainty that the cash flows he professed to have were at all realistic? Can you afford to pay him at all based on anything not on the books? Due diligence is notoriously inaccurate in this business because very few companies have certified or even audited records, and unless you already know the neighborhood you are buying in very well it is difficult to estimate earnings per vehicle. Add to that the fact that some companies are still on commission, and estimates get even more murky. So the deal is now done, you have kept $100,000.00 in escrow to guarantee earnings for the first year, and it turns out that earnings are $50,000.00 less than your contract guarantee. The seller assumed he was getting none of the escrow, so he has nothing to lose. He sues to get the money, you lose $15,000.00 defending, and he winds up with half the escrow anyway.

We live in interesting times. If you have cash on hand there are many deals to be made, companies to buy, cash flows to add. Take the time to research not only the company you are looking to buy, but the person you are buying from. Talk to some of the drivers and staff. Ask them about calls, accounts, and the boss. Anyone who will not let you speak to at least the key staff, to see if they will stay on, is probably hiding a thing or two. Ask for lists of accounts, and go with the owner to meet the contacts to make sure things are going smoothly, and that they are comfortable with new ownership going forward. Speak to the bank that the company does business with. Bankers will know cash flows better than anyone else. Most importantly, how do you feel about the seller when you sit with him? If you don’t get a good feeling from him then maybe you shouldn’t be at the table. If it turns out that the deal is not the right one don’t be afraid to cut the anchor loose and move on. There’s always another deal. Especially right now.

Happy New Year.

I went through a week or so as a Facebook-a-holic. I don’t know how it happened, it just did. I think it started when I downloaded the application to my Blackberry, so no matter where I was I knew what was happening on my home page. As more and more of my high school peers hopped on the FB (that’s what the regulars call it) bandwagon a pattern seemed to emerge in peoples’ behaviors, including my own. People who did not like each other back then would not “friend” each other now, (I know. The word FRIEND was never intended to be a verb, but it is now on the internet). People who did not know each other well at all back when Tawny Kitane was” hitching a ride on White Snakes’s car had no problems being online pals now though. People were willing to give the benefit of the doubt to people they did not know, but they seemed to be saying en masse that people they knew and didn’t like 25 years ago would never change and were still probably jerks now. Does that make any sense? Didn’t all of us grow up just a bit after high school?

I can’t really distance myself from this phenomenon. I saw the name of a girl who broke my heart at a party in 6th grade when she completely ignored me after I asked her to dance. I’m sure she’s a wonderful person now and a mother of three who would be crushed if someone did this to her son. She probably doesn’t remember the incident at all, and maybe she was just really shy. I never found out because I never spoke to her again. The point is, I know who she is, she knows who I am, we know a lot of the same people online, but I never clicked to add her as a friend because I have this image of her as a stuck up 6th grader. On the other hand, one of my best buds online is someone I never even met. I was willing to take a chance with her but not with someone who dissed me in middle school.

Just as people tend to have long memories for personal trauma and tragedy, companies and industries tend to have extended institutional memories of past failures. In both cases it is a mistake to assume that what was once painful or embarrassing, or in the case of operations what was once unsuccessful or a loser, will still be so today. 6th grade crush and I today might be fast friends and have lots in common. Or she could still be full of herself. There is no way of knowing until you try. Similarly, just because natural gas taxicabs were a failure in New York City a decade ago, or rollups of taxicab companies from the 90’s were operational disasters, it doesn’t necessarily follow that such things would not be more successful today.

Institutional memories are valuable commodities. They give you background as to why procedures were put into effect, why regulations were enacted, and why certain employees, customers and competitors behave the way they do. In certain situations institutional memory can be of great value. When we were in negotiations with Creative Mobile Technologies to place point of sale equipment with advertising capabilities in the rear seats of our taxicabs in Chicago we had the benefit of two previous attempts that had already failed. The first system went bust due to poor technology and inadequate funding. The second fell victim both to overly expensive equipment, and to complicated contracts with multiple parties that hindered our flexibility. Our new endeavor was designed with simple, elegant and relatively inexpensive technology that has capabilities far beyond those of either of the previous two attempts. Just as importantly, however, the contracts are simple two party agreements that enable CMT and us to quickly react to market forces without having to deal with the bureaucracy of two additional large corporations.

