Franklin Parmelee made deals with the railroads and hotels to transport passengers and luggage for them. And so an empire was born.

A WELL-organised livery and carriage service companies took to the streets of Chicago almost as soon as this great US city was established.

One of the earliest of these companies, Parmelee Transportation Company established in May 1853, would play a key role in the development of America’s use of the horseless carriage as inner-city taxis and serve as the foundation for the building of empires.

Franklin Parmelee established his company with a staff of 12, and a livery of six Concord stagecoaches and 30 horses. Within five short years, he dominated the streetcar, omnibus, and delivery wagon business in the city of Chicago with only Frink, Walker and Company offering serious competition.

On August 16, 1858, Parmelee secured an exclusive contract with the City of Chicago through an ordinance giving the subsidiary company, Chicago City Railway Company, a 25-year license to build and operate a horse drawn railway along State Street. The questionable legalities of the contract and conflict of interests’ resultant of jurist and attorney Judge Henry Fuller’s partnership in the endeavor, created a litany of legal issues resolved only through a direct petition to the state legislature.

Diversification and contacts with people of influence ensured Franklin Parmelee’s rise to dominance in the closing years of the 19th century. As the city of Chicago evolved as a primary rail hub, Parmelee negotiated exclusive verbal contracts with most of the major railroads and the city’s finest hotels. This resulted in a near complete monopoly of the passenger service market.

Parmelee Transportation Company shuttled passengers and their luggage, provided pick up services within the city, and even provided sightseeing services with their fees paid by hotels and railroad companies. The company’s dominance of services was so entrenched that many railroads offered Chicago bound passengers Parmelee transfer coupons when they purchased tickets and company representatives had the advantage of complimentary offices in railroad terminals.

By the dawn of the new century, the urban and corporate landscape had changed dramatically from that of the 1850s. Symbolizing these changes were the evolving face of Parmelee Transportation Company.

In 1901, a Chicago based syndicate composed of John C. Schaeffer, John J. Mitchell, President of Illinois Trust & Savings Bank, Roger B. McMullen, C.H. Randle, James B. Wilbur, President of the Royal Trust Company, and Norman B. Ream acquired the entire company with plans to modernize it with horseless carriages and to expand operations into other cities.

Before acquisition by this syndicate, Parmelee Transportation Company and its subsidiaries still dominated the cities passenger and cartage services industry. However, the handwriting was on the wall, technological advancement represented by the horseless carriage would soon challenge companies to invest tremendous amounts of capital to remain relevant, and independent operators could compete with relatively little capital outlay.

In 1897, the Electric Carriage and Wagon Company of Philadelphia built a small fleet of electric taxis that utilized the recently patented taximeter to measure a fares distance and time. In 1899, a taxi company initiated operations in Chicago with 100 electric cabs. The following year Woods Motor Vehicle Company of Chicago organized for the manufacture of electric vehicles including delivery wagons and hansom cabs operated through a subsidiary company.

Sensing opportunity for profit in this new market, New York City financier William Collin Whitney bought out the Electric Vehicle Company owned by Isaac Rice in 1899. Whitney then initiated merger talks with Pope Manufacturing Company of Hartford, Connecticut, a pioneering automobile manufacturer, with plans to produce 2000 electric taxicabs.

The taxicabs initially produced were sold to taxi companies in Chicago and New York City under the Columbia name. The exorbitant sales price coupled with a complex series of mergers and corporate restructuring ended production in mid-1900.

Another manufacturer that hoped to profit from the burgeoning taxi business was Autocar, a company that later became synonymous for the manufacture of durable heavy-duty trucks. However, their venture into the manufacture of gasoline powered taxicabs was brief and in 1907 after the production of about a dozen vehicles, the company abandoned the endeavor in the face of stiff competition.

Another pioneer in the move from electric taxis to petrol-powered models was Harry A. Knox. In 1905, through a complicated series of financial and legal manouevres, Knox founded Knox Motor Truck Company after losing control of the Knox Automobile Company that he had established in Springfield, Massachusetts.

