Recent innovations have given birth to an industry that combines an old service with new technology. Ride sharing allows people to use their own vehicles to earn money providing rides for others by way of a Smartphone app. While ride-sharing companies are wildly successful, it seems that progress may not be good for everyone. Traditional cab companies in Maryland are finding themselves in need of financial reorganization.
Barwood, Inc. and the taxi companies associated with it are struggling to compete against ride-sharing companies like Uber and Lyft. In fact, Barwood filed for Chapter 11 bankruptcy for the second time in eight years. This time, the company’s owner blamed the fact that, while traditional taxi companies are heavily regulated, ride-sharing drivers are held to few standards, most notably the requirement for drivers to hold Personal Vehicle Licenses. Without the license requirement, ride-share drivers can charge less.
In its 2007 bankruptcy, Barwood reorganized and was able to stabilize its business. The company owner expects to do the same this time while figuring out how to remain viable in the world of ride-sharing. Currently, the company claims to have $4.5 million in assets while owing $5.4 million.
Chapter 11 bankruptcy is an option used for business reorganization in the face of financial struggles. It offers companies a chance to continue doing business while protected from creditors, allowing time to restructure the assets and liabilities according to a court-approved plan. Any business owner in Maryland who finds that his or her company is unable to pay its creditors can obtain assistance by contacting an experienced bankruptcy lawyer to determine the best options for the company.
Source: bethesdamagazine.com, “Barwood Taxi Company Files for Bankruptcy”, Andrew Metcalf, Dec. 21, 2016