The sale of Yellow Cab’s cars and licenses is set for Tuesday, lending hope that a new owner may have private cabs back on the road fairly soon.

The taxi company shut down suddenly on the morning of July 26, idling its cars and leaving many regular riders searching for alternate transportation. Joe Boyd, primary owner of Royal Coach Enterprises, said Saturday that it was a combination of gas prices, rising insurance rates and lower payments from the state-appointed Medicaid travel reimbursement broker that brought the company down.

“All them combined, there just wasn’t no way we could operate - no way whatsoever,” he said.

The company was laboring under debt when Boyd and his relatives bought it three years ago. Then their office on Old Louisville Road burned down.

“We just never could see light,” he said.

Another week of business would have put them $25,000 or $30,000 further in debt, Boyd said.

“We just couldn’t do it,” he said.

Mary Cohron, CEO of Citizens First Bank, said Boyd surprised her by showing up at the bank shortly before closing the cab company and turning over the business’ assets, including its cars and state-issued licenses to run a taxi service. Now those are up for grabs, and she said at least eight firms have contacted the bank or the auctioneer to ask about them.

At 2 p.m. Tuesday, auctioneer Ron Kirby Jr. will sell the state licenses to operate 50 cabs in Bowling Green and suburbs; taxi trips starting in Woodburn and Smiths Grove and Simpson, Edmonson and Metcalfe counties; carrying the disabled from Warren and Barren counties; and run intrastate buses.

The sale will be on the second floor of the Citizens First Bank Building, 1065 Ashley St.

At 5:30 p.m. the same day, Yellow Cab’s 42 vehicles, shop equipment and office furniture will be up for bid at Kirby Auto Auction, 370 Trotters Lane, Franklin.

Boyd said he hated to shut down; his father started working for Yellow Cab in 1964, and he followed in 1987. They thought of many daily riders as family, he said. Now he’s not sure what to do next. Boyd said both he and his wife are job-hunting.

Much of Yellow Cab’s regular business came from taking Medicaid patients to doctors, and being reimbursed for those rides through a state-funded nonprofit broker. The agency handling reimbursement was Somerset-based LKLP, but that changed July 1. The new broker is Green River Intra-County Transit System, a subsidiary of Owensboro-based Audubon Area Community Services.

When GRITS took over, the amount Yellow Cab received in compensation for taking Medicaid patients to doctor appointments dropped by half, Boyd said. The last check he received from LKLP was $20,000 less than usual; that firm told him the state’s payment to them was late, Boyd said. GRITS was also supposed to give him a check July 15 - but that was late too, also blamed on a late state payment to the brokers, he said.

“There just wasn’t no way we could stay in business,” Boyd said.

Audubon and GRITS representatives have suggested that LKLP was overestimating what the cab company should have been paid for its rides, but Boyd said he thinks LKLP had it right. That agency has not been reached for comment.

When Yellow Cab shut down on a Saturday morning, GRITS hurried to hire Boyd’s former drivers and buy new vehicles to keep up with Medicaid patients’ needs, but Dan Lanham, GRITS transit system manager, admitted that was an impossible task for the first few days.

The GRITS office on State Street now has 15 small vans parked outside, one 15-passenger van and one small public-transit bus, all white and bearing the red-and-blue GRITS logo.

Darnell Kelly, down from the Owensboro office Saturday to clean the vehicles, said that if any more are needed to meet a momentary surge in demand, they’ll probably be brought from the Owensboro fleet rather than being stationed here permanently.

GRITS is not a private on-call cab service, Lanham said; it deals only with non-emergency medical trips. But Yellow Cab relied on Medicaid reimbursement for much of its steady income, and officials from GRITS, its parent agency and the state acknowledged that the way that mileage was calculated changed - to the state-approved method - when GRITS took over.

Since Yellow Cab went out of business, the actual mileage rate has gone up from $1.30 per mile to $1.50 per mile, while the previous $85 reimbursement cap on one-way trips increased to $150, according to Chuck Wolfe, spokesman for the Kentucky Transportation Cabinet.

Some of Yellow Cab’s employees quickly found jobs with GRITS, but several say that they’re still owed money by the Boyds. One such, David Wiltshire, said Yellow Cab workers got their last checks July 25. He immediately went to the company’s bank and cashed his check, but others who waited to deposit them in their own accounts saw their paychecks bounce. Those checks, even if valid, still didn’t cover employees’ final two days of work, he said.

Wiltshire said the Boyd family had always treated Yellow Cab employees well and fairly before; rather than being angry, he’s disappointed - and wants to know what happened.

“I think they owe an explanation to the community,” he said. If Boyd doesn’t have the money to pay employees, either for their last pay period or their final two days of work, he could at least acknowledge that and say they’ll be paid eventually, Wiltshire said.

Boyd acknowledged that there was a pay problem, but said his attorney had asked him not to discuss it. All he would say is that it wasn’t entirely his decision.

About 10 former Yellow Cab employees were hired by GRITS in its scramble to fill in for the cab company’s Medicaid passengers, and that’s the bright spot out of the experience, Wiltshire said.

“It worked out for me and a bunch of drivers,” he said. “It’s a better deal with better benefits.”

Wiltshire said GRITS’ four vehicles did cut into the cab company’s Medicaid business somewhat, well before Yellow Cab closed. Boyd said that regular clients told him they had called GRITS and requested rides from Yellow Cab, but were told they’d take a ride from whoever GRITS sent.

The cab company’s closing has left more than Medicaid patients and former drivers in a tight spot.

“I worry about my patrons every night,” said Lisa Tracy, owner of Three Brothers bar on Main Avenue.

It’s hard to judge the full impact since business is now slow anyway, with the absence of most Western Kentucky University students, but Three Brothers’ traffic is definitely down, she said. Some people who would normally stay all evening are now leaving after one or two drinks, but Tracy often has to arrange rides for others. It’s her legal obligation to make sure they’re sober enough to drive, or have a ride waiting, she said.

“This just makes every moment of my being open nerve-wracking,” Tracy said.

She relied on Yellow Cab to get home herself, but can no longer call a cab at closing time. Only one local bar - the Brewing Company - runs its own “drunk bus” for patrons, Tracy said, but she’s considering getting one of her own - before getting a personal car, since she relies on the bar to support her family.

She hopes a new owner can start up soon after buying the cars and licenses Tuesday, but doesn’t see how she and other local business owners can make it much beyond that without a cab service. In even worse need are individuals who relied on taxi rides to get to the doctor or work, Tracy said.

“It doesn’t seem essential to people who don’t rely on it for their livelihood or their life,” she said.

For her bar patrons, and customers of other establishments - not to mention private parties that start when Western is back in session - she sees only trouble: DUIs and accidents.

“I just hope it doesn’t get fatal before someone steps up and says, ‘This is an essential part of our town,’ ” Tracy said.