Union opposes demutualisation proposal for black cab drivers

Click to follow
The Independent Online

A campaign to keep thousands of London's black cab drivers part of a mutual co-operative was launched yesterday, despite the promise of windfalls of up to £5,000 if they vote to become a private company.

A campaign to keep thousands of London's black cab drivers part of a mutual co-operative was launched yesterday, despite the promise of windfalls of up to £5,000 if they vote to become a private company.

The Transport & General Workers Union (T&GW) yesterday said it objected to plans to demutualise Radio Taxis. Its 2,500 drivers stand to get £1,100 in cash plus 1,000 shares if they vote next month in favour of a proposal to bring on board an external investor and inject £10m into the black cab operator. But the union says this is a "short-term bribe for no long-term future".

"We oppose the plan on a general principle. Our members believe in mutuality and fear that giving up even part of the business would take away the control and influence drivers have," a spokesman for the union said. "The plan does not guarantee a decent standard of living and would leave control of the company in the hands of a few."

About 60 per cent of Radio Taxis' customers are picked up off the street, with the remainder located via a radio system that directs the nearest cab to them. The union fears many cabbies will leave the group if the proposal goes through, putting more pressure on other drivers.

The demutualisation proposal was sparked when an American entrepreneur, Brian McBride, head of the Yellow Cab Company of Cleveland , offered to invest £3.5m for a 26 per cent stake. The rest of the money will come from bank loans and a leasing deal. The shares, estimated to be worth £4,000, will be traded on an internal market.

The T&GW says it has a strong influence within the cabby community and its objection would carry some weight.

Radio Taxis needs a 75 per cent vote in favour to go ahead with the demutualisation plans. Geoffrey Riesel, the chairman, said yesterday he was confident of winning. "There will be, inevitably, a small proportion of drivers who will not agree with the deal," he said. "But this is not about selling out. It is about converting to a normal limited company and inviting in a minority investor to allow more funding into the business. It gives our drivers a future stake in the business with an equity holding that has the potential to grow."

Comments