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Taxi tangle: A look at the past, present and future of Iowa City’s cab industry


On a typical weekend in downtown Iowa City, the streets are lined with taxi cabs of various color, make and model. A mosaic of logos and light-up displays stands idle in the center turning lanes, loading zones and alleyways—and they’re all waiting for you.

The Uber Truth

The Perception

Uber, posterboy for the “sharing economy,” offers great part-time work for flexible individuals who can make money when they can, fitting in jobs like driving cars or delivering groceries into their busy, fulfilling lives.

The Reality

  • Uber is not a side gig for many drivers, but a full-time job they rely on to get by in a tough economy.
  • Since launching, Uber has drastically cut its fares, so drivers across the country are reportedly working 12-hour days, some only making minimum wage.
  • Uber takes at least 25 percent of all fares drivers collect.
  • Uber doesn’t pay for things like car maintenance and insurance.
  • Uber drivers can be “de-activated” (read: fired) any time.
  • Because Uber drivers are contract workers, they have few ways to have their grievances addressed.

Occupy Uber

  • This summer, drivers in California launched the California App-based Drivers Association, or CADA, with the support of the Teamsters union to promote justice for Uber driver.
  • Recently, Uber drivers in Santa Monica, San Francisco, Chicago, New York and London turned off their phones for three hours to protest their working conditions.

—Mara Kardas-Nelson

But how does a relatively small town of about 70,000 residents come to support such an extensive network of car service companies? Does Iowa City have room for potential newcomers like Uber and Lyft, and will such companies disrupt the existing market for better or worse?

To better understand how car services in Iowa City got to its current state, and where they’re heading in the future, we should consider the history of car services already available in the area.

A History of the IC Taxi Industry

For two decades there were only two major cab companies in town: Old Capitol Cab (OCC), opened in 1985 by Norb Schulte, and the outfit that became Yellow Cab of Iowa City. 

Initially, growth was slow for both companies and their fleets were filled with raggedy cars. They didn’t face much competition until late 2003 when Chris Griffin came to the helm of Black & Gold Cab Company.

Griffin’s cabs stood out at once. They were town cars and a big van, not used cop cars or grocery getters. They were always clean, non-smoking and never banged up.

“That was one thing he was real proud of,” said James Parsons, who began driving for Black & Gold in 2004. “He brought a sense of class and legitimacy to the job.”

Black & Gold also accepted credit cards for payment, used digital walkies for communications and installed taximeters to clock fares. Griffin picked up lucrative local contracts that the other companies had fumbled.

In September 2005, higher demand had brought more cabs to the road than ever. Marco’s Taxi opened on the first football weekend, joining upstarts Redline and Five Stars. Yellow Cab, meanwhile, began hiring drivers as independent contractors to offset rising costs; drivers began fleeing to the new companies.

Taxi Tangle
With taxis in Iowa City already highly unregulated, and impending newcomers like Uber, what does the future have in storefor the local car service industry? — illustration by Lev Cantoral

“What really opened the floodgates was OCC shutting down,” said Parsons.

In late summer, Old Capitol Cab succumbed to insolvency. Veteran drivers fled to Marco’s for work. Other outfits rushed to fill the vacuum with their own cabs.

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By 2007, 15 taxi companies were operating 77 cabs in Iowa City, up from 2003’s rough count of three competitors and 40 vehicles. Local demand for car services remains high today with nine companies representing 133 cars driven by 270 registered drivers.

While demand has steadily risen, Parsons says business has ever-dwindled as vehicles flooded the market over the last decade. He adds that the general morale of service-based professionalism has plummeted with the sense of decorum.

“Nothing says ‘commitment’ like ransom lettering in the windows,” said Parsons, referring to companies that run unpainted cabs. “The difference is we want people to keep calling us. We don’t expect people to take us once and never call again. Better business is built by providing proper service.”

Parsons describes much competition as outsiders leeching off business at peak times. “Most don’t know the town, and some don’t even live here. And I mean in the state of Iowa. They just show up when it’s busy.”

