Buyer aims to use ride-share to fuel Mears

Mears Transportation, Central Florida’s oldest taxi company and one of the largest in the Southeast, announced Monday that a South Florida company has purchased majority ownership of the firm with ambitious plans to merge Mears’ traditional service with ride-share business tactics.

“In the near future we will be the first and only full-service transportation company in the country that can meet all the ground transportation needs of a customer, including demand response rideshare services,” said Charles Carns, chief executive officer, in a memo Monday to Mears’ more than 1,000 employees.

Mears spokesman Roger Chapin declined to specify what the new investor, Palm Beach

Capital, paid for an ownership stake. Nor would he disclose how Mears in coming months would merge the company’s operations to take on ride-share competitors.

“Mears has an app, but it’s nowhere nearly as robust as the app that Uber and Lyft invested hundreds of millions of dollars in,” Chapin said.

“Part of this investment is to create a more robust app and do the marketing that will test it and cut our teeth on it here in Central Florida and hopefully move it into other markets,” he added.

The investment deal closed late Thursday, days after Mears had revised its concession contract with Orlando International Airport to acknowledge the change in ownership.

“Mears recognizes the competitive advantages that ride-share companies have in using technology, and they have brought in capital and technology that will allow them to compete,” airport director Phil Brown said.

Documents indicate that Mears will retain 10 percent ownership, and that one member of the family will remain on the company board.

Mears’ administrative and fleet facilities are in central Orlando, managing more than 1,200 vehicles. Until the recent arrival of outside investors, the company had been owned entirely by the Mears family.

“The Mears are giants in the transportation business,” said Louis Minardi, owner of The Yellow Cab Co. in Tampa and president of the Florida Taxicab Association. “But I understand the market is changing, and it would be great if they [new owners] can get a new model, a hybrid, going.”

Carns said in a letter to the Greater Orlando Aviation Authority last month that Palm Beach Capital would obtain 48 percent ownership. Founded in 2001, Palm Beach Capital bills itself as partnering in “middle market buyouts” with investments so far in more than 40 companies.

Along with the Palm Beach Capital investment, a previous Mears suitor, TriArtisan Capital Investors, would have 32 percent ownership, and the Mears family would retain a 10 percent stake, Carns said in the letter.

“There is no intent to change how we serve existing customers,” Carns said of Palm Beach Capital’s arrival. “They are simply investors who believe in our current operation and are looking for an efficient way to enter the rideshare business model.”

Carns said he will remain in his position and that the management team would stay largely intact, although several Mears family members would transition out of their executive positions and board seats.

Paul Mears III, grandson of founder Paul Mears, would stay on the board.

In a November letter to the airport, Carns then spelled out the pending arrival of TriArtisan Capital and other investors in a restructuring of the company that would leave Mears still owning 40 percent of the business.

“We intend to add a rideshare service to our business offerings and we are confident we have the business model that will be successful,” Carns said.

“The cost to launch a rideshare service that competes head to head with the established rideshare companies is quite high,” Carns said. “For lasting success, our service needs to spread across the country to the largest metropolitan markets.”

Central Florida’s taxi experience changed markedly last year when the airport, adhering to new state law, began to allow ride-share companies to pick up passengers. Previously under airport rules, Lyft and Uber drivers were allowed only to drop off passengers.

Orlando Mayor Buddy Dyer, a member of the airport authority, said that “Mears is one of our longerrunning, home-grown businesses, and they’ve been very philanthropic.”

Asked to comment on Mears’ plans to compete with ride-share companies, Dyer said, “I don’t think any of us five years ago saw the change coming in taxicab services.”

“I think the next five years in the transportation industry is going to be extremely interesting,” he said. “We are all talking about autonomous vehicles and what that’s going to mean.”

The company and individual Mears family members have left their mark on the Orlando region with a variety of philanthropic works.

They were recognized nationally in 2013 as a top donor to Valencia College. Lobby space at the Arnold Palmer Hospital for Children was renamed for the Mears family in 2015, a result of donations.

Since 1988, Mears has provided free transportation to theme parks for families at Give Kids The World Village in Kissimmee, a resort for children with critical illnesses.

Pam Landwirth, Give Kids the World president and CEO, said an estimated 20 percent of nearly 160,000 families hosted at the village were provided van and bus rides by Mears.

“This is truly a cost that they have had to absorb because they have to pay for the drivers, pay for the gas and the wear and tear on the buses,” Landwirth said of Mears.

Chapin said the extent of charitable works by the restructured Mears Transportation is yet to be determined.

“Our community presence will continue,” he said.

Asked about a $50 million lawsuit filed last year by Mears luxury chauffeurs for lost compensation, Chapin said the litigation was settled last month for $3.1 million.

The “timing was unrelated” in the arrival of new investors and the settlement, he said.