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California taxi company files for bankruptcy; start of a trend?

Escondido readers may be familiar with the quasi-taxi cab style companies Uber and Lyft. These services, fast on the rise in California and throughout the country, are especially popular with people who live in urban locations, as well as those who know how to quickly and easily use technology. But, as many business people in California know, the rise of a new type of service can quickly lead to the end of another.

According to a recent report, one California taxi cab company -- Yellow Cab, located in San Francisco -- recently filed for Chapter 11 bankruptcy. The reports indicate that the rise of Uber and Lyft played a role in the bankruptcy filing, but there was another large reason as well: a judgment of $8 million that the company owed as a result of a car accident that involved a Yellow Cab car last year.

Unexpected debt combined with rising competition has spelled the end for many companies in America over the decades, but Yellow Cab apparently is not throwing in the towel in this business bankruptcy. The reports indicate that the company will stay open for operations, and that the company still receives nearly 15,000 calls for cabs every day. In filing for Chapter 11 bankruptcy, it appears that the company will focus on debt relief.

If this bankruptcy filing of a taxi cab company in one major U.S. city is any indication, there may be other taxi cab companies in other cities that may also be feeling the heat of increased competition. Only time will tell whether or not the traditional business model that taxi cab companies have been using will remain sustainable.

Source:, "San Francisco's Yellow Cab files for bankruptcy," Heather Kelly, Jan. 25, 2016

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