ENTREPRENEUR DEFEND NEW VENTURE AS CABBIES COUNT COST OF CABTIVATE
THE businessman whose taxi TV advertising firm is in liquidation, leaving dozens of city cabbies out of pocket, today defended his latest business venture.
Mark Greenhalgh, who defied criticism on BBC2's Dragon's Den programme to launch his company, is facing a backlash from the taxi trade after being appointed director of a separate firm developing a similar entertainment system.
His Cabtivate firm went into liquidation two months ago, owing creditors a rumoured £1 million.
But earlier this year he was appointed director of a new business called Tapinto, which is recruiting Edinburgh-based sales executives for an "audio-visual TV system" for vehicles.
In the meantime, about 50 black cab drivers in Edinburgh have been left counting the cost of Cabtivate's demise, having signed up to four-year lease purchase contracts costing them £104 a month.
They are required to pay off the debt, but are no longer receiving commission for showing adverts. Most drivers have turned off their screens as the system is no longer being updated.
Angry cabbies in the Capital, in tandem with counterparts from around the UK, are now planning to set up an action group to try to get some money back.
But Mr Greenhalgh today claimed Cabtivate "was not responsible" for the firm's difficulties, although he did not say who was at fault. He also insisted Tapinto, which according to official documents is registered in Milton Keynes, has nothing to do with the city's black cab trade but will sell TV systems to saloon car owners in Europe.
"I'm restricted in what I can say, but it will all become clear after a creditors' meeting next week," he said. "I'm trying to resolve our position with the bank and there have been a number of companies that have stated an interest in buying [Cabtivate].
"I would give my time to help the new owners. Cabtivate wasn't responsible for what happened."
Cabtivate was slated by Scottish multimillionaire Duncan Bannatyne on the Dragon's Den, but despite not winning any investment, the company initially appeared to prosper.
It entered the market in Glasgow and London and netted a £500,000 deal with Strathclyde Police to screen crime appeals to passengers. But Glasgow-based liquidators Begbies Traynor revealed in January the firm had "run into cash flow difficulties".
Ken Patullo, from Begbies Traynor, today said the liquidators were "still trying to make some sort of recovery in respect of the intellectual property", but said the prospects for creditors were "slim". He added the firm would "take a look into" the arrival of Tapinto on the scene.
When taxi owners signed up for Cabtivate, they entered into a four-year contract, with a promise of earning £10,716 spread over 48 monthly payments starting at £192. In return, they had to buy the system for £3760.
The most popular finance method for cabbies was a lease purchase option, which required a payment of £104 a month. Other drivers paid cash up-front from the start. In both cases, they are no longer receiving any income, but either owe debt to finance companies or face losing money when selling the vehicle.
One senior representative in Edinburgh's black cab trade, who asked not to be named, said: "The situation is very disappointing - whatever the rights and wrongs, there are drivers out of pocket."
One Edinburgh cabbie who signed up to Cabtivate said: "I've got three years left on my deal, so I've stopped paying but it's a big personal risk because the credit companies will get involved."
A member of the taxi drivers' internet forum, Fastblack.com, said: "[Mr Greenhalgh] is sticking two fingers up to all drivers who are bound to that four-year lease of their equipment.
"I think it is pretty immoral to start an identical business with the private hire fleet."
+ News Source: edinburghnews.com
+ Link: http://edinburghnews.scotsman.com/index.cfm?id=395892007
+ Last Updated: 2007-03-15 23:18:34
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