Santa Rosa's A-C Taxi plans to close over workers' comp battle
Owners of one of Sonoma County's largest taxi companies met with drivers and employees on Thursday evening to tell them the company would close by year-end, as funds have dried up for a legal battle with state labor regulators over whether drivers are employees.
'They say they are protecting workers, but they are putting them out of business,' said Kevin Kroh, president and co-owner of A-C Taxi, which also operates Healdsburg Taxi.
The company is facing a $500,000 court judgment from July plus mounting legal bills in a three-year battle against the Department of Industrial Relations Division of Workers' Compensation. At issue is whether the company's drivers are independent contractors or employees, the latter of which need to be covered by workers' compensation insurance. A-C Taxi says its drivers aren't employees because they lease the vehicles and aren't directed to work. The state insists the drivers are because they get fares through dispatch, which the company says is part of the lease package.
The matter went to a hearing a year ago, at which a number of drivers testified that they were contractors. Then the case went to Sonoma County Superior Court.
Also at stake from the A-C Taxi shutdown are dozens of rides a day the company provides under contract with local hospitals, shelters, nursing homes and charities, according to Kevin Kroh, who has owned the business for 20 years with his wife, Jennifer.
Such voucher fares make up 65 percent–70 percent of the company's business, or 15–18 rides for a driver with 25 in a day, Kevin Kroh said. Under these voucher contracts, negotiated over the years with each organization and agency, the driver is paid for doing the work, then the company bills the organization.
One driver at the Thursday meeting, Jim, said one such voucher included a $550 fare to return a patient to Eureka after a $15,000 emergency helicopter trip to Santa Rosa.
'My hope is we can find a nonprofit to take over A-C Taxi to serve these people,' Jim said. 'It can't be something that benefits the owners.'
The planned shutdown would affect about 20 at A-C Taxi.
'It would have been 30, but in the past three years, we have not been able to put money back into the company,' Kroh said. In that time, a half-dozen vehicles have been taken out of service because of wear and tear, but less than half were replaced because of the drain from the legal battle, he said.