Tuesday, February 25, 2014


Consolidation in the local taxi business is drawing increased outcry from critics of Kansas City taxi juggernaut Yellow Cab.

To wit . . .


The deets are complicated but we'll try to get down to the basic facts:

- Behind the scenes Yellow Cab has secured a private and exclusive deal with the Downtown Marriott to handle their cab biz.

- Right now, Downtown Marriott is the 2nd biggest taxi stand in Kansas City proper (airport is 1st) and this deal is bigger than it might seem.

- Yellow Cab is winning cab exclusive deals at hotels throughout Downtown and Midtown and this has competition crying foul.

This has citywide impact . . . Remember that KCMO has been sued for enforcing a monopolistic system and cab rules and regs have been a constant source of debate among politicos as of late.

Taxi Industry expert Craig Bates goes on the record to explain the sitch: "This deal is the tipping point to a taxi monopoly in Kansas City and it's really a preview to Yellow Cab getting an exclusive deal with the airport as well. THAT will drive all the other taxi cab companies in this town out of business."

Mr. Bates is formerly of Checker Cab and recently had a somewhat less than amicable split with the company.

On the topic of how this impacts City Hall . . .

Craig Bates seyz: "The result of this deal will be that Yellow Cab will start to earn a market share of over 60% in Kansas City. It's written into the municipal code that no cab company can exceed that number but right now we're getting really close."

A note about local government control . . .

Craig Bates: "In a city that claims to foster industry and competition, what we have is a local government that has allowed and even encouraged a situation that's getting close to monopoly."

We talked to Yellow Cab honcho Bill George on this one, here's how he explains the deal: "Private business can choose companies they do business with. Just like a hotel selects a produce vendor, linen company, etc."

So, the argument here is that Yellow Cab is coming close to monopoly status and despite so much talk of encouraging Kansas City Biz, City Hall is either behind the curve in fostering a competitive atmosphere when it comes to transit in this town OR Yellow Cab and Bill George have simply navigated the local biz and political minefield more successfully than anybody else. You decide.

Developing . . .


Anonymous said...

TKC, don't forget transit apps. That's the real future of cabs in KC. developing applications to fight a monopoly with lower prices.

Anonymous said...

So a gentle review:

Hotels can make deals with whomever they like and they do.

If the other taxi companies don't like it, they can provide better service. "Crying foul" is shorthand for "we're not as good as Yellow and the Marriott doesn't want our broken down Crown Vics within ten blocks of their hotel."

If Yellow goes over 60% fine. They haven't.

I decided you're an uninformed idiot Tony who will suck up anything spoonfed to him and vomit it back up as EXCLUSIVE AND BREAKING NEWS!!!

And I'm pretty sure I'm dead on.

Anonymous said...

Well considering yesterday we learned that a cabbie got beat in the murder/pillage/pd vs.fd battle of the town down nasty wife...it's a tough town for cabbies in these parts.

Sounds fishy. I am glad someone is looking into this kind of monopoly of business.

Anonymous said...

I'm a simple economist with no dog in this fight but I can tell you the realities of taxi services here and throughout the United States. Our situation here is no different than any other metropolitan area that has a central business district and has a need for periodic personal transportation for a variety of needs and consumers.

First, there isn't a city in the entire country wherein the established cab services do not believe that there are too many such services already and, therefore, offer pushback every time an expansion of taxi service is proposed. However, when one looks at the going price for the privilege of offering taxi service around the country, the numbers tell a different story.

What makes this interesting to an economist is the concept of critical mass in a given service. Take, for example, a downtown where cab service should thrive amongst business people shuttling from meeting to meeting. If such a downtown lacks an adequate number of roving cabs, the consumer generally neglects to use the service. This is due to a perception that such service cannot be relied upon in times of need.

Consider now a substantially larger downtown with several roving cabs. In such a city, cabs are busy to the point of being overworked. This occurs because the consumer perceives taxi service to be reliable and plentiful (even though it likely isn't plentiful enough!).

In the case of Kansas City, the overall number of cabs is small enough that most consumers will unconsciously choose to not utilize the service as the perception of being "left out in the cold" is realistic.

The truly sad part of this is that increased competition by way of an increase in the overall number of cabs would bring about a perception of reliability that would increase overall usage and, therefore, profits in aggregate.

This action on the part of the Yellow Cab Company will do nothing to change the overall perception of cab service in Kansas City so it really should be seen for what it is: big players attempting to gain at the expense of smaller competitors in a regulatory environment that encourages such actions. In the short run, the consumer loses. In the long run, the industry loses.

Anonymous said...

Cabs are hard to find in downtown KCMO, because there's not a whole lot going on or much business for them. Besides, now that downtown is becoming a residential community for millenials who would rather ride bikes or walk, the need for cabs will become that much less.
Not exactly a "bustling" urban environment!

Anonymous said...

It is also not mentioned that the Marriot has been heavily subsidized by the city at various times. Not surprising that they love the free market except when it comes to paying for their hotel.

Anonymous said...

Marriott gets a TIF just like everybody else. Hard to find anybody in KCMO who doesn't.

Anonymous said...

was that a Yellow Cabbie that called the firefighter wife a cunt ? If so, maybe they could sue both PD and Yellow Cab. Both provide shitty service to the public.

Anonymous said...

3:44 got it spot on

Greedo said...

Yeah, your comment was great and everybody loves you. No go back and crawl under your rock.

Where's my check? said...

KC Loves Bill!

Anonymous said...

In 12 months Yellow will have 90% of the taxis in town and then will have to surrender 30% of there permits to comply with the city ordinance. Let's see if the $100,000 Bill George puts into the next election buys him a monopoly(by influencing the ordinance being changed).

Anonymous said...

By the time this gets worked out, lots of local lawyers are gonna be buying new Benzes. Class actions, antitrust, unfair restraint of trade, all kinds of crazy-ass lawyer shit gonna come down. We be talkin' beaucoup billable hours.