Institutional memory becomes a liability, however, when it irrationally prevents corporations from proceeding with potentially profitable ventures. Consider again the case of the rear seat devices. Many companies after living through two failed ventures would simply assume that the project was not meant to be. Such companies would see the idea of “taxi tv” as a failure, rather than the technology and methodology used to attempt the project in the past. By doing so they would eliminate the possibility of correcting the problems of the past and creating profits for the future.

Remembering the past is never a negative in and of itself. Misinterpreting the lessons of the past, however, can be stifling and counterproductive. After writing this page and considering the issues of analysis of the past I decided that I would attempt to befriend my middle school nemesis. I will let you know when I get up the nerve.

Katy Perry kissed a girl and she liked it. Pink had a problem with Katy Perry, not that she kissed a girl, or that she liked it, but that she decided that she would sing about it. According to Pink, and regular readers know how much Pink’s opinion means to me, when she polled her gay girlfriends they thought that the song trivialized being gay. I wonder if she polled her divorced friends to see if her song So What trivializes divorce, or if her depressed friends think that Don’t Let Me Get Me trivializes low self esteem. I think it may have more to do with the fact that So What is currently #2 on the charts and Katy Perry (remember her?) has the #1 spot with Hot N Cold.

While Pink seems to have no shortage of things to say, not unlike myself I might admit, some people never have anything to say when you really need information. Witness Clearchannel Taxi Media, a company that was private, then went public, then was taken private again, and now, I think, it’s a public entity. Their lawyers probably have whiplash. As any of you who deal with CTM know, they are effusive, confident and very communicative when they want to get into your market. As we also know, they are less so as soon as you sign your contract. It’s like CEO Bill Kurr turns into a pumpkin as soon as ink hits paper. His phone and email still work, because you can leave messages, but he never seems to get back to you. If you hear from anyone it’s an underling with no authority to deal with your issue.

Winess the lastest insult. I, and I am sure many of you, received an email last week from Nick Witkowich, who works for ClearChannel Taxi Media. Nick is a great guy who works hard and understands the industry. Unfortunately for Nick, CTM makes him give out all the bad news even though he has no say in policy. The email bemoaned the state of the economy, and informed me that it is a distinct possiblilty that we would no longer receive advertising money for all of our cars in Chicago. Many New York fleets received similar notes, and the Metropolitan Taxicab Board of Trade, which has an almost 3000 car contract with ClearChannel, was asked if they would consider taking less money to help out. Uh, and why would we do that again? The reduction was not the insult, however, it was the fact that we did not even get the courtesy of a phone call, and moreover, the person who sent the email has no authority to discuss the issue whatsoever. It was gutless. INTO THE TAXIBLOG HALL OF SHAME YOU GO!!!

When ClearChannel Taxi Media moved into the Chicago market they were very enthusiastic and we made enormous efforts to help them, for both our own benefit and theirs. When the ordinance was eventually passed allowing advertising, and we had the choice of going with a local company or Clearchannel, we chose ClearChannel. Our decision was based in part due to my past experience with ClearChannel, and in part because we felt that they, more than others, would be upstanding citizens and pay what they said they were going to pay regardless of circumstances. It soon became clear that CTM Chicago was the poor stepchild, and that they were not going to get the staffing and support that they needed to succeed. The sales staff they hired was inexperienced, they did not understand the taxicab industry at all, and apparently they were not very good. Turnover has been high, and sales have been struggling in Chicago from the outset. When they later wanted to switch from a revenue sharing system to a flat fee payment system we agreed.

UPDATE: Met with Bill Kurr and Nick Witkowich and they apologized profusely for corresponding via email. The meeting was cordial, and we discussed ongoing business. They, to their credit, did not ask me to edit or remove my blog page. Where are we now? We are not quite sure. I spoke with Nick Witkowich who was supposed to call Bill Kurr and let him know that we are not pleased, but lo and behold, not only does Mr. Kurr not return my phone calls, he doesn’t return Nick’s either. For now we are still getting paid in full.

While we are on the subject of ClearChannel and contracts, let’s talk a little bit about vendor contracts in general, or more specifically, about how to review said contracts before signing. When we got our original contract from ClearChannel there were some ridiculous clauses which basically gave them the rights to do anything they wanted. They would have had the right to reduce payments, they would have had the right not to pay us for vehicles if they had no advertising for the car that month (but we would not have had the right to get advertising for our empty incomeless vehicles elsewhere), and they would have had the right of first refusal for a new contract after the current one had expired. There were clauses giving them the unrestricted right to call in our vehicles for inspections without compensation, and god knows what else. I cannot even remember at this point.

