San Francisco’s Yellow Cab Co-Op, which has about 530 medallion holders, has told shareholders it plans to file for bankruptcy.

In a December letter to shareholders, Yellow Cab Co-Op President Pamela Martinez wrote, "We are in the midst of serious financial setbacks, some of which are due to business challenges beyond our control and others of our own making." "Today we are faced with fiscal obligations that far exceed expected income," she said.

Martinez said the company would continue operations while it attempts to restructure its finances.

Yellow Cab has seen ride-hail newcomers Uber and Lyft cut sharply into its business.

The fact that companies like Uber and Lyft are able to offer more flexible hours and significant bonuses has made it more difficult for traditional cab companies to retain experienced drivers with demonstrated defensive driving skills.

Some in the global taxi business are concerned that the Yellow Cab Co-Op troubles are the tip of the iceberg as it relates to future financial problems for the industry. Many individual taxi companies have begun to lobby for legislation to protect themselves against companies such as Uber and Lyft.

Ride-hail leader Uber is now valued at more than $60 billion dollars and is well positioned to lobby at both the state and federal levels.

In her letter to shareholders, Martinez went on to write, “The big question on everyone’s mind, I expect, is when we will return to paying dividends?”

The answer, she wrote, is “Certainly not this month, and I cannot make any promises as to when.” In order to be able to do so," she said, "Yellow needs to net more drivers. We must get more shifts and more drivers paying them. This is our principal source of income.”

Jim Gillespie, former president of Yellow Cab, confirmed the co-op would file for bankruptcy soon, but did not give a specific date. Gillespie said business would continue as usual for cabbies.

“In reality, we have the best color scheme there is in the world, we’ve got a lot of loyal customers, we still get a high volume of calls to our color scheme on a daily basis,” he said.

Financially, he said several major lawsuit losses had a crippling effect on the company.

“It was a combination of the number of claims but also the high awards and high settlements that got to us well over a million dollars in a couple cases,” he said.

Kate Toran, head of taxi services at the San Francisco Municipal Transportation Agency (SFMTA), which regulates cabs in San Francisco, said Yellow Cab’s bankruptcy is a Chapter 11, which is a restructuring to shed debts — not necessarily to close.

“Overall, there’s still a demand for taxi service in San Francisco,” said Toran.

If a taxi company were to close, Toran said one concern for the SFMTA would be ensuring taxi medallion holders transfer those medallions elsewhere. A medallion is a license to operate for a cab driver, some of which are sold by the SFMTA to cabbies for $250,000.

“The main concern is making sure those medallion holders are placed at other companies,” said Toran.

She said preserving drivers’ records to an entity where they could be accessed would be another priority, after a taxi company closes. Among these records would be waybills, which are taxi drivers’ work history often used when trying to purchase or transfer a medallion.

“In my perspective, another thing the industry should do is stop being fragmented, shifting from each company focusing on its self-interest to the taxi industry as a whole,” she added.