Use of the Knox name for the new endeavor resulted in a lawsuit from the owners of Knox Automobile Company. In turn, this necessitated development of a limited partnership with the Sunset Automobile Company of San Francisco, California. Utilization of that companies patented two-cycle engine allowed Knox to commence production of a delivery van and a taxi marketed under the Atlas name in 1907.

As manufacturers large and small battled for a portion of the finite taxi market, the syndicate that controlled Parmelee Company moved quickly to counter the threat represented by the increasing number of taxis operating on the streets of the Chicago metropolitan area.

Special to the New York Times - CHICAGO, November 12, 1901 – Electricity will supplant the omnibus horse in the conveyance of persons to and from the railway stations and the hotels. Such is the belief following the announcement that a syndicate has been formed for the purchase and takeover of the property and business of the Frank Parmelee Company, which does almost all of the transfer business.

In spite of the Parmelee Company’s forward thinking leadership, initially vision pertaining to the long-range potential in the burgeoning taxi industry utilizing automobiles was largely myopic, as was an understanding about the changing nature of competition.

However, visionary entrepreneurs such as Charles A. Coey were quick to grasp that potential. In 1902, Coey established an automobile “livery” service and the cities first parking garage for automobiles. In 1907, John Daniel Hertz Snr moved from selling pre-owned cars to leasing them as cabs. This would become the cornerstone for Hertz’s rental car empire.

Within the first five years of the 20th century, there were seven taxicab companies established in Chicago that operated more than 100 vehicles. There were also a countless number of independent operators, many of whom were simply purchasing used cars for their endeavors.

In San Francisco, by 1904, independent taxi operators all competing for an extremely limited market overran the city. In New York City, estimates are that there were more than five hundred automotive taxis on the streets in that year. In 1908, the New York Taxicab Company imported sixty-five red and green De Dion-Bouton cars from France. This made their fleet one of the largest in the city. Within two years, this pioneering company was operating seven hundred taxis.

In Detroit and Cleveland, St. Louis, and New Orleans the taxi industry was providing a previously cost prohibitive service for the middle class. And it also was creating an unprecedented opportunity for the creation of independent business enterprise.

In Chicago, the wildcatting atmosphere that was the taxi industry changed dramatically in May 1908 when Charles A. McCulloch took the historic Parmelee Company in a new direction with the establishment of the Parmelee Taxicab Company. Funded with an initial issue of $250,000 in capital stock, the new endeavor garnered a great deal of interest from investors.

As an interesting historical side note, Parmelee, as with many companies, was embracing the future even though they still had one foot in the stirrup. A company inventory from 1910 states that the parent company still maintained a 250-horse stable and operated eighty horse drawn omnibuses in Chicago.

Surprisingly Parmelee was not the only company that initially overlooked the potential in the taxicab business utilising automobiles. Even though the number of American automobile manufactures soared into the hundreds by 1910, a scant few gave this niche market a second thought. As a result, taxi companies and operators turned toward European manufactures that had pioneered the building of vehicles for taxi specific usage.

A few American companies, however, utilized the dramatically increasing demand for taxis and the lack of suitable vehicles as the hinge pin for development that could make the difference between insolvency and profitability. A rare few hoped to profit from the manufacture of taxis alone. One of these was the Connecticut Cab Company organized in Bristol, Connecticut by Albert Rockwell, Charles Treadway, Ira Newcomb, and T.H. Holdsworth for the production of the purpose-built Rockwell taxi.

Designed by the Bristol Engineering Company, initial production done under limited license to New Departure Manufacturing Company resulted in an automobile that won critical acclaim. In spite of the staggering $3000 price tag, the four-cylinder Rockwell landaulet taxicab proved popular with taxi operators in New York City, and within one year, more than two hundred were in service.

A Russian immigrant built an empire on the niche market taxi industry. Morris Markin, was the founder of Checker, a company that would gain control of Parmelee and dominate the taxi business in several major cities by the 1930s.

Written by Jim Hinckley of jimhinckleysamerica