What we need to remember as operators is that we know our business better than our lawyers do. It is important to give contracts to our lawyers for inspection before signing them, but it is more important that we first review the contracts ourselves, or that we at least confer with our lawyer to let them know what our understanding of the deal is, so that they can ensure that the contract matches that understanding. Lawyers will not know what rate of inspections will constitute a nuisance or a financial burden, they will not know whether you are better off with a revenue share or a flat fee, and they will not be able to judge what ads will annoy your drivers. Read your contracts, discuss them with your lawyers, and don’t be afraid to send them back with changes. If you cannot get everything you want try to reduce the term of the contract, say from five years to two or three, so that you can look for other suppliers and get the terms you want sooner.

And let’s talk about the “right of first refusal”. This is something you never want to give up unless you absolutely have to. What it means is that at the end of your contract the other party has the right to keep you as a client whether you want to go somewhere else or not. You might have issues with their service, or their staff, you might have a better offer somewhere else, but they have the right to keep you as a client for the next contract. You, on the other hand, have no rights at all. A “right to match” clause, as opposed to “right of first refusal”, puts you in a somewhat better place. With the right to match you can negotiate with other companies, get the best deal you can, and then the current company will have to specifically match every facet of your new deal or you will be free to go with a new company. You are best off, however, with a contract that terminates when it terminates leaving you to negotiate freely.

Our new Taxiblog contract review service is now available. Simply send me a copy of the proposed contract (please keep it to 10 pages or less) in an editable format. I will review it and send it back with my suggestions. If I think it needs further legal review I will let you know that as well. The service is absolutely free to anyone with a vowel in their name. All others please add a vowel before you send me the file and it will be free for you as well.

So I went to sleep last night after four days of major dieting and two hours of exercise and my unconscious body struck back. I had a dream (sorry Dr. King) that I was writing a ballad about Plaxico Burress to the tune of Bohemian Rhapsody.

Mama.
Just shot my leg
Pulled a gun out of my pants
Now it hurts some when I dance.

And so on. I had to give it up when it started to morph into “Dracula the Musical” from Forgeting Sarah Marshall. “die….. die….. die….. Wasn’t going to be a hit. Anyway, at that point my piano started barking. Really loudly, which made me wake up to my dog barking. Really loudly. Not a good thing at 2am when it is below freezing outside.

Anyway, I guess this Plaxico thing has been on my mind, even though I am far more of a NY Jets fan than a
NY Giants fan. And it’s not just me. People across the country are enthralled by the man’s stupidity. Where shall we start? You are making millions upon millions of dollars a year to play football, but you CAN’T play this weekend because you have a pulled muscle. But you CAN go to a dance club. But you CAN’T go without protection (no, not that kind. It’s not a strip club). But you CAN buy security guards. But you CAN’T feel macho if someone else is doing the packing, so you fill the wasteband of your sweats with a pistol. The metal kind. Then you feel the need to show it off, and to top it all off, when you are asked to remove the bullets you blow a hole in your leg. Larry David could not have imagined a more painful brand of stupidity than this.

And I blame it all on talking in the third person. Really. I do. People who talk in the third person always seem to get in trouble or do stupid things. Think about it. The only time an intelligent person would refer to themselves in the third person is when they are talking to a small child. “Mommy has to go the store”, or “Uncle Billy needs to go to the bathroom”. But when you get famous, especially as an athlete or rap star, it becomes second nature. And by removing the “I” from the equation, as in “I am being a serious lame brain by bring this loaded gun with me” perhaps people like Plaxico Burress can remove themselves in their own eyes from the blame for the act of idiocy. And taking responsibility is the first step towards acting more rationally and more intelligently.

The same is generally true of institutional settings. It important to accurately delineate responsibilities when you are describing a job, whether it is a permanent position or a temporary assignment. In the way of description I do not mean “You will be in charge of the process to select a new training person.” I mean, “You will be heading up the search group. These three people will be assisting you and reporting directly to you. Your recommendations will be given heavy weight in our selection process, your budget for the search will be $10,000.00, and we need a recommendation in eight weeks.” Be specific, and of course be reasonable.

Once you have built specific job descriptions, you need to make sure that your company is operating within the guidelines that you have set up. Chain of command is particularly important. Everyone needs to know the ladder, and the boss needs to make sure it is climbed rung by rung. If employee A reports to supervisor B, then when employee A comes to you personally, going over the head of supervisor B, even if it is in a casual setting, you should either call B into the meeting, or better yet, refer A back to B. Failure to reinforce the chain of command leads to embarrassing moments as demonstrated by Al Haig’s famous, “I’m in charge here.” after Reagan was shot> No, Al, check the constitution, a few more people have to kick off before they get to you.

