At Union Cab, co-op members earn a living wage and run a successful business
Jane Burns | Posted: Wednesday, August 26, 2009 11:55 am
Sometimes, when cab driver Butch Hanson comes in a little early to start his job, he realizes his work environment is not like most other people's.
At Union Cab's headquarters on the east side of Madison, there's a Quonset hut where smokers can sit or co-workers can chill at the end of a long, late shift. And they're not just sitting around rehashing their work day. "It's interesting to come in here at 3 o'clock in the morning and have some band practicing in the hut," says Hanson, a Union Cab driver since 1987. "It makes you realize you're not in Kansas anymore."
But beyond the music cranking into the night, Hanson and his co-workers know their world is different because they have a job to come to and few worries that that is going to change. In a profit-driven world that has seen the bottom fall out, Union Cab's structure as a worker cooperative has created a solid business that gives its members a peace of mind that is rare in today's economy.
Thirty years ago this October, Union Cab was born out of the ruins of a strike at another cab company. It has grown from 13 cabs and 45 drivers that first year to 65 cabs and 171 drivers; the company also has five mechanics, 24 dispatchers and a three-person information technology department and an administrative staff.
The company is owned and operated by the people who work there; there's not one boss, there are 215. The people who work there call themselves "members," not employees. The unusual structure works: Last year, for the first time, Union Cab charted the highest number of trips and passengers among the city's cab companies, according to city statistics.
Besides being known for its iconic yellow taxis, Union Cab also has a reputation for having lots of writers, musicians, artists and PhD holders within its ranks. But that's not what makes Union Cab interesting, says account manager John McNamara. In fact, the stereotype just diminishes what the company has achieved, he argues.
"We're working-class people who can run our own company without the parental figure of a boss in charge," McNamara says. He says Union Cab has proven that working people can manage their own company "efficiently, financially and in a humane way." And while it's true that many members have college degrees, the company's success is due to "working-class people who are willing to give time to run this company and make it work. That's something people forget."
Nobody really plans to drive a cab. That seems to be the consensus of many people who work at Union Cab, even those who have been there for decades.
Then again, life is kind of like a cab ride. You get in, you have a destination in mind but you might not be sure how to get there.
Like any other company, Union Cab wants to make money. It's how it makes money that distinguishes it from other businesses and draws people to the operation.
That's why Michael Moore's film crew spent some time at Union Cab for his next documentary, "Capitalism: A Love Story." The film comes out Oct. 2, and Union Cab members don't know if they made the cut or ended up on the editing room floor. Likely part of the appeal for the filmmakers was Union Cab's mission: "To create jobs at a living wage or better in a safe, humane and democratic environment by providing quality transportation services in the greater Madison area." A sign declaring that and other company values is prominently displayed at Union Cab headquarters on Pennsylvania Avenue, and it's also posted on the company's website, unioncab.com.
In a decade that has seen the ratio of CEO-to-worker pay reach 400-to-1, McNamara says the greatest spread of management-to-worker pay at Union Cab is about 2½-to-1. Managers and veteran drivers can make salaries exceeding $40,000 and health care is also offered as a benefit, a rarity in the taxi business.
Union Cab drivers don't own the cars they drive; they work on a commission that starts at 36 percent and can rise as high as 60 percent or more. Drivers at most other cab companies lease vehicles from the company and keep the difference at the end of the shift. Even with slow nights, Union Cab drivers are guaranteed the federal minimum wage over a 40-hour pay period.
So, while many members didn't plan to work at a taxicab company, once there they find it fits in well with the rest of their life. "It hasn't made me rich, but it's allowed me to live a life of integrity, which is something you can't put a price on," says Fred Schepartz, who started at Union Cab in 1988.
Schepartz came to Madison to attend journalism school but by the time he graduated in 1985 he was disillusioned with the state of mainstream media. He was an activist for Central American democracy causes and found the coverage so inaccurate it soured him on the news business.
Instead, he became a cab driver and pursued fiction writing and publishing. For years he put out a print edition of the literary magazine Mobius: The Journal for Social Change, though in recent years has limited it to online publication. And in 2007, his novel "Vampire Cabbie" was published.
Schepartz says he doesn't think he'd be able to have such a creative life away from work if he had many of the jobs in today's corporate culture. Union Cab "is the kind of place where, at the end of the day, you don't feel your soul has been sucked out of you, that you're incapable of doing anything during the part of the week when you're not working," he says.
