Green Cab, the city's carbon-neutral, worker-owned taxi cooperative, shut its doors Thursday at midnight, the moment its insurance policy runs out. With accidents on the books and ever-diminishing financial reserves, the company has struggled to find a new insurer that SFMTA approves.
“As a small company, we're not attractive to insurers,” Green Cab co-founder Mark Gruber says, explaining that larger entities can absorb the cost of accidents, and allow insurance writers to make up the money in premiums. Green only has 16 cars in its fleet , making it modest, by San Francisco standards.
[jump] Green was heretofore insured by a risk-retention group called Onyx, which represents a partnership of cab companies throughout the city. When Onyx decided not to renew, Gruberg struggled to find another backer, and even toyed with the possibility of going with a much more expensive assigned risk policy.
He says he's been hamstrung by an SFMTA rule that restricts which insurers can underwrite taxi businesses in San Francisco: To get approved, an insurer has to garner a rating of A-7 or better by the insurance ratings center A.M. Best, which can only happen if the insurer has been around long enough to get rated in the first place. (Since Onyx is a newcomer, it hasn't yet been approved, Gruberg says.)
That rule has been on the books for a long time, Gruberg says, but only recently did the agency begin enforcing it. “It's actually kind of puzzling that they're digging their heels in at this point, with all the pressure that the industry is facing,” he adds.
Gruberg believes that Green Cab might be the first domino to fall in what could be a mass cab company collapse. A much larger taxi dispatch called City Wide comes up for renewal this week, he cautions. “The consequences of them going down would be much more serious for the industry, and for the public.”
At present, City Wide and other companies are trying to work with SFMTA to loosen up the rule, and Gruberg says that just the week the agency decided to extend its approval benchmark to a “B +” in order to ease the transition. We're still waiting for SFMTA spokespeople to comment.
The slightly looser law hasn't helped Green Cab, though. It has about two weeks to find a willing insurance writer, or take its cars off the street for good.