Similarly, if you are making top level decisions that will affect a project subordinates are working on, call them in and let them know. Failure to do so will result in supervisors losing ownership of their projects, and rejecting responsibility. “If he is going to do it himself, why did he give me the job?” Instead of making decisions autocratically, set up a meeting, get managers’ takes on where their projects are, and toss out your ideas as suggestions that they are free to either use or discard. After all, your appointee should be much closer to the issue than you are anyway.

For those of us who have control issues, and who need to micromanage, it is very difficult to let go and trust your subordinates. I had a boss once whose motto was “Everyone is entitled to my opinion.” The fact is, though, if you are going to do everything yourself why pay anyone else’s salary? The flip side of that is, as long as you are hiring, hire really well, and as long as you have hired well, make sure you utilize your staff to their fullest potential. And that means letting them take responsibility. You will be amazed at how much more work gets done, and how much more enhusiasm there is in the workplace, when your staff take ownership of projects.

In other words, Mikey says, “Don’t shoot yourself in the foot.” by creating confusion in the workplace. Or in the leg by creating a scene in a nightclub.

As I lay here in my bed watching the 007 marathon on sci fi channel, stuffed to the gills with food and cholesterol, I would like to make a list of some of the things I am thankful for this year

• Lipitor
• The Veronicas. Great new album. You should check it out. You and your kids will both love it.
• Hillary Clinton not getting the Democratic nomination
• Brett Favre It was getting pretty gloomy being a Jet fan
• Super premium tequilas
• knowing that when I start to panic because it’s finals time and I haven’t been to English class even once this year that it’s only a dream.
• Family, friends and staff who not are not only supportive and understanding when I get upset for sometimes no reason at all, but who get the joke.

Happy Holidays all

Let’s think about the world as we know it today. Brett Favre has led the New York Jets to the point where they are in first place at Thanksgiving. Lehman Brothers went bankrupt. We will soon have a minority President, and the World Trade Center is gone. If you were Nostradamus living in the year 1998 you couldn’t have predicted half of this. Oh, and by the way the pregnant man is having his second baby. Go figure. You go girl.

But just because you cannot predict what will happen around you does not mean that you should plan for the future. In fact, surely the opposite is true. Every company should have a 10 year plan delineating where it wants to be in the next decade. Without it every major decision made by the company’s executives is made in a vacuum, and often those decisions will be working at odds with each other. It’s like that game where you write he first line of a story and pass it on for the next person to write the next line, and so on. The story is pretty bizarre by the time you are done. The ten year plan should then be used to develop the 5 year plan, the one year plan, etc.

On a more macro scale, it is important for operators to make sure that their regulators have a ten year plan as well. What good is determining where you want your company to be if it runs completely counter to where your city wants your industry to be? Both New York and Chicago are consistently failing in this department, as, I would guess, are most jurisdictions. In large part this is due to the relatively low importance placed on taxicab regulation when it comes to budgeting. For a city to develop a ten year plan for anything requires studies, proposals, more studies and lots of committee meetings. All of this takes funding, which is generally not forthcoming in the best of economic times, never mind during the type of deficit economies we are seeing today. We need to plan for housing development, traffic and congestion, new football stadia, but taxicabs? They’ll be just fine. When Rudy Giuliani became mayor of New York City it took him almost a year to even appoint a replacement for the chairman of the Taxi and Limousine Commission who had left at the end of his predecessor’s term. Which brings up the other major deterrent to long term planning, politics. In New York, for example, every new mayor wants to have his own stamp on everything, so they replace all the department heads, which means new ideas, new directions and new priorities. So why bother with a ten year plan when your successor might just throw it out the window anyway?

The answer to that question is precisely BECAUSE new administrations will have different ideas. The existence of a long term strategy might deter each succeeding administration from trampling on the progress of predecessors. As it is we wind up playing the operational version of Marco Polo, as we blindfold ourselves, yell Marco, and wait for regulators to say “Polo” so we can head off in one vague direction or other. If nothing else, incoming regulators might make their changes to the plan rather than as immediate changes, and the industry would have time to work towards new goals rather than entering panic mode and playing catch up. To return to the Giuliani era for a moment, his administration focused on larger more comfortable cars, leading to the stretch Crown Victoria. Had there been a 10 year plan then describing a move towards more fuel efficiency, or full accessibility, we could have been testing new vehicles all along. When the Bloomberg administration first announced their initiatives they were scheduled for full implementation in 2012. Okay, so at least it was a five year plan. It was not until later that it became a 6 month plan, and an impossibility.

