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Is it fare? Colorado cab companies eye merger

Colorado business owners generally understand that to be a success, they must develop both long-term and short-term goals and then meet these goals. Figuring out how to achieve this can be a very difficult and complex process.

Some entrepreneurs find long-term success by merging with or acquiring another company. This can be a very tricky process both legally and professionally, but it is one that allows a company to grow and expand their reach into the market. As beneficial as mergers and acquisitions can be for Colorado companies, the moves may not always be well received by consumers. Recently, a proposed merger between Denver cab companies in the state came under fire.

The potential merger between Yellow Cab and Metro Taxi is being widely discussed. The companies say that the merger will allow them to grow and provide better services to more residents in Colorado, but critics argue that the move would give one company far too much control on the industry and would negatively affect competition.

If the Colorado Public Utilities Commission approves the merger, that one resulting company would then control about 60 percent of taxi permits across Denver. In an industry where there are only a few big players already, this move could wind up causing a monopoly situation where one company controls an unfair portion of the market and can therefore have unbalanced effect on costs to consumers.

But the cab companies say that the merger would simply give them a bigger fleet of taxis which will enable them to provide better and more services to consumers.

Whether or not the deal is approved remains to be seen. However, this case highlights the challenges that can come up during a proposed acquisition or merger. Not only are there a number of complicated and complex legal considerations to worry about, but business owners must also be mindful of the effect that the move will have on consumers. For long-terms success to be achieved after this type of event, a business owner will want to be focus on each of these aspects.

Source: The Denver Post, "Denver taxi merger raises serious concerns," Aug. 16, 2013

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