Brian Hill tried other working environments before he settled on Union Cab in 1991. While driving a cab in Milwaukee on a lease arrangement, Hill says he'd work 12-hour shifts and sometimes owe the cab company money at the end of the night. "That was depressing," he says.
At Union, Hill started as a driver, moved to dispatch and then the finance office. When Union Cab wanted to upgrade its computers, none of the available software fit the company's needs. The general manager asked Hill if he could create something the company could use for its dispatch service, and he said he probably could.
"I was a comp sci major for a while," Hill says. "That, after tech theater and music and before ecology and journalism. And that was all at a two-year school."
Hill, now the company's information systems manager, supervises two staffers. "So far, all my staff have graduated on to better jobs and make more than me," he says. "I talked to one and he says he's making more money now, but I could tell he's just beat. He's just in a much harsher environment than here."
Hill has done side work creating shareware, but says he's not looking for any other job. "I could probably make more money elsewhere, but there's so much other stuff I would lose - a voice in what I do, a voice in how I do it. Programmers that work for corporations have 12 people breathing down their neck. I don't have any of that, I just have to make it work."
Unlike Hill, Kristin Forde did have a specific college and career plan, but still ended up at Union Cab. Forde taught middle school in New Orleans and Madison but became so frustrated with the education system that she quit. She had no clear plan when she left teaching, but she knew she wanted to work in a creative and positive working environment where people were focused on problem-solving.
"I was envisioning a youth community center that was collaboratively run," Forde says. "I had no idea I'd end up on the education committee of a cab company." Since she's been at Union Cab, she has auditioned for a play and organized a gallery show of Union Cab artists at Yahara Bay Distillery that runs through the end of August.
Forde hears a few patronizing comments when people learn what she does for a living. "People will say out loud, 'There's nothing wrong with that, if you like it.'"
The way Forde sees it, there is absolutely nothing wrong with her choice: "I've never felt more content."
The heart of any worker cooperative is the concept of one member, one vote. But with 215 people working at a 24/7 business, it would be virtually impossible to get all members together to discuss company business.
At Union Cab, there is a checks-and-balances representative system not unlike a democratic government. A general manager and management staff answer to a board of directors, which is elected by and answers to the membership. The highest-ranking staffer, the general manager, is also a member and cannot serve on the board.
Within the governance structure, there are member-run committees for issues related to finance, elections, education, human resources and strategic planning.
"Over the years, they have really figured out how to blend a sense of ownership with a good process for making decisions," says Anne Reynolds, assistant director of the University of Wisconsin Center for Cooperatives. "There's a lot of talk within the company about the company," she adds. "That's good and bad but at least at Union you can find out what management is doing. There's a lot of transparency and openness."
In some ways, Reynolds says, Union Cab's structure is similar to other businesses. "Other companies may have hired an H.R. manager at $80,000 a year to do things a committee does at Union Cab," she says.
Committee and board members at Union are paid for their work, which usually adds an extra six to eight hours to their work week. Despite the additional compensation, some drivers, including Hanson, find their governance functions more stressful than just driving a cab. That should come as no surprise to anyone who's tried to engage in governance by committee: Collaborative decision-making is hard and democracy can get messy.
There will be more democracy at work next month, with board elections coming up. Three board seats are open, and a company picnic this weekend will also serve as a chance for candidates to campaign a little.
One debate that divides members is how green the company should be, given what it does for a living. There's been talk about switching to hybrid cars but the move would be a financial challenge. Union Cab buys used police vehicles at auction for between $6,000 and $8,000 and drives them for approximately three years.
"If the police switch to hybrid cars, we could," McNamara says.
McNamara estimates Union cabs travel an average of 100,000 miles the first year, 70,000 the second and 50,000 the third, with primarily city driving. A new Toyota Prius costs more than $22,000 and McNamara says he doesn't know if today's hybrids could take the pounding a cab requires or earn its money back in the three-year life span.
A perennial issue that is once again a bone of contention for this year's elections is whether power is evenly spread among management, the board and members. So while the Union Cab members interviewed speak warmly of the company and each other, there is workplace stress like any other place.
"We do operate kind of like a family," Forde says. "So you have all those weird and wonderful dynamics."
Union Cab has had issues before - big issues that almost ruined the company.
In 1991, Union Cab started a paratransit division and contracted with Madison Metro, the city's transit division. Four years later, it added a school bus division. "What that did was create three different cultures of drivers and workers," McNamara says. "Then we ultimately didn't understand how to price the different services. We really priced ourselves too low."
In 2000, McNamara says, the company lost its contract with Madison Metro and put its transit division up for sale. "We were hemorrhaging money. As our lawyer said, 'You can't lose money on every ride and make it up in volume.' That's kind of what was happening."
