The First Twenty Years
by Richard Chamberlin
Before 1969, City Car, White Top, Checker, Yellow and Badger were the major cab companies in Madison. Small family owned enterprises, several had been operating since the 1920's. After 1969, there was a series of sales, splits and name changes. In 1972, City Car went out of business. Several individuals obtained single permits for one driver operations.
During the summer of 1973, a union organizing drive began at Yellow Cab, Madison's largest permit holder. By November, Yellow employees had voted to be represented by Teamsters Local 695. For five months they bargained for a contract. They were finally successful after a three and a half hour strike in April, 1974.
In February, 1975, the Union began negotiations for the second contract. It was soon apparent to the negotiators that management wanted to break the Union. The employees went on strike in April, 1975. On July 1, Yellow went out of business. Many of Yellow's ex-employees went to Checker Cab, which purchased Yellow's equipment and captured Yellow's market share. But Checker's equipment was generally substandard, and it remained that way despite the large increase in revenue. Employee morale was low. Workers had few benefits or rights, and little control of their workplace.
In the summer of 1976, a union organizing drive began at Checker. Over seventy-five percent of the workers signed certification cards for the Retail Clerks Union. A general meeting was called so the Clerks could meet their potential new members. When thirsty cabbies downed several cases of beer, and clouds of sweet smelling smoke rolled through the room, the Clerks had second thoughts and withdrew their support.
Aware they were without legal protection after the withdrawal of the Retail Clerks, the organizers quickly contacted other unions. Within a week, the Organizing Committee recommended joining the Laundry and Dry Cleaners International Union (LDIU). In the fall of 1976, the LDIU charted the Wisconsin General and Industrial Worker's Union (WIGIWU), Local 10-4 to represent Checker employees and in December the employees endorsed it as their sole negotiator.
Union Representatives met with management during most of 1977 to hammer out a contract. Discussions proved unproductive. However, after a four day strike in September, 1977, Checker management caved in and signed a contract. During the next year, negotiations moved slowly and relations were strained. Employees filed 25 grievances. None were resolved. In September, 1978, talks broke down and for the second time in twelve months, a strike was authorized. Management tried to maintain operations with scab labor, but the union shut them down completely within a few days.
In December, rumors surfaced that Checker would stay closed permanently. A variety of sentiments developed among the strikers. Some felt guilty about getting employees into something which might cost them their livelihoods. Some were frustrated and angry because the union was unable to reach a negotiated settlement. Some began to feel that if Checker did close permanently, it would be better than working for its management again.
In January, 1979, ex-Checker workers Steve Krumrei, Jim Cooley, Dave Everitt, Jim Symon and Jim Applebaum resolved to create a worker owned company. They felt they had, amongst the membership, enough expertise to be successful in the taxi business. When it became apparent that Checker management would not reapply for taxi permits, Union Cab incorporated. Later that month, it applied for 20 permits. From March to June, Union Cab contacted lawyers, made financial projections, applied to the Federal Communications Commission for a radio license and began seeking the estimated $150,000 necessary to begin initial operations.
By early June, Union Cab had only obtained enough money to put a down payment on the radios. Every day was a juggling act, as projected expenses had to be reevaluated in light of available sources of capital. Finally, a loan package was arranged: $95,000 came from the First Wisconsin Bank (Firstar), $35,000 from the Madison Development Corporation, $15,000 from Wisconsin Horizons and almost $15,000 fro the sale of preferred stock. On October 29, 1979, Union Cab of Madison Cooperative, Inc. opened for business, with 11 new cabs. It was difficult at the beginning, with no yellow pages ad and an average wage of around $0.80 per hour. The Cooperative lost $35,000 in the first three months. Losses were expected, but their magnitude concerned everyone. On February 14, 1980, the City permitted the cab companies to raise their rates. At that point, Union turned the corner.
On April 23, 1980, Blue Cab folded, leaving Union with a monopoly in the meter business. One week later, Madison Metro bus drivers began a two month strike and business increased dramatically. Union added five cabs, and what was normally the slowest time of the year became a bonanza. In September, Union added five more cabs.
