How Employee Ownership Benefits Immigrant Entrepreneurs

Abdi Buni, Green Taxi Cooperative

Some individuals have a mistaken idea that immigrants do not contribute to the U.S. economy. I came to the United States from Ethiopia in 1989 looking for a better opportunity. Since 2010, I have founded three employee-owned taxi companies. First, I started with Union Taxi Cooperative with 262 men; then I helped to found Union Taxi in Portland; this year, I founded Green Taxi Cooperative in Denver, the largest taxi company with 800 driver-owners.  

At Green Taxi, our drivers come from 37 different countries. They can speak whatever language in the world you want. At the same time, many have graduated from higher education institutions in their countries of origin; some are even doctors and engineers. So why did they become taxi drivers?

Green Taxi Co-op, which opened for business July 1, 2016, serves all of metro Denver

Green Taxi Co-op, which opened for business July 1, 2016, serves all of metro Denver. Photo: Nathan Schneider

To work in the U.S., they must be accredited by a U.S. university, but while going back to school would be ideal, it is a luxury for most. After arriving in this country, many immigrants’ first priority is to feed their families. Taxi-driving is a low-skill job that they can start immediately and that allows them to meet their family’s basic needs. 

I entered the taxi industry and quickly saw how improving one’s quality of life through taxi driving is difficult for people like me. The taxi industry is a system where one party owns the market. Rather than creating capital for their employees, taxi business owners profit from their drivers. Drivers sign a contract and pay taxi company fees each month, whether or not they make that much money from their fares. Though driving a taxi has low startup costs, the ongoing leasing fees to drive one in metro Denver range from $440 to $1200 per week.

It was always my thinking that if we could create our own business, we would cut costs by 75%, and with the founding of taxi cooperatives, we have done even more.  When a driver works for Yellow or Metro Taxi in Denver, he typically pays $2400 per month to operate a taxi, but when he joins an employee-owned business like Green Taxi, he only pays $75 per month.

As you can imagine, If you are required to pay someone else up to $1200 per week, you cannot relax. You will work up to 14 hours per day just to pay it back. However, if you own the co-op, your membership is less than $20 per week. That pressure that was on you at the other taxi companies is removed. As a result, you have more time to spend with your family and to be present in their lives, which improves everyone’s quality of life.   

Driver-owners discuss a proposal.

Driver-owners discuss a proposal. Photo: Nathan Schneider

Not only do our drivers have more time to spend with their family, drivers are also spending the extra money that would have gone to fees on their families. They are now able to save money for emergencies, for a new home, for retirement, for education, and for their children’s education, all of which improves their self-sufficiency and adds value to the U.S. economy. Green Taxi also has the largest number of female cab drivers in the state. While women drivers are rare in this industry, we have something even rarer: 30 women who actually own part of the company, and you can bet the capital they earn is going back to their families.

To become a driver-owner of Green Taxi Cooperative, each of our drivers committed to pledging a one-time membership fee of $2,000. It is a large sum of money, but they saved for it because they see the benefits that come from owning their own business.  With other taxi companies, they pay $24,000 or $25,000 per year in fees, while they only pay $2,900 for their first year at Green Taxi and only $900 each year after that.

Green Taxi Co-op driver-owners vote on a proposal

Green Taxi Co-op driver-owners vote on a proposal. Photo: Nathan Schneider

In antiquated taxi companies, you must pay fees even if you cannot work due to illness or emergencies. Ride share companies like Lyft or Über are a slight improvement because you have no fees if you do not work. However, the employee-owned model is even better than ride share because it empowers drivers and gives them greater self-determination. The driver-owners feel that this is their dream. They think, “I own the business now. This is my number one priority. I am a part of a business.” 

For so many of these newly arrived immigrants, it is a dream come true to own a business in America. The co-op gives them the opportunity to own something and inspires them to imagine new possibilities. I have heard some of them say, “We already own a business. We could own a gas station. We could purchase a garage as a co-op.” And this entrepreneurship is good for them, and it’s good for competition in the market economy. 

Abdi Buni is a transportation entrepreneur and the founder of two of the largest taxi cooperatives in the country.