Officials in both New York an Chicago have expressed interest in developing long term plans for the for hire vehicle industries in those cities. If I had to guess we will have more input into plans in Chicago than in New York, but either way, it will be nice to be able to have some small glimpse into the future so that we can finally take off the blindfold.

Wall Street had another rough day today. The Dow dropped another 444 points to below 7600. My wife is watching her 401k swirl down the proverbial toilet, my kids’ college funds are down 45% on the year, and I’m thinking, “Hey. It’s a good time to buy.” As a matter of fact, I think it’s downright un-American to sit on the sidelines and watch the market go down. You should all be out there snapping up bargains and helping to right the economy. I did my part to help Citigroup today, as their shares dumped to record lows. Bought it at $5.00 a share, it ended the day at $4.71, but at the price I paid the shares produce 11% annually in dividends. Of course, unless the rest of you go out and buy some as well there may be no money in Citigroup to pay any dividends. If they cut their dividend, however, the cash position gets better and the stock price goes up. Good deal. I hope. I also bought Microsoft and Dell, both of which are trading at ridiculously low price earnings ratios. That means they are cheap to you and me.

Where am I going with all of this? I have no clue. Has nothing to do with what I really want to talk about, which is customer service. Industry legend (paid endorsement) and former Taxicab Livery and Paratransit Association President Brian Hunt dedicated much of his term in office to improving customer service. We may all think that we have incredible customer service departments at our operations, but do we really? I mean, General Custer probably thought he had plenty of men with him at Little Big Horn, but sometimes we deceive ourselves.

After taking Brian’s customer service quiz in Birmingham, Al last year, I decided that it was about time to run our staff in Chicago through a customer service class. We had a group come in and give seminars to everyone in the organization, from the President, to the driver training staff, to the dispatchers and call takers that actually deal with the public on a day in day out basis.

The results were not shocking. To a man the staff thought the seminars were interesting and helpful. Translation: I got to relax and listen to someone for three hours, I got a free lunch and I got paid for it. Also to a man the primary tenets of customer service went in one ear and out the other, often dragging little used brain cells along with them. The class and I both stressed that it is important when a customer has an issue to begin by saying, “I’m sorry.” You can say anything you want after that, but at least the customer knows you are sympathetic to his plight. Call microsoft and complain. Call AT&T. Call anyone, and the people over in India on the other end of the line will say, “I’m sorry.” You don’t have to believe them, but it’s better than saying, “Oh shit, dude, there’s no way you’re getting a refund for that.” So we pounded “I’m sorry” into everyone for 3 days, and yet when I listen to the call takers most of them still don’t get the message.

It’s not that our customer service people have no interest in improving their skills. I am sure some if not all of mine do. It is more a function of bad initial training, bad habits, and watching others continuously do things wrong all around them. When you learn to play a sport the wrong way it is very difficult to relearn it the right way. You have to first un-learn your bad habits. The same is true for behavioral patterns, including customer service. How do we un-learn something? By having it repeatedly drummed into us. Have the posters up on the walls, have the tapes reviewed daily and when they calls are not handled properly have the reps called in and point out where they could improve. If they fail to improve after 2 or 3 meetings cut them loose and get someone new who can be trained in proper procedures from the outset. This will not only improve that one position, but it will show everyone else how serious you really are about improving customer service.

Just as tape reviews can help improve customer service internally, our new “secret shopper” program has been an enormous success in improving customer service on the road. When you have 50 vehicles and you know all of your drivers it is fairly simple to keep on top of them regarding customer service. When you have 2600 cars it becomes more problematic. Our solution was to send 10 people our Yellow Cards (corporate cards) for free. These 10 people in the course of their daily business will call our dispatchers or hail our cabs in the street, and will have all of their cab rides paid for by us via the Yellow Cards. In return, after each trip, they hop onto our website, log into our customer service page, and fill out a questionaire on the ride. Maximum time on the questionaire is about 45 seconds. Most of our secret shoppers feel that it is a pretty fair trade.

The results have been incredible. We have found drivers that refuse to accept plastic, hacks who drive erratically, and dispatchers who are simply “not nice” on the phone. In every case we call in the driver or dispatcher who is shocked to find that someone actually complained, and complained accurately, about their behavior. Drivers who receive glowing recommendations receive bonus points, drivers who rack up complaints will eventually be sent packing. Eventually they will all get the message that big brother is watching.

