Windfall for cabbies

Thousands of London cabbies are in line for windfalls worth nearly £5,000 after Radio Taxis set out on the road to demutualisation today.

Each of the company's 2,500 black cab drivers will receive a payout of £1,100 plus 1,000 shares if they back a deal to change the status of Radio Taxis to a private company.

The conversion involves US entrepreneur Brian McBride taking a 26% stake in the business, with the remaining shares spread between drivers and staff.

Chairman Geoffrey Riesel said an internal market will be set up for share trading to prevent the company attracting outside takeover offers.

"Currently, when our members retire from the circuit they get nothing," Mr Riesel said.

"But the deal means they will now be able to build up a valuable nest egg as a result of their shareholding."

Radio Taxis, which was established more than 50 years ago, is the second largest taxi operator in London behind ComCab, which also includes DataCab and Call-a-Cab.

The deal will raise more than £10 million to enable it to expand beyond black cabs into other forms of personal transport such as chauffeur driven cars, couriers and shuttle buses.

Managers are also planning to improve key technology that supports internal billing and management information systems.

For the change of status to take place, at least 75% of drivers must offer their support in a ballot at the first of two extraordinary general meetings planned for May 16.

Mr McBride, head of the Yellow Cab Company in the US city of Cleveland, will invest £2 million in equity and £1.5 million in loan reserves under the terms of the deal.

He said: "I have always been particularly impressed with the commitment of the management team, the technology employed by the business and the sheer quality of the drivers."