Why does every city seem to have a Yellow Cab company?

Illustration by Slug Signorino

Cecil replies:

Cecil replies:

It does seem a little suspicious, especially when you consider that at one point there were 1,300 North American cities or towns with Yellow Cabs. We owe it all to one John Hertz, a Chicago entrepreneur whose name is most commonly associated today with rental cars. An Austrian immigrant, Hertz spent his early years engaged in such Horatio Alger-type occupations as hawking newspapers and driving delivery wagons, all the while looking out for the Main Chance. He found it in 1905 in the person of Walden W. Shaw, a wealthy young gentleman who needed a partner to help save his foundering auto dealership. Hertz served admirably in this role, and restored the company to prosperity–so much so that Hertz and Shaw soond found themselves with a surplus of traded-in cars. Hertz hit on the idea of using them to establish a taxicab service, like those already in operation in New York. He decided that the secret to success in the cab biz was high visibility, so he commissioned a local university to “scientifically ascertain which color would stand out strongest at a distance,” as his biographer notes. Yellow, needless to say, won, and thus was born what eventually became the Chicago Yellow Cab Company. After enduring the usual travails, Hertz succeeded in building the company up into the largest of its kind in the world, operating some 2,000 cabs.

After a few years, Hertz decided that the vehicles then generally available were not durable enough for efficient taxi service, so he designed his own, the first of which began operating on Chicago streets in 1915. The Model J, as it was called, proved extremely successful and gained nationwide recognition. Orders from around the country began pouring in to the Yellow Cab Manufacturing Company, a Hertz subsidiary also located in Chicago. Hertz shrewdly decided that he would not simply sell Yellow Cabs but rather Yellow Cab franchises, complete with what he believed to be his guaranteed success formula. The Hertz system proved to be quite successful indeed–supposedly less than 1 percent of the franchises failed. Ultimately the various Yellow Cab companies (which were independently owned, for the most part) came to dominate the nation’s taxi business so completely that “Yellow” and “taxi” became virtually synonymous. Hertz, for his part, was widely known as “America’s taxi king.”

Over the years Hertz expanded into such fields as bus manufacturing and auto rentals. In 1925, having made his pile, he sold controlling interest in many of his companies, including what was by then known as the Yellow Truck and Coach manufacturing Company, to General Motors. GM merged Yellow Truck with its own truck division and moved the plant to Michigan.

Although Hertz’s original franchises seem to have been set up more or less on the square, the subsequent history of American cab-company operation is filled with tales of graft and corruption, the leading examples of which, as one might expect, are provided by the Chicago taxi companies, Yellow among them. In the 40s the Justice Department tried, with mixed success, to break up a cartel that controlled all or most of the taxis in Chicago, Minneapolis, and Pittsburgh, as well as a substantial number of those in New York. Even today Chicago’s Yellow and Checker cab companies are linked by a murky arrangement of interlocking directorships and mutual stock ownership, and periodically there have been scandals involving such things as approval of fare increases by the City Council. It was on such unshakable foundations as this that Chicago built its reputation as sleaze capital of the universe.

Cecil Adams

Send questions to Cecil via cecil@straightdope.com.