On October 14th, the BoD selected Steve Stepnock as the first Workers' Council Co-captain. Four months later, he became the Personnel/Operations Manager, following founder Jim Cooley's resignation. As the cooperative grew and evolved into a successful business, its members began coming to terms with the realities of operating in the context of the larger community. Some members wanted Union to be a springboard for spreading individual ideologies. Others wanted Union to be run more like a conventional business.
In the spring of 1982, the BoD surveyed member opinions regarding potential political, social or charitable involvement in the community. In April, based on the finding from the survey, the BoD passed a solicitation policy which stated that the cooperative "shall not be affiliated with any individual or organization whose solicitation is deemed ... to be essentially political, religious, or charitable in nature." The policy also forbade official company statements or the disbursement of co-op funds in support of such groups, and required such groups to obtain approval from the BoD prior to soliciting on cooperative property.
Graveyard dispatcher and former Board member John Roh summed up the idea of the policy: "We have to exist in a capitalistic society and we're not going to exist at all if we tend to do things like we would really like to do. That is a compromise in my values and a lot of other people's values but we wouldn't be in existence if we didn't and I think that ... is much more important than being politically right with a certain segment of the city."
In November, 1982, after having outgrown its facilities at 703 E. Washington Ave., Union Cab moved to 1321 E. Mifflin St. The new location had more office space, a paved lot, and a much improved maintenance area.
On January 1, 1983, Union Cab expanded it's operation with three airport limousines. The move marked the recapture of the last portion of the Checker Cab bargaining unit lost in the strike.
In the winter of 1983-1984, the volume of business was so great that Union was unable to provide the service that the community had come to expect. By February, morale was low, due to UC's service weakness in the winter months.
The BoD elections drew only four candidates for the four available positions. There was a move to reopen nominations to attract more candidates but the BoD refused because they felt that everyone who had cared to run had a chance to do so.
In March, the BoD appointed David (Rosebud) Sparer permanent coordinator of the monthly newsletter. The position was designed to improve morale and provide more effective internal communications.
In July, 1984, outspoken management critic Rob Greenburg resigned his BoD seat. He cited several areas of dissatisfaction with the Co-op, including an inability to deal with winter business, management inflexibility in personnel decisions and the BoD's failure to adequately evaluate management. In Greenburg's words, the firing of an employee "was terribly disappointing to me and soured my enthusiasm for us as a worker co-op because it indicated the loss of our heart, soul and spirit." His resignation stimulated much discussion around the Co-op about how to improve UC's policies, organization and operations.
By the fall of 1984 it was apparent that Union Cab was outgrowing its internal structure. On October 9, the BoD voted to work with an advisor from the Inter-Community Cooperative Council (ICC) on a plan to reorganize the management structure to improve its efficiency.
Looking back on that time, former General Manger Steve Krumrei said, "Some of the inherent problems with our structure became evident as we grew. At a certain point, size dictates some changes in just how you manage an organization and how it operates. I think it's inevitable. When you have over a hundred people you can't have the same intimacy and the same openness and awareness as you can when you've got a group of 20 or 30 people."
Union Cab continued to grow even as management reorganized. In the same month as the reorganization began Union Cab paid off its largest startup loan, the $95,000 from the First Wisconsin Bank. In January, 1985, our airport limo operation got a boost when Bender Taxi went out of business, due to poor management and to competition from Union. In January, 1985, the BoD accepted the recommendations of the Reorganization Committee. The Personnel/Operations manager, originally being one position, was split into two with Steve Stepnock becoming our first full time Operations Manger. The position of General Manager was created, and was filled by Steve Krumrei. In addition, four committees were created to advise the BoD; Finance, Education, Personnel and Planning. (The Finance Committee was abolished in May and its functions were given to the Planning Committee. A new Operations Committee was also established.)
In February, 1985 the BoD elections drew 11 candidates for the four seats, demonstrating a renewed willingness by members to get involved and participate. In March a half-time Personnel Manager was hired, Hank Sommers. He immediately began a review of personnel policies and sought to standardize procedures and job descriptions.
In April the shop steward system was adopted by the BoD to provide a direct link between workers and management. Each shift and each department chose a person to represent them.
