UTW
needs
Your
Donation

Commission Considers Settlement
Over Veterans’ Corporate Permits

The Taxi Commission is considering a legal settlement with Veterans Cab Co. that would allow the company to retain most of its corporate permits for years and some for decades to come.
Seven years ago, the Police Commission turned down Veterans’ application for approval of company redemption (repurchase) of shares of deceased stockholders. The application was made pursuant to Proposition K of 1978, which provides that a transfer of 10 percent or more of corporate shares without commission approval renders the permits “null and void.” Seven other companies made applications which were also disapproved.
A year later, the Board of Appeals upheld the commission’s decision on the Veterans application and those of the other companies. Since then, two companies — Yellow and Luxor — have settled with the city and returned their corporate permits. But Veterans continues to operate all 25 of its corporate permits despite the commissions’ decisions.
(The company holding the Veterans permits is not the same company that runs the Veterans color scheme. The permit-holding company has leased the medallions and rights to the Veterans name to Speck Cab Company, which also runs Arrow Cab.)
Veterans claims that company redemptions do not constitute transfers. It also says that after its application for redemption of shares was denied, it changed its corporate by-laws to allow for “cancellation” of the shares of deceased stockholders, and subsequently cancelled the shares in question. It claims that such cancellations are not transfers.
United Taxicab Workers believes the claim that share redemptions are not transfers is baseless, and the resort to “cancellation” is no more than a belated and ineffectual attempt to circumvent the commissions’ decisions and the law.
For reasons unknown — and despite urgings by United Taxicab Workers and others — the matter was left in limbo for six years. The proposed settlement came to the Taxi Commission in August, and was considered in closed session on Sept. 14.
The proposal would require the company to surrender four of its 25 corporate permits on Jan. 1. The remaining permits would be returned three at a time, upon the death of each of its seven remaining shareholders. As several shareholders are in their 40’s and 50’s, it would likely be decades before all permits are returned.
The settlement embraces a “pro rata” approach to the return of corporate permits that was explicitly rejected by the Board of Appeals in 1998. Moreover, even under a pro rata formula, the number of permits slated for immediate return is far too few. While 43 percent of Veterans’ shares have been returned to the company as shareholders have died, the settlement would only require the immediate return of 16 percent of the permits. A genuine pro rata settlement would require the return of 11 permits rather than four.
UTW urged the Taxi Commission to reject the settlement. The commission reached no decision in its closed session. If the commission approves the settlement, it would go to the Board of Supervisors for its approval.
Drivers who wish to support UTW’s efforts to obtain the return of all Veterans’ corporate permits and other permits being operated in violation of Proposition K should call our office at 864-8294.