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How taxi companies Yellow Cab, United rose to dominance in Hillsborough

TAMPA — In 1967, the manager of the only cab company in town told the Tampa Taxicab Commission his drivers made about $112 per week. Adjusted for inflation, that's $742 in today's dollars.

Drivers were employees then, with health insurance, vacations and bonuses, city records show. But in 1975, the Yellow Cab Co. jumped on a national trend and made its drivers independent contractors. The agreement cost cabbies their benefits but let them keep whatever they made.

At the time, Yellow Cab manager Nick Cambas told the Tampa Times: "This should be the answer to those squawking about the little man not having a chance to make it in business."

Thirty-six years later, the little man still awaits his chance.

Drivers today say the system leaves them poor and at risk. Their predicament is compounded by a lack of choices: Two companies control 87 percent of the county's permits.

City records show their road to domination was filled with crooked rules, legal battles and one blatant conflict of interest. All worked to block competition.

When the commission first convened in 1947, records show Yellow Cab's predecessor was one of six cab companies. But by late 1965, Joseph Giglio, the grandfather of the brothers who now own Yellow Cab, had bought out the competition.

Eleven days later, Giglio applied for 100 permits. In the previous 17 years, the commission had awarded 22. But Giglio had an advantage: he and one of his cabdrivers were two of the five deciding ballots.

By one vote, Giglio got his 100.

A year later, local auto shop owner John Castellano applied for 60 permits. The commission turned him down, telling him all the permits were taken.

For months, Castellano fought the decision. Then, in May 1967, news reports said a state attorney was investigating Giglio's taxi monopoly. Days later, Giglio turned over 50 permits to Castellano, who formed United Cab.

Yellow and United have been archrivals ever since.

With competition, Yellow began hemorrhaging permits, unable to keep them filled at a profit. United soon earned an extra 50, but Yellow swiftly sued.

The judge sided with Yellow on a technicality: that any new permits must first be offered to existing permit holders. It was the rule that for years helped Yellow and United keep their grip on the market, records show.

The law was thrown out when the county took over taxi regulation in 1976. But the companies' duopoly was already secure, and stands unbroken.

The companies also might have been aided in a way that doesn't appear in the official record, said Scott Deitche, author of Cigar City Mafia. Nick Furci was the general manager of Yellow Cab from 1950 to at least 1972, according to federal records. He then managed United Cab.

He also was twice identified in congressional hearings as a member of the Tampa Mafia.

Times researcher John Martin contributed to this report. Jack Nicas can be reached at (813) 226-3401.

How taxi companies Yellow Cab, United rose to dominance in Hillsborough 04/16/11 [Last modified: Monday, April 25, 2011 10:51am]
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