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Monday, Sep 25, 2023

The Briefing

Scott Schaffer, senior vice president of San Gabriel Transit Co., became very busy on New Year’s Day this year. That’s when his company became one of two franchised taxicab providers in the San Fernando Valley. Schaffer’s company was already well-known elsewhere in Southern California, operating 400 cabs in 50 cities in Los Angeles, Riverside and San Bernardino counties, before it took over the franchise previously held by Valley Cab Co. Schaffer spoke to Business Journal reporter Jacqueline Fox about the challenges of taking over an established market, finding enough drivers and cars to meet the demand, and establishing a presence in a new market with 1.6 million potential new customers. “Initially, the real core problem was from a labor standpoint. First of all, where our other fleets are more like co-ops (co-owned vehicles), the Valley is different. We had to provide our own cars and we had to have enough cars to cover the business and enough business to retain drivers. “We have 60 vehicles in the Valley today and about 84 drivers. But we are actually behind on our implementation schedule, which essentially says that we have to put 166 cars out on the street by Jan. 1, 2002. “Not only did we spend a lot of money buying new cars, we also spent a significant amount of money doing a marketing program to get our name out there. We did that through cable TV, direct mail advertising and just going out to bars and leaving our cards. “So we are now four full months into that and doing between 400 and 600 orders a day, but that’s compared to United Taxi (the other Valley franchisee) which is doing about 1,800 orders a day. “Getting good taxi drivers to come on board has been tough, especially in today’s tough job market. But we were fortunate in that many of the Valley Cab drivers were willing to come over to us, which is very common actually. And, unlike in our other areas, where cab drivers own their cars, we own these cabs. So it’s easier to hire (in the Valley) because drivers don’t own their own cars and they don’t need money to buy one. They just need a job. On the other hand, we now have a waiting list of about 20 drivers and not enough cars to put them in. A taxi costs about $12,000 when it’s all said and done. And I buy four cabs a week, so spending $50,000 a week isn’t always that easy on top of paying the other bills.”

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