Things are looking up for SF Green Cab, the worker-owned taxi cooperative that went dark last week after it couldn't find an affordable insurance carrier. Despite being recognized — and beloved — as the Rainbow Grocery of cabs, Green is a modest fleet with a couple of major accidents on its record. That makes it a doubly unattractive prospect for insurers (small outfits can't absorb the cost of wrecks the way their larger peers can). Days after the company temporarily shut its doors, local news outlets rushed to predict its death.
As of Friday, though, Green inked a deal to renew its policy with San Francisco-based risk retention group Onyx, which puts it back in business, for now. The question now is whether Onyx, which covers a slew of other cab companies in San Francisco, will itself survive.
In October, SFMTA sent a letter to all local taxi companies, reminding them of a 12-year-old unenforced policy imposed by the city's Paratransit program. It requires that all taxi insurance providers have a rating of "A-VII" from a ratings provider called A.M. Best Company. ("A" represents the financial stability of the insurer, "-VII" the company's surplus).That severely limits the pool, Green Cab founder Mark Gruberg says, since A.M. Best only rates companies that have been operating for four years. As a 15-month-old newcomer, Onyx didn't make the cut.
Cab company owners were perplexed. "It's actually kind of puzzling that they're digging their heels in at this point," Gruberg says, "with all the pressures that the industry is facing."
De Soto owner Hansu Kim agrees. He helped found Onyx in 2013 as an affordable counterpart to the other carriers on the market. It's run like a credit union, he says. Every company that participates is a shareholder; because Onyx worked out a deal to share risk with other insurers, the premium cost falls between $8,500 and $9,500 per cab, per year — far less than the $11,000-per-cab average of older competitors.
If Onyx doesn't get MTA approval, then Metro, De Soto, Veterans, National, and Green Cab companies might all get yanked off the streets, Gruberg says. And since most of them are larger than Green, the consequences of them going down would be far greater. Kim foresees a future in which the taxi industry's traditional bread-and-butter customers — the elderly women lugging grocery bags, for example — will be relegated to Muni or Uber.
Kim says the founders of Onyx knew about the rating standard going in, but thought themselves exempt. Yellow Cab is self-insured, he says, and it hasn't run afoul of the agency. Moreover, former MTA taxi boss Christiane Hayashi championed the taxi companies' self-preservation effort, and never brought up the rating system.
But Hayashi's successor Kate Toran is taking a harder line. That aggravates Gruberg, who doesn't want to be regulated out of business again.
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