He further estimates half the available cabs don’t emerge until midnight.

“I’ll see [competition] sit for three hours without moving,” he said. “Their business comes at bar close. People wander out to find cabs that’ve been sitting for hours. And then they get ripped for a $60 ride home to North Liberty.”

Geoff Kacer, another industry veteran, contends the throng of cabs are unnecessary and don’t accurately reflect demand. 

“We handled the same business more efficiently with fewer cabs and fewer companies,” which he equates with less confusion and less trouble. 

Driving bar rush among only 40 cabs used to be an exhilarating, and outrageous, multi-hour experience for Iowa City cab drivers. But those are wild old times. Today, divided between 133 cabs, the curbs are clear in 20 minutes. 

The Accountability Problem 

Iowa City taxi regulations didn’t change much during the 20 years of static competition between Yellow Cab and Old Capitol. But in 2004, Griffin began pushing the Iowa City City Council to strengthen regulations, notably in that all taxis should be equipped with working taximeters and non-smoking.

Major provisions since have been a mixed bag for both companies and drivers. A complete 2006 overhaul required the use of taximeters and a minimum number of drivers. Yet the single color scheme requirement was dropped.

Amendments in 2012 required a company to operate an office with 24-hour dispatch, yet shifted the issuing of driver identification badges from the city onto the hiring company.

A push to deregulate the minimum driver and 24/7 dispatch office requirements also emerged. Proponents argue such requirements prevent small, would-be innovators from entering the market.

Incremental deregulation has already led to bad business in Iowa City. Since the color scheme has been dropped, for example, American Taxi has in its fleet a yellow van in the exact shade of Yellow Cab.

Sheer taxi volume also no longer indicates the most dependable or important car services. And with so many options, riders don’t always know with which company they’re riding.

What cabdrivers want to see in Iowa City leadership falls directly in line with the changes that  Iowa Police City Chief Samuel Hargadine recommended to the city council in August.

“The City needs to go back to issuing badges,” says Norb Schulte.

As a fare, you’ll notice this badge could well be a half-sheet of copy paper showing the driver’s name and in-house driver number, as opposed to the number assigned by the city.

“There needs to be 24/7 dispatch in an office,” says Parsons.

A lack of dispatch office indicates a taxi company hasn’t much business to manage except for flags and “specials” calling on drivers’ cell phones. Owners are taking short cuts when requiring drivers to dispatch from the taxi, creating an unnecessary and wholly avoidable danger.

Earlier this year, Chief Hargadine underlined the problem of not having regulated cab company infrastructure when he told The Gazette that officers, due to cab company disorganization, had to spend more than 200 hours tracking down drivers and collecting information during a police investigation. At the time, Iowa City police were in pursuit of a cab driver facing allegations of sexual assault.

Manifest logs, which contain these details, could enter the chain of evidence in criminal investigations and should be at companies’ fingertips. Further deregulations will lead to continued unaccountability.

But never mind what the law books say. The greatest problem with the local regulations has been the lack of enforcement of the existing rules.

As a dispatcher, I twice met with an officer making rounds to ensure the 2012 ruling that companies maintain a 24/7 dispatch office. To date, only Yellow Cab and Marco’s Taxi abide that ruling.

“If [police] called Yellow Cab, they’d get an answer,” says Schulte. “Most nights there is a manager on duty.”

Communication Breakdown

Relationships between local police and cab companies have suffered in ways that extend beyond mere disorganization, however.

“With fewer cabs and fewer companies, the rapport between cabbies and city police was stronger,” said Schulte, owing to the fact that the industry was a much smaller community not so long ago.

Cops and cabbies see the same folks in their backseats, and once knew each other enough to chitchat and share war stories. Few crimes may have been prevented or solved, but it did lubricate the system of serving and protecting the community.

“This changed,” adds Schulte. “We had a rapport that’s not there anymore.”