In July, Union Cab borrowed $170,000 from the National Cooperative Bank for 15 new Reliants to replace the aging fleet of Aspens and Volares and a new SMT-80 communications system from Motorola, which included an in-house computer. On July 12, Union Cab entered the computer age with the first of its new Reliants. In each cab was a data transmission board which allowed drivers to communicate with dispatch by pushing buttons indicating location and status. Several months of frustrating trials of the system followed until all the bugs were worked out.
In August, 1985 Union began teaching a required Defensive Driving program to all new employees. The program was taught by two drivers who had been certified by the Department of Transportation.
In October, Steve Stepnock ended his ten year attachment with the cab industry and resigned as Operations Manager. He was replaced in November with Mary Heller, a long-time Union employee. Mary only held the position for only a few months, and was replaced by Ned Miller. In November UC adopted a new Employee Assistance Program designed to refer troubled employees to appropriate agencies where they could receive help with their problems.
In April 1986 the BoD approved an anti-harassment policy which prohibits unwelcome advances, slurs or physical conduct toward other co-workers or customers. In that same month a vacation plan was approved providing a week's paid vacation for full-time employees.
In June Union was confronted with a new competitor. Madison Taxi arose from the ashes of Bender Cab. MT began with eight cabs and one limo and cut into Union's business an estimated 10%.
In April of 1987 General Manger Krumrei decided that after seven years with Union it was time for a change and submitted his resignation to the Board of Directors. Also resigning was Operations Manger Ned Miller. The BoD immediately set up an Executive Search Committee and, after reviewing more than one-hundred applications, hired long time Union driver, dispatcher and Board member Perry Benson to fill the position of General Manager/Operations Manager. Benson, in turn, hired weekday dispatcher Sal DiGiosia as his assistant. Picked to fill the newly created position of Financial Manager was Martha Crawford, an MBA who was one of the founders of Women's Transit Authority. Later that fall, Maintenance Manger John Disch left the Cooperative and was replaced by Brad Bergstrom.
Faced with eroded market share and declining revenues, the new management team began by cutting expenses and attacking the business account market. Delivery business doubled in less than a year's time, the passenger market began to return to Union and red ink was replaced by black. Increasing revenues produced fatter paychecks and worker morale improved.
In the fall of 1987, the BoD, judging the market to be too unsettled, decided against a meter rate increase. The alternative was cutting wages and benefits. In December of that year, the Board "bit the bullet". Wage cuts were designed to be as equitable as possible, and to put the Cooperative in a break even mode for the '87-'88 fiscal year. Market share and business volume continued to grow however, and Union was able to turn a 1.2% profit.
In the fall of 1988, secure in our hold on the market, and faced with increased expenses and the need to relocate, the BoD approved a meter rate increase. Concurrently, the Board completely revamped the pay structure at the Cooperative. Wage cuts of the previous year were rescinded, and a new system, designed to be more open and more equitable, was enacted.
Also in late 1988 the Board of Directors approved a Pennsylvania Avenue location as the site for a new facility. The move was forced upon the Cooperative by the loss of the lease at 1321 E. Mifflin Street. After much discussion and reworking of the building plans, the blueprints were frozen and ground broken in the spring of 1989. In mid September, in an awkward move, operations were switched to the new offices and the first call from the new facility was dispatched on a Sunday. The new building featured a larger drivers' room, a lunch room, locker room, increased dispatch office space potential, a large conference room, an on site fuel depot and a much improved maintenance facility.
Today Union Cab has gross annual revenues in excess of $7 million with approximately 230 active or probationary members and 65 cabs. We continue to operate under the principles of the Cooperative movement and maintain a "one-member, one-vote" worker democracy.
We intend to continue to grow, serving the transportation needs of Greater Madison, and providing good jobs at a living wage in a safe, democratic and humane environment. But Union Cab is more than just a business; it is an idea and an ideal. It is one of a very small number of worker owned and operated businesses in America. Some consider us the wave of the future, others think we will be relegated to the scrap heap of utopian idealism. Our Membership will determine which it will be.