Montreal based Téo Taxi abruptly ceased its operations on Tuesday. The company which ran a taxi service with a fleet of electric vehicles, and employed about 450 people, made the announcement in the wee hours of the morning. Drivers showing up for work found security officers denying them entry at the gate. Hundreds of recently unionized teamsters suddenly found themselves without work.
The brand with the green and white cars operated for about 3 years, and drove its customers just under 25,000,000 kilometers in that time. They claim to have saved 5,000 tons of greenhouse gasses from escaping into the environment around Montreal.
Téo Taxi’s parent company, Taxelco, also owns Taxi Diamond and Taxi Hochelaga. Both brands will continue to operate normally. A statement on the Téo Taxi website claims that the company will continue to pursue the modernization of the taxi industry in Quebec through those brands in the name of more sustainable transportation.
The business model, deigned to be sustainable from an environmental perspective, proved unsustainable from a financial standpoint. The company also released a 16 page “memoir” highlighting its successes and failures over the past 3 years. CEO Dominic Becotte told reporters at a news conference later in the morning that there were two principal reasons for the shutdown.
First, rules governing the taxi industry in Quebec prevented the company from doing things like applying surge pricing, charging fees for reserving a car in advance or requesting a fancier class of automobile (all of which Uber is allowed to do).
Second, electric car technology, and certainly electricity storage technology, is not yet advanced enough to run an all electric taxi company in an optimal fashion. Batteries needed to be charged multiple times each day, and more so in the frigid winter months. This means fewer hours on the road and less revenue for the company.
XPND Capital, the Caisse de Depot et Placements, Fondaction CSN and the FTQ all have a stake in Taxelco. Those investments, combined with government loans and grants the company received total more than $30 million.