The largest taxi company in San Francisco – home to ride-hailing app Uber’s headquarters – is set to file for bankruptcy.
Yellow Cab Co-Op has noted that business challenges and lawsuits from traffic accidents have led to their challenged financial situation, reports the San Francisco Examiner. The company is set to file for bankruptcy in a month, but will not close if it can properly restructure its business.
Many media reports have speculated that ride-hailing apps, which can generally offer lower prices for customers, have led to a big hit to taxi companies’ bottom line. Cab companies generally note that their drivers are a better option as they go through background checks and have extensive knowledge of city streets and don’t employ surge-pricing like Uber, where costs go up based on demand.
As taxi companies deal with the impact of ride-sharing, many cities are also looking at ways to regulate the industry and deal with tensions between traditional taxi drivers and informal drivers.
Last week, the city of Chicago announced its plans to launch its own universal taxi app for the city, which would be the first of its kind. The service would require that all licensed taxi drivers in the city sign up.
Read more: London’s black cabs fight back against Uber