Cabbies Say There's a Taxi Monopoly in Dallas, and They're Fighting to Break it Up
Jack Bewley and Jeff Finkel have spent the last several years methodically strengthening their position in the Dallas taxi market. Their company, Irving Holdings, was established with the merger of five local cab companies. In 2007, they brought Freedom, Eagle and Jet taxi companies. Earlier this year, they brought State, U.S. Cab and Diamond into the fold.
Patrick Michels Cab drivers protest the city's decision to give preference to natural gas-fueled vehicles in 2010.
All told, they control 75 percent of the taxi market in Dallas, Tarrant and Collin counties, which presents a problem for smaller operators. Several of them -- Star, Alamo, United and Ambassador, as well as the Association of Taxicab Operators, a local trade group -- filed a lawsuit yesterday alleging that Bewley and Finkel are elbowing would-be competitors out of the market through price fixing and other measures that violate federal antitrust law.
To understand the nature of their claims, you have to understand how the taxi business works in Dallas. Pretty much each major city in the region has its own system for permitting cab companies, the most important of which are those for Dallas (which includes access to Love Field) and DFW Airport. Without access to air passengers in those markets, a cab company is hard-pressed to make a profit. (The North Central Texas Council of Governments is mulling a universal, region-wide permit, but those discussions are still in the early phase.) The drivers themselves are independent contractors who pay licensed companies so-called stand fees for the right to drive their cabs.
Those drivers have increasingly fewer options. Both the city of Dallas and DFW Airport have instituted moratoriums on new permits for cab companies, and Bewley and Finkel's companies control most of those that have already been issued. The result, according to the lawsuit, is that the men have a monopoly on the market that they've used to undercut smaller companies and make it impossible for them to recruit drivers. Since the cab companies engage in interstate commerce, by ferrying airport passengers from other states and taking gamblers to casinos in Oklahoma and Shreveport, this represents a violation of federal antitrust legislation.
This isn't the first time Alamo et al have sued Irving Holdings. They filed an almost identical suit in 2010, which was stayed by a judge last night. The only thing that's changed since then is that Bewley and Finkel have gained control over an even larger slice of the market. Neither side's attorney has responded to a request for comment.