Kaiser is a liberal labor lawyer who describes in fond detail the battles he has fought for the drivers of Yellow Cab, one of the three established cab companies in the city. He spins a tale of championing the little guy. But raise the Quick Pick case and he replies, "The market is inelastic in this town." Add more competitors, he warns, and chaos would ensue.
Poundstone, on the other hand, is a free-market Republican who counts Ronald Reagan as a personal friend and was a Reagan delegate at both Republican conventions that nominated him. She too asserts that the taxicab business is atypical -- not responsive to the touch of the invisible hand. "The people who want to have this industry deregulated are the ones who don't want health inspectors in restaurants."
The taxicab business in Colorado is a "regulated monopoly." In exchange for a limited number of licenses granted by the PUC, the holders agree to provide consistent service at a regulated price. But in Denver the process regulates what drivers -- not the companies -- make. The PUC regulates taxicab fares -- which, along with tips, make up the drivers' sole source of income. Meanwhile, what goes unregulated is a lease payment made -- in advance -- by the driver to the company on a daily or weekly basis. That payment, appropriately known in industry jargon as "the payoff," covers company overhead.
The payoff is set by a contract between the drivers and the company. In 1986, after a previously unsuccessful attempt, Yellow Cab, the former employer of Leroy Jones and his three partners, prevailed upon the drivers to change the contract, allowing the company to raise the payoff on short notice. In the 12 years Ani Ebong was a driver for Yellow Cab, the company was granted two fare increases totaling 10%. Meanwhile, it raised the payoff required from drivers who didn't own their cabs by 144%.
In February 1990 the drivers persuaded the PUC to examine the payoff system. Arthur Staliwe, an administrative law judge at the PUC, concluded, "Most Denver drivers appear to be working for between $2.75 and $3.00 per hour, excluding gratuities. . . . Further, because there are only three certificated taxi companies (an oligopoly) the companies are in a position to extract 'economic rent,' i.e., sums of money greatly in excess of costs from the drivers."
He further noted that "neither this agency nor anyone else regulates this payoff . . . and it is this charge which must be regulated pursuant to statute."
Efforts to change the law were met successfully in the state legislature by opposition from the cab companies. To this day the payoff remains unregulated, and only three cab licensees continue to operate in Denver.
As for Leroy Jones, his phone has been turned off, and the bills mount as he struggles to provide for his wife and five children. He holds down two jobs. By day he is a peddler. He drives an old van, its body dented, its windshield cracked, to street fairs, where he sells T-shirts, mugs, picture frames, and other odds and ends. At night he is a vendor at Colorado Rockies baseball games, lugging cases of beer.
Jones is a good-natured, heavyset man, and in his hustling to get by, he represents many on the margins of the U.S. economy, for whom effort does not always translate into reward. For him, the last two years amount to "Russian roulette on a roller coaster. You know you're right. You believe in the system, and then you don't see justice. All we are asking for is the right to fail or succeed on our own merit."
Jones adds that he is a person without much education, without any special advantage, without many resources. That, he fears, dooms him. "The lawyer's son will be a lawyer; the doctor's son will be a doctor," he says. "But my son is destined to be a laborer. All I can offer him is the sweat off my back, but right now there are all these other people living off that sweat. Why shouldn't I profit from my own labor?"
Jones and his three partners left Yellow Cab to start their own company because of the hefty payoff demanded of them. They had grown tired of the featherbedding and favoritism that took place within a company that had little competition from without. Yellow Cab, they believed, was being run for the benefit of a select few in the company's hierarchy -- even though it was nominally a cooperative and all the drivers were considered shareholders.
Yellow Cab is now in receivership, a step to forestall bankruptcy. The receiver, Karen Mathis, is a lawyer with no prior experience in the industry. Since her appointment, in April 1991, fees paid to her and her law firm have ranged from $25,000 to $30,000 a month. (Mathis acknowledges that this is part-time work for her -- "I also have my law practice." She says she cannot estimate how many hours a week she spends on Yellow Cab matters.) Meanwhile, since Mathis took over, Yellow Cab's financial condition has deteriorated. She is currently negotiating to sell the principal assets of the company -- to infuse it with capital. Thus, in two years Mathis and her firm took more than $500,000 out of a company she has publicly described as "undercapitalized."
America's law schools continue to crank out more lawyers. In 1992, according to the National Conference of Bar Examiners, 52,826 people passed the bar exam, a 23% increase since 1983. Last year Bill Clinton appointed a cabinet that he claimed "would look like America." Thirteen of its 18 members are lawyers. So, too, are the president and his wife.