As an added bonus, all of the secret shoppers were picked from local firms who are potential corporate clients: law firms, financial institutions, and the like. As their employees get used to using the corporate cards they spread he word to their coworkers, and as they help to improve service they begin to feel that they have a vested interest in the success of our company. We hope this proprietary interest will lead to some new Yellow Card customers in the future. We will be rotating the shoppers on a bimonthly basis to spread the wealth around.

So in the end, the $2000.00 or so per month in free taxi rides we spend to improve customer service may be the best investment I can recommend to you today. And you don’t even have to pay a broker’s fee.

Dear Mr. Mayor:

I applaud your initiatives to improve the air (or the “Ayer” if you are the Villareals) quality in New York City. After all, I breathe my share. I do have some concerns, however, regarding your current taxicab initiative. Our fleet of 300 taxicabs in New York City currently operates 17 Ford Escape Hybrids, and we have an additional 20 Escapes in our fleet of over 700 vehicles in Chicago. We are testing these vehicles to determine their utility as taxicabs, specifically as fleet taxicabs, and our experiences give us unique insight into the effects of your proposed regulations.

Available hybrid models approved by the TLC as taxicabs include the Toyota Highlander and Prius, the Chevy Malibu, and the Nissan Altima. No fleet that I know of operates a significant number of Altimas, so there is no real data as to their utility as taxicabs, yet of the 300 hybrid vehicles that will be made available monthly for sale to the industry 200 of them are Altimas. The one fleet that operates $40,000.00 Highlander Hybrids has not been able to keep them consistently on the road due to mechanical difficulties. Indeed, Toyota has said publicly that their hybrids are not built to handle the rigors of taxicab service. Furthermore, an article in the Sunday NY Times reports that actual mileage on the Highlander Hybrid runs 10% to 20% lower than EPA estimates. The Chevy Malibu Hybrid, which is rated only 2 miles per gallon higher in the city than is the non-hybrid Malibu yet costs $6,000.00 more, entered taxicab service in New York City for the first time this summer. I was told by one fleet that when the temperature rose above 90 degrees the cars averaged 11 miles per gallon.

The only widely used hybrid taxicab, the Ford Escape, has a much higher cost of operation than does the Ford Crown Victoria, the current taxicab standard. A Crown Vic purchased in New York in August came with a price tag of $24,200.00. The Ford Escape costs $29,600.00, a difference of $5400.00, or $1800.00 per year for a fleet vehicle utilizing the 3 year maximum allowable useful life. If a fleet operates their vehicles for only two years, as does our New York operation, the incremental annual expense skyrockets to $2700.00. As an interesting aside, despite the article in the New York Times regarding big incentives to spur auto sales Ford took advantage of city medallion owners’ current plight by eliminating last year’s incentives on the Escape. Mechanically, the Escape costs about $350.00 per month in parts and labor to maintain, as opposed to $275.00 per month for the Crown Vic., bringing my fleet’s additional cost per vehicle per year to $3600.00, and a 3 year operator’s costs to $2700.00. These figures do not include repairs for accidents.

Your “incentive” is a $3.00 per day increase in the amount a fleet owner is allowed to charge a driver for a shift, known as the lease cap. The additional $2000.00 per vehicle generated will not cover the average fleet owners $2700.00 in incremental costs, and it will only offset a little more than half of our fleet’s $3600.00. Owners who decline to participate in the “voluntary” incentive will be penalized $12.00 per shift or $8500.00 per medallion per year, which is in many cases more than the net income generated by operating a single medallion. If this is the your idea of an economic incentive then we are going to have a long next 4 years.

Considering nothing but the pure economics of the issue, a minimum of $4.00 would be needed for an owner with a 3 year car to break even on the Escape, and $7.00 per shift would be the smallest increase that might actually be considered an incentive. At $2.75 per gallon on a 125 mile shift a driver will save over $14.00 driving an Escape rather than a Crown Victoria. A $7.00 lease cap increase would pay for the incremental cost of the Escape, put some additional money in the pocket of the operator, and still leave the driver, who has no incremental cost, with 50% of the gas savings.