Would it be any better if cabbies had a stronger rapport with the cops?

The old man shrugs.

“There’d be better understanding. But there’s too many knuckleheads.”

The Woes of Overhead

Running a car service is expensive. First year estimates for a four car operation are pegged at $91,000, which does not cover an in-house mechanic or farming repairs at market rate. This also doesn’t include the unseen and constant fees for fuel, fluids, mechanical parts and pleasurable configurations. The heavy cost is a central point for those calling for deregulation.

And at 200 miles per 12 hour shift, vehicles in public service start to fall apart within two years of regular use.

“Tires and alternators can kill a company,” says Geoff Kacer.

The cost of doing business has been a major force on the local market. Consider cabs left to bad repair; Old Capitol’s dissolution and Yellow Cab hiring drivers as independent contractors while the numbers of competition exploded. And consider too that in 2012 Marco’s Taxi was forced by the IRS to reclassify its drivers as employees, a move that coincided with a cut in driver’s wages.

Black & Gold petered out within a year of Old Capitol going under. Though Griffin got his wish that taximeters should be installed in all Iowa City taxis, he got squeezed out of business by lesser forces. His company’s presence was replaced by a dozen fledglings, each driving like a maniac to snatch up an increasingly narrow slice of pie.

The Future of IC Car Services?

While conversations between cab companies and local authorities should offer some hope to solving some of the Iowa City taxi industry woes, there are rumors that—between the classified ads and emails targeting drivers in our area—Uber ride-share service is coming to town.

Uber markets itself as an efficient way to get around for the tech-savvy consumer (all business is conducted through a smart-phone app, from the hailing, to the payment), and an easy part-time gig where drivers abracadabra the family Prius into a part-time workhorse.

Should such a service come to Iowa City, there’s little doubt as to whether or not it would have a disruptive effect on the local cab industry. Whether or not this will be a net-win for consumers is still unclear, however, and local cabbies have been understandably cool on the issue.

Perry Rasmussen, an 18-year veteran of taxi driving who resides in Iowa City, has a dark outlook on this business model.

“Uber is a corporation designed to funnel money upwards to owners and investors on the backs of workers who are asked to do more with less in an increasingly unregulated and under-insured system,” he said. “They cut out all the overhead by forcing their drivers to shoulder it all.”

He predicts that if Uber comes to Iowa City, two things will happen: “Uber will get worse,” said Rasmussen, “and existing taxi companies will get worse.”

The factors that favor the San Francisco-based ride-sharing service, such as widespread deregulation and limited legal liability, are exactly the issues that are trying to be solved within the Iowa City taxi industry. On its recruitment page, Uber highlights in all caps “NO OFFICE, NO BOSS” emphasizing the lack of oversight or dispatcher as a positive.

Questions also remain regarding the lasting appeal of Uber’s pitch to drivers. Some have argued that Uber will be hard-pressed to keep workers once drivers realize how quickly vehicles begin to fall apart under the strain of running fares. Uber’s answer to overhead is to displace all expenses squarely on its driver operating a personal vehicle. And considering the company’s rigorous vehicle standards, not to mention the impending toils of car maintenance already observed by the cab industry, Uber’s sales pitch starts to lose a bit of its luster.

Despite these concerns, there are no doubt those in Iowa City who look forward to Uber’s arrival. For some riders, the taxi they’ve called will never arrive quickly enough, and the next Uber will always be the best option.

For some, however—especially those with a certain amount of nostalgia for our city’s taxi industry—there will be time enough waiting for a preferred cab to yearn for those wild old times.

Sean Preciado Genell was 12 years a driver and dispatcher for two cab companies. He’s spun those experiences into the adventures of Vic Pasternak in the fictional series Haulin’ Ass and Business as Usual for Little Village. However, he no longer works in the industry and doesn’t stand to profit from anything written here.


Thoughts? Tips? A cute picture of a dog? Share them with LV » editor@littlevillagemag.com

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