Teo Taxi shuts down suddenly; 450 drivers out of work
Published Tuesday, January 29, 2019 7:13AM EST
Last Updated Wednesday, January 30, 2019 8:52AM EST
Drivers for Teo Taxi were surprised to show up at their headquarters on Tuesday morning only to be told they would not be working.
Security guards turned away drivers at 4 a.m. when they arrived on site to pick up their cars.
"It's been almost two years that I've been working for this company. Finally, I get here at 4 a.m., and I go to grab a vehicle. [A guard says] ‘Sir, come and see me. There is no work today. Everybody go home.’ Why? I don't know," said one driver.
Taxelco, the parent company of Teo Taxi, said at a morning news conference that there were two main reasons it was shutting down.
Interim CEO Dominic Becotte said the company was constrained in the amount it could charge customers, pointing out that Uber changed its pricing based on demand, but that legislation was preventing taxis from changing prices on the fly.
"If Uber can change its tariffs and rates as a function of demand while the taxi industry cannot, it is a major concern for all the players," said Becotte.
All-electric fleet unsuited for winter
He added a second reason was that Teo Taxi's fleet of all-electric vehicles was not optimal for operating in Montreal's winters. He said only the Teslas could run for an entire day without being recharged while the Kia Souls and Nissan Leafs in its fleet needed to be charged at least twice a day in colder weather.
A few days ago, sources reported that Taxelco, founded by businessman Alexandre Taillefer, was preparing for a significant restructuring and would be under the protection of the Bankruptcy and Insolvency Act.
Teo Taxi's drivers unionized last year, and Teamsters spokesperson Christopher Monette said employees were kept in the dark until Tuesday morning.
"This press conference was the first briefing from the company in weeks now. And that should not have gone down that way. As the union representing the 450 former workers of Teo Taxi, we should have been in the loop and we should have been briefed on this well in advance," said Monette.
About a year ago, the Caisse de Depot and the FTQ investment fund, along with Fondaction CSN and the XPND Capital fund, injected $17 million into Taxelco as part of a new round of financing to purchase new vehicles and to hire new staff.
Taxelco also received $9.5 million in grants from various government departments, and the previous Liberal government gave the green light to a loan of $4 million.
Premier Francois Legault said Tuesday there isn't much more the government would do to save Teo Taxi.
“As you know, I'm trying to develop more well-paid jobs. For me, a job at $15 an hour is not a well-paid job,” he said.
The majority shareholder of Taxelco is XPND Croissance Fonds, which is part of XPND Capital, where Taillefer is a senior partner.
There is no word so far on what Taxelco will do with the almost 200 cars of the Teo Taxi fleet.
The two conventional taxi companies also owned by Taxelco, Taxi Diamond and Taxi Hochelaga, will continue to operate as usual.