Of the 300 hybrids available monthly, 250 will be vehicles that have no real safety record as taxicabs, and the remaining 50 are Escapes. One of our Escapes recently flipped over in a relatively minor sideswipe accident in New York City landing the driver in the hospital and totaling a relatively new car. Thankfully there were no passengers. I know of 2 other Escape taxicabs that have rolled as well, but in all my years of running Crown Victorias, Chevy Caprices and many other sedans I have never had one flip. Even Ford noted that lighter SUV’s are more likely to roll than are heavier sedans, and they have issued warnings noting that modifications to the vehicle necessary to comply with TLC regulations may hinder vehicle safety devices from deploying. Since the city is now effectively forcing me to buy hybrids, and Ford is selling them as taxicabs, in any lawsuit resulting from an accident in an Escape in which an injury is due in part to the partition, in which the vehicle rolls, or where factors specific to the Escape are involved, we will be bringing both the city and Ford Motor Company in as third parties to the suit.

Finally, Mr. Mayor, you should lighten up on the rhetoric. Claiming that the taxicab industry is “trying to kill our kids” is worthy of a terrorist propagandist not a mayor of New York City. There are under 14000 taxicabs in New York City, and over 30,000 city owned vehicles. Are the city’s vehicles all hybrids? It is the Mayor’s responsibility to enforce traffic regulations, and yet vehicles are parked and double parked illegally all throughout the boroughs radically reducing traffic speed and markedly increasing air pollution. And that is before we even get into a discussion about the building department and social services, both of which fall under the auspices of the Mayor’s office. So who is killing more kids Mr. Mayor?

Our fleets will continue to test new and improved vehicles, and we would welcome any real incentives offered by the Mayor and the Taxi and Limousine Commission. The Mayor is very intelligent, and if he wanted to bring about positive change fairly and expeditiously I am sure he could manage to do so. Since he has instead opted for the stick rather than the carrot one can only call this “incentive” package by its true name: sour grapes.

The joke goes, “Aside from that Mrs. Lincoln, how was the play?” After watching president elect Barak Obama’s first press conference one has to wonder if Chicago Sun Times Washington Bureau Chief Lynn Sweet was the one asking Mary Todd the question.

To set the scene, we have just emerged from a historic election where the United States has voted to put the first African American into the highest office in the free world. The economy is in shambles, we are in the midst of two wars, and it is Ms. Sweet’s chance to ask the president elect a question in front of the entire country. Policy? History? Economy? No, doggy. What type of dog are you getting? Is she serious? Does Ms. Sweet have a column on the society page perhaps? No. The fashion section? No. SHE IS WASHINGTON BUREAU CHIEF!! And the print newspaper industry is wondering why THEY are going to the dogs. Ms Sweet told the world that she broke her arm running to hear Obama’s election-night victory speech. I think that she just strained herself trying to pat him on the back.

We can learn a lot from Lynn Sweet’s reporting style. She forgot the basic rule of public speaking: It is better to remain silent and have everyone think you a fool than to speak and prove them right. Don’t ever feel as if you have to immediately respond when asked for a comment. If you do not know all the details, or if you need more information, do not comment until you are fully informed. It may be in the media’s best interest to get your comment in time for the 6:00 news, or the morning edition deadline, but it is certainly not in yours. Tell the media that you are still gathering information, but that you will get back to them as soon as you have all the facts, hopefully in time for them to meet their deadline. This will sound much better than “No Comment”, and if you actually do get back to them with a cogent comment in time for their deadline you will have made a friend you can use to get your own stories out on other occasions.

Remember that in most markets the media will ignore the taxicab industry unless someone feeds them a story, or unless it is not good news. They will not know that your drivers just drove 15 elderly people to the voting booths for no charge, but they will know that one of your vehicles crashed into a liquor store window. They will not know that you just spent a quarter of a million dollars to upgrade your systems so that calls will be answered in 10 minutes instead of 20, but they will know that some lunatic cabbie and his 2 friends plan to strike if there is no fare increase by Thursday. The fact that they do not know your positive stories, however, does not mean that they are not interested. It is your job to make them aware of the positive issues. Similarly, just because YOU know that it none of your drivers will be on strike does not mean that they know. So pass the information on.

Have a media plan prepared in advance for emergencies and other situations. In small markets it could be as simple as making sure you have the email address and phone number of everyone in the local media that might be covering a taxi or transportation related event. In a larger market you might want to have a media firm available to help get your side of the story out. You don’t need to have them on retainer, but you should have your deal set with them in advance so that you are not either negotiating a price, or educating your media partners about industry and your company in the middle of a crisis. Make sure that everyone on your staff knows who the company’s designated media spokesperson is, and make it abundantly clear that attempting to be that spokesperson without permission will be taken as a severe breach of trust.