It was the first and only time there were layoffs. "Once we got the debt paid down, we focused on cab service, on customer service," McNamara says. "Within a year or so, we started to come around again. Since then, we've been pretty much growing until last year."
The economy has hurt Union Cab, McNamara says, but it has managed to survive without layoffs or pay cuts. Despite revenues of $6.3 million, Union Cab lost nearly $90,000 last year due to high fuel prices and some unexpected fuel tank repairs.
McNamara says the company's cost-cutting measures have included pay freezes, overtime restrictions and a slowdown on hiring. Even so, Union Cab carried 601,261 passengers, compared to 598,042 for Badger Cab and 407,080 for Madison Taxi. Union Cab made 438,005 trips, compared with 398,696 for Badger Cab and 239,941 for Madison Taxi.
"Our members should be proud of what they accomplished," he says. "This is our worst year since 2000 when we almost went belly up. If this is the worst it gets from now on, that's fantastic."
It might be just semantics to some, but Hanson is glad Union lingo does not use "employee" to refer to co-workers. "I really think of us as members," he says. "We share and share alike, good and bad."
Hanson knows what it's like to be an employee. He left Union to pursue his trained profession as a mechanical drafter and designer but that proved frustrating. "I got really tired of being a number and a dollar sign in corporate culture," he says. "The last time I got downsized, people who had worked there for 30 and 40 years were let go. Just gone. So I came back thinking it was just going to be until I found something else, and now it's seven years later and I've been on the board twice."
Lucy Oppegard, who first came to Union Cab 12 years ago, is also a refugee from the mainstream work world. "I'd worked a lot of places before, a lot of craptacular jobs," she says. "And because I've been here for 12 years, it's really skewed my idea of what a job should be."
Despite that, serving on the board at a time of financial and personnel issues stressed her out enough that she quit Union and took a job as a certified nursing assistant.
It didn't work out. She didn't like people timing her breaks. She didn't much appreciate being accused of sexual harassment because she didn't wear a bra. She heard about a friend at another job who was fired for joking that she wanted to take a nap on the job. Oppegard realized she'd taken the environment at Union Cab for granted, and returned.
"Not working for 'the man' is nice," she says. "There's something to having the whole ownership that I've never had in any other job and in every other job I've always been a peon. Here, there's respect among co-workers."
Union Cab is not unique in its structure; it's not even unique in Madison. Other worker cooperatives include Isthmus Engineering, Nature's Bakery, Just Coffee, Willy Street Co-op, Lakeside Press and Community Pharmacy.
Many of the Madison co-ops have been around for decades, part of a movement in the 1970s that was strong here and in the Twin Cities. Nationally, a new generation of worker co-ops is developing, particularly in technology and home health care.
"There's a different demographic coming up," says Melissa Hoover, executive director of the United States Federation of Worker Cooperatives. "It's not so much the PhD, college-educated, isn't-this-groovy thing anymore."
Hoover's organization, based in San Francisco, was founded in 2004 to help educate workers and help companies form their own co-ops. "We don't have a lot of hard data, but my sense is that worker co-ops are growing," and spreading to new areas, Hoover says. "Nonprofits and community development organizers are really interested in how shared ownership can be a model for creating good jobs."
McNamara is active with the national organization and although he believes in the cooperative model, he doesn't think it's the answer to today's economic ills for a troubled company to suddenly become a worker co-op.
One topic at the national level, McNamara says, is succession planning. As baby boomers get ready to retire, they have to start thinking about what to do with their business if they don't have family members who want to take over and they don't want to sell it to an outsider. McNamara says creating a worker cooperative might be one solution.
"We're an option," he says. "Workers can get their fair share out of the business and the business will survive. They won't see their life's work shut down or the jobs shipped to another state or country, and at the same time the workers will be treated well if they can take it over."
For the record, there are three Union Cab members with PhDs and one part-time driver has two. There are enough artists to have their own gallery show, enough musicians that they released their own CD in 2002 and in recent years three drivers have published novels.
"People joke about us being overeducated, but we're running our own business. You need education to do that," McNamara says. "People's brains aren't being wasted here. Developing a personnel policy isn't an easy thing to do."
Many turbulent years are behind it, and Union Cab is seemingly settling into a comfortable middle age. The members have a kind of comfort many other people don't have these days and consider themselves fortunate.
"We'll never outsource. A cab would take a long time to get here from Calcutta," Hill says. "That's nice. We don't have to worry about that at all."