Economy, transit cripple Cold Lake taxi industry

As seen in the Lakeland Regional

Taxi companies in Cold Lake are struggling to continue operations after the latest recession and a new free transit service combined to pull their fares away.

“Our business has probably dropped about 75 per cent,” said Kelly Kean, owner/operator of Base Cabs.

“It was getting bad. Without all of the oil workers our (ridership) had gone down, but once the transit system kicked in and people started using it, it literally killed the industry.”

Losses for cab drivers started in late 2014 when the price of oil crashed, driving hundreds of oil and gas workers out of the region and crippling the local economy.

Many of the workers in the oil and gas industry would fly in and fly out for jobs, resulting in them relying on cabs to get around while they were here. Anytime a worker was late and missed the shuttle a local taxi driver would cash in with a large fare by driving out to one of the many oil sites in the region.

“We were non-stop. At times we would have to have at least three cars out during the day,” said Kean. “On Friday and Saturday nights I could have used seven cars if I had them.”

Fast-forward a year and, like most businesses in the province, taxi companies are struggling to make ends meet, with fares nowhere near where they once were.

Kean says Base Cabs is now down to operating one to two cars during the week and four or five on weekends.

“Right now my drivers are averaging one call an hour each, before they would be getting three or four per hour each,” said Kean.

Kevin Madden, owner/operator of Continental Cabs also paints a similar picture, noting that his business is just barely getting by.  His company is averaging 20 to 30 fares per day, with the majority of their weekly fares coming on Friday nights and Saturdays.

“On a Friday or Saturday we need 20 taxis, but during the week we only need one or two,” said Madden. “The (challenge) is how many taxis can we have sitting around waiting for Friday night to come around without the company going completely broke.”

The struggles of workers and money leaving the region was compounded on Aug. 26 when the City of Cold Lake started operating a free transit service for residents of the community. The buses take a north route and a south route operating from 6 a.m. to 10 p.m., as well as a third bus running to the Kinosoo Ridge Snow Resort for a minimal fee.

Coincidentally, Tyson Vik and Viking Cabs started operations on that same day.

“(Transit) has affected me more than I thought it would,” said Vik. “I thought once it got cold that business would increase but it hasn’t been that way.”

All three companies mentioned the fact that they were banking on the cold winter months being their busiest for fares. Unfortunately that has not been the case.

Vik is also seeing approximately 15-20 fares during the day and another 20 fares at night, with Viking Cabs operating two cars at the moment.

“It is not as good as I hoped it would be,” said Vik. “I am looking for more consistency.”

Since the free transit service started in Cold Lake the service have averaged 391 riders per day, with peak hours being between 3 p.m. and 5 p.m.

“It didn’t take all of our business, but it has taken a substantial amount, those one or two fares an hour that we used to rely on,” said Madden.

“The eight or ten people an hour that are riding the bus, several of them would have been taxi fares.”

With Viking Cabs just having started up operations, Vik feels the company can be sustainable as long as his fares continue at the level they are. Any drop and he could be in trouble.

“As long as I keep consistent with the levels we are at right now it is sustainable,” said Vik. “If they were to drop 25 to 30 per cent I would have to re-evaluate the company at that point.”

The situation is dire for some of the other local cab companies. Both Madden and Kean very worried about what the future holds for their companies.

With people gone and less fares to be had, drivers at Base Cabs have been quitting one after another. The uncertainty has resulted in Kean wanting out.

“I have my company up for sale,” said Kean. “I am packing up and saying I am done with Cold Lake.”

Madden says he has been able to keep Continental Cabs going thanks to the major revenue generated during the boom in the oil industry during 2013.

“We got a little bit of a shot in the arm last year and that is what is carrying us through the last few months here,” said Madden.

“But winter is usually our busy season. Who knows what spring and summer will bring for us.”

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s