Breana Noble | Collegian
Despite looking into expanding to Coldwater and other nearby rural communities just weeks ago, Hillsdale’s only taxi service could permanently shift into park next month.
Having expanded in one year to a full-service taxi company, Call and Go Now is seeing its insurance more than double. Automotive insurance premiums in Michigan stay high because of the high risk associated with public transportation and Michigan’s no-fault policy, which causes fewer companies to enter the market, said Tracey Moore, an agent at Barrett Insurance in Jonesville, Michigan.
Charles “Chopper” Ferguson, owner of Call and Go Now, said he is expecting to keep his business running until March 20, the day before Michigan’s Limousine, Taxicab, and Transportation Network Company Act, signed into law in December, goes into effect. That is, unless he can find the money to pay for his insurance that is increasing from less than $700 per month to more than $1,600.
“I’ve been drug by a horse caught up in a stir,” an emotional Ferguson told the Hillsdale City Council at a meeting on Feb. 16. “I beat 11 heart attacks… Nothing has ever affected me like this.”
The act requires taxis as well as limos and transportation network companies like Uber and Lyft to register with the state of Michigan’s Department of Licensing and Regulatory Affairs. Previously, ride-sharing businesses and taxis registered at the local level, creating different regulations in each community, and the act aims to make those rules uniform, said state Rep. Eric Leutheuser, R-Hillsdale.
“The emergence of TNCs made it obvious that we needed some type of structure in the state, so they wouldn’t have to go in and out of a patchwork of regulations,” Leutheuser said.
The new law also mandates taxi companies to have $300,000 worth in liability insurance in case of injuries or property damage.
Ferguson’s company is registered with the city of Hillsdale, which he said has been supportive of his effort and required $1 million liability insurance. Despite the decrease in the liability amount, his insurance costs have skyrocketed because his business has grown, Moore said.
“He was the only driver,” she said. “He had only one vehicle. This year, his whole circumstance has changed. He wanted to expand to a full taxi service. That changes the bottom line.”
Now, Ferguson has two employees driving for him and two vehicles in operation — a 2011 Dodge van and Kia Forte.
Moore said public transportation is a high-risk business, and many refuse to offer the insurance for it, especially in Michigan, which has the highest insurance rates in the country. That is because of its no-fault policy, which requires insurance companies to provide lifetime medical coverage in the case of an accident.
“He’s a people hauler,” Moore said. “Your insurance rates are astronomical.”
No-fault also complicates insurance business’ entrances into Michigan, Leutheuser said. Only surplus lines insurers offer coverage of public transportation in the state, but since they offer all types of insurances, the premiums are high, Moore said. No niche market insurers, which typically offer lower premiums, that cover taxis have registered with the state, she added.
That has left Ferguson stuck, he said. Although he said he is looking into ways to raise the money to cover his insurance, perhaps through advertising and increasing rates, Ferguson said he is hopeful, yet uncertain, that he can find a way to save his business before the March deadline.
Ferguson has spoken to members of city council and Leutheuser about his situation, who are looking into it.
“He is doing a service that is a need in this community,” Leutheuser said. “He seems to be a big-hearted guy who is not in it for the money.”
Councilman William Morrisey said Call and Go Now provides a valuable service to the community, especially when the city-funded Dial-A-Ride runs only within city limits and during business hours. Morrisey himself has used the taxi service twice.
“They got me to my destination on time, and they did so at a very reasonable cost,” he said in an email.
Ferguson said he thought he had found his niche by providing public transportation to rural cities, and that he has enjoyed meeting many community members through his business. From driving 30 people to work every day, to picking up seniors for doctor’s appointments for the Department of Health and Human Services, to taking college students to the airport before break, Call and Go Now has provided transportation to those who need it — without turning away a customer, Ferguson said.
“I should’ve started charging more sooner, but we’re not here to rip people off,” he said.
