Power Struggle Splits Taxi Firm

The solution seemed simple enough:

To address the problem of illegal “bandit” taxis, Los Angeles transportation officials decided in 1994 to allow Bell Cab Co. to absorb and legalize 250 of those cabs.

It now looks like that was a wrong turn.

Today, Bell Cab, the largest taxi firm in the city, is in bankruptcy proceedings and is racked by a nasty internal power struggle that has pitted the former bandit cabbies against a management firm supported by most of the company’s original drivers.

The dispute centers on who is in charge--and that is far from clear. The cabbies have elected two boards of directors and set up two competing dispatching centers, one near downtown Los Angeles and the other in Westwood.

The two factions have exchanged lawsuits and allegations like cannon fire. Even court-ordered mediation has yet to resolve the feud.

And this would not be a true L.A. story without a racial or ethnic element: Most of the former bandit cabbies are Latino. The original drivers are mostly Russian immigrants who support a Romanian manager.

“What you have is a classic power struggle,” said Alan Willis, who managed the city’s taxi permit operation until recently.

What is at stake is the future of a company that represents nearly 15% of the 1,800 licensed cabs in the city.

Los Angeles is served by 10 franchised taxi firms, which are licensed and regulated by the city’s Transportation Commission. Most of the firms are operated as cooperatives or in similar arrangements that give the drivers ownership of their cabs and a controlling interest in the company.

Because of that structure, taxis are not just a convenient mode of transportation for tourists and residents. They also provide the city’s growing immigrant population a venue to start what is essentially a self-owned business.

Meanwhile, cabbies are caught in the middle.

Fernando Iglesias, a driver for Bell Cab, said he hopes the two sides can resolve the differences for the sake of the drivers. “There is a lot riding on this for us drivers who have been paying our fees,” he said.

The feud over how that identity crisis will be resolved has become so contentious that the City Council agreed last week to intervene, although both sides say that the involvement of politicians may make matters even worse.

The city’s Transportation Commission has ordered the former bandit drivers to close the downtown dispatch center and consolidate the operation at the Westwood facility, under the management of Michael Calin, the professional manager hired by Bell Cabs two years ago.

Calin has taken his own actions to punish the dissident faction: He has barred cabbies who refuse to pay his management fees from picking up lucrative fares at Los Angeles International Airport.

Both sides agree that the feud has gotten out of hand.

“People have to realize that this infighting is not going to solve anything,” said Calin. “There will be no winners in this.”

Lincoln Castro, who heads the mostly Latino faction of former bandit cabbies, agrees that a quick resolution is needed. “The more I talk about it the angrier I get.”

Bell Cab has had a controversial history in Los Angeles. In 1994, the firm agreed to pay $45,000 in penalties for repeatedly making illegal contributions to City Hall politicians.

In 1994, Bell Cab had 80 or 90 cabs and appeared to be struggling financially. Then, in December of that year, the firm and its lobbyist, former City Councilman Art Snyder, convinced the Transportation Commission to let Bell Cab absorb 250 illegal “bandit” cabs.

The illegal cabbies were already organized by the Union de Taxistas Independientes.

The commission believed that the move to legalize the unlicensed cabbies would reduce the number of cabs operating without insurance and in violation of safety standards.

Nearly four months after the expansion, Bell Cab hired Calin. But within a short time, the former bandit cabbies began to butt heads with Calin, who they said was not forthcoming with financial information about the company.

Castro said the former bandit drivers also had a dispute with Calin over several cabs that were sold to drivers who needed new taxis that were able to pass city safety regulations.

Castro claims that many of the cars had serious mechanical problems and he blames Calin, who helped the drivers get the cars.

“All of these cars were on the streets and were breaking down and the engines were burning oil,” he said.

Calin rejects those accusations, saying he has provided all the financial documents asked of him.

As for the cars, he said his job was to collect the fees for other firms that sold and provided financing for the vehicles. He said he was only the middleman in the deal.

Calin attributes the dispute to the former bandit drivers, who he says don’t like working under the rules of a legitimate cab company.

At one point, Calin said, some of the former bandit drivers stopped paying the $250-a-week management fee that pays for his services and the insurance for the cabs. So, Calin said he canceled their insurance.

Without insurance, Calin said he could not allow the cabs to serve LAX. The managers of each franchised taxi firm in the city are members of a little-known panel called the Automated Taxi Services, which oversees taxi operations at the airport. As a member, Calin persuaded the panel to bar the uninsured taxis from the terminals’ pickup zones.

Bell Cab’s bylaws also helped to create gridlock because they call for a 10-member board of directors. In August of last year, the board was made up of five members representing the former bandit cabbies and five representing the original drivers.

At that time, the board of directors voted for a new set of officers. But what happened at the meeting is still in dispute. City officials who have tried to resolve the feud say they found two sets of minutes from the meeting: One says Castro was elected president, but the other says the group did not have enough members present for a quorum.

By May, the company splintered for good. Castro said the board of directors of Bell Cab fired Calin and put the company into bankruptcy to get out from under a growing debt problem. Calin sued, questioning Castro’s role as president of the firm. Castro and his group filed a countersuit, alleging a breach of contract.

In the same month, Castro and his supporters--mostly the former bandit cabbies--moved their operations to a downtown location in the same building occupied by the Union de Taxistas Independientes.

Most of the original drivers stuck with Calin at the Westwood operation, where they elected their own board of directors and officers.

The city’s Transportation Commission has ruled that the downtown dispatch center operated by Castro and his supporters is an illegal operation, using an illegal radio frequency. It has ordered the operation closed.

The City Council is expected to consider the matter Aug. 26.

Meanwhile, Barry Glaser, an attorney representing the drivers at the Westwood operation, said most of the original drivers hold no ill will toward the former bandit cabbies. But he said the original drivers have stuck with Calin because they believe he is the lawful manager.

“We don’t think that this split-off is the appropriate way to handle this,” he said. “The appropriate way is to mediate and talk this out.”