Finally, take note that not everyone is comfortable speaking in public. If you are not, then you should not be the one commenting even if it is your company.

Busy week. First the Jets beat Buffalo at Buffalo to tie for first place, then we find that Lincoln Towncar sales are down over 50% (sorry black car guys), and finally, we have a national election of historic importance. Elizabeth Dole had her butt voted out of office after suggesting that her opponent was godless. Not that I am looking for another Democrat in Washington, but good riddance. Oh, and by the way, Barak Obama won as well.

On to business. Taxiblog has, in the past, extolled the virtues of the companies that have provided quality equipment and service to the transportation industry. We have talked up phone companies, credit card processors, vehicles and even to some extent good regulators. In the interest of cosmic balance, I feel it is necessary to point out that there are some companies who, regardless of the actual services they provide, should be taken over the industry knee and soundly spanked. And no, I’m not talking about the motorcycle chicks at Research Underwriters.

Topping the wall of shame is the Ford Motor Company and Manhattan Ford, a Company owned dealer in New York City. Ford’s behavior leading up to and during Mayor Michael Bloomberg’s (I believe the new law is that you hve to say “praised be he” when you use his name) 2012 hybrid initiative was stupefying, and the pricing policy of Manhattan Ford immediately following the Mayor’s defeat was simply Ford taking advantage of a vehicle shortage largely of their own making.

The little angel person on my left shoulder compels me to remind everyone that Ford has, for a while now, been a strong supporter of the taxicab and livery industry. The Crown Vic is our money vehicle. The workhorse of the industry. It represents the majority of new taxicabs purchased in the United States.

Now the little devil Mike on the right shoulder. When the hybrid initiatives went into effect in New York, Ford was, at best, less than helpful to the industry. They touted the Escape Hybrid as a solid fleet vehicle which could withstand the rigors of taxicab service in New York City, and Ford promised to make available for sale as New York City taxicabs 50 vehicles per month. Some time later, after the initiatives were already announced, they noted that adaptations made to the vehicle to meet Taxi and Limousine Commission standards, specifically vinyl seats and partitions, could prevent airbags and safety devices from properly deploying in accidents. Didn’t their engineers read the regulations before they asserted that the Escape would make a great taxicab? Have they never ridden in a taxicab in New York City and seen a partition? Were they not involved when the partitions were designed specifically for the Escape in NYC and were then brought to the city for approval? Furthermore, after 3 Escape taxicabs rolled over during operation, at least one that I know of personally in a very minor accident, Ford maintained that the Escape was viable and safe as a taxicab, but did add that lighter SUVs are inherently less stable than heavy sedans. Way to go out on a limb.

At the onset of the lawsuit in New York City, operating under the assumption that no one would be ordering them, Ford stopped making the stretch Crown Victorias. Unfortunately, at the same time they ran out of 2008 Escape Hybrids. There were, for all intents and purposes, no cars at all available to buy as taxicabs. If a car died or got totalled you sat with an empty medallion.

After Judge Crotty’s decision to grant an injunction preventing the city from implementing the mpg initiative, Ford agreed to begin prodicing the stretch Crown Victoria again. The only catch was that it was going to take 6 weeks miminum to get them ready. But wait!! The 2009 Ford Escapes are in stock!! The 2008 Escape cost approximately $25,000.00. Not much more than a Crown Vic, so since I was desparate for cars I figured I would put a couple of 2009’s on. I mean, really, how much could the price have gone up? I’ll tell you how much. The 2009 Escape Hybrid taxicab package was quoted to me by Manhattan Ford, which is wholly owned by Ford Motor Company, at just under $30,000.00. An increase of $5,000.00, or 20%. Basically, they eliminated the fleet discount, since there are no other cars to buy and we are forced to buy the expensive Escapes. Why are there no other cars to buy? BECAUSE THEY STOPPED MAKING THE CROWN VICTORIA!!

You would think that, at least until they got the Crown Victorias to market again, they would maintain the fleet discount and not gouge their customers. You would think that they would want fleets to buy their Escape taxicab. After all, they did maintain that it was a viable taxicab vehicle, and they do get more parts and service work with the Escape than they do with the Crown Vic. APparently none of that matters, and as long as they have us over a barrel they will make whatever they can.

Here’s to you Ford Motor Company. Winner of the first (but I’m sure not the last) spot in the Taxiblog Hall of Shame.