INDUSTRY IN REVIEW

By Don McCurdy

A mile high embarrassment.

It what seems to be a bizarre case of government regulations gone awry, the case of Mile High Cab in Colorado just won’t go away. The last gasp of hope the Mile High wannabe Cab company has is the Colorado Supreme Court. The story has been going on well over a year and Mile High has had to fight the resources of the state government the entire way. Like any good drama, the rub is in the “interpretation” of the law. Get the right judge and its okay for the government to restrict Mile High’s entry into the market despite what the actual intent of the law was when it was passed. Apparently, we just can’t get enough “good government.”

In theory.

The Portland Oregon City Council recently voted to allow a coop taxicab company 50 permits. In the change, city also enacted an anti kickback rule to prevent hotel doormen from extorting “tips” from taxicab drivers. Hmm, where have I heard that before? Houston has a similar statute, less of a fine though, but graft continues on a grand scale. The doormen simply get a little more clever about how they go about getting the tip and law enforcement “doesn’t have the resources” to correct the problem. When it’s not costing the city it really doesn’t matter.

How do you feel about that?

Taxicab driver Peter Francois “feels” that hotels in Naples, Florida should be compelled to allow him to park on their property. He’s upset that companies contract with one local company to provide service to their facility. While the hotels are public places, they are on private property. Should a property owner be compelled to allow taxicabs to sit on their property? After all, if it hurts Pete’s feelings it should probably be banned. This argument has been had before with the result coming down on both sides of the fence. The question would appear to be how much control should government have over private property? Beyond safety of the general public, I don’t see a compelling need to regulate the property of a private owner.

Tradition?

Hailo is here! What? Hailo, a mobile phone app that calls a licensed cab, has debuted here in the US in Chicago. I had to laugh when the announcement lauded Chicago as a city with “a tradition of being a prime mover of people.” Really? Were they first with computerized dispatch? Well, no. Did they pioneer GPS dispatch? Well, no. While Chicago is certainly a large market it is also somewhat chaotic. Hailo may very well help organize the independents into some sort of dispatch system and could help the industry in Chicago serve those under served neighborhoods. From a driver’s standpoint, if you get a Hailo trip you at least know the caller owns a smart phone.

Cost cutting?

Mae West is reported to have said “the only thing worse than people talking about you is people not talking about you.” I don’t know about all that, but Uber is in the news coast to coast.

In New York City Uber is being accused of price gouging while in Los Angeles the article calls it a “hot new cost cutting car service.” The article in New York City says the company is going back to the regular fare structure despite the increased cost to attract drivers while the article in Los Angeles said Uber had discontinued service in New York. Articles in DC report that Uber is cheaper than taxicabs on some trips, while articles out of Chicago report Uber to be the devil with regard to local and state laws. So, there’s no doubt that Uber has created a lot of chatter, but with that comes attention.

DC regulators may have been bullied into capitulation, but there are stiffer backbones in the regulatory world. All in all a very entertaining startup with reasonably good market penetration in a variety of cities. Pretty impressive so far, but clouds loom as regulators coast to coast figure out how to handle this technology. Meanwhile, the drama continues.

Speaking of drama.

Hailo, a British based smart phone ap provider, is creating quite a stir in Toronto. Reports are that Beck Taxi management is up in arms about their drivers using the smart phone ap to generate more business. While I can see their concerns, either their drivers are independent contractors or they are not. If they are it would be a major breech of independent contractor status to prevent drivers from developing other sources of revenue.

I have personally witnessed several attempts by taxicab company management to manipulate the rules for their benefit when they felt challenged by technological advancements or other situations they viewed as potentially hazardous to their income. One of the main things taxicab companies have to sell is their reputation. If Beck Taxi thinks their reputation is so fragile that it needs to bully its drivers into submission, I would have to wonder why. Beck has been a solid company for decades and has a good following in Toronto. Were I them I would be looking for ways to improve my technology to prevent my customers from wanting to find an easier, softer way to call a taxi.

Which way does the wind blow?

Taxi drivers through membership in driver’s associations, unions and assorted assemblages for this or that over the years, have demanded employee status in some instances while others have sought access to markets without having to pay homage to the permit holding taxi barons. If drivers across the country could agree there would probably be enough of a driver base to effect change, but drivers don’t agree.

In a past life management experience at a taxicab company I was approached by numerous drivers complaining of self appointed taxicab driver spokesmen claiming positions the drivers weren’t interested in supporting. So what do the drivers want? Depends on who you ask.

In Milwaukee, Wisconsin three drivers are reported to be suing the city over the limit set on permits back in 1992. The drivers claim, and probably rightly so, that the city’s limit on the number of permits costs them extra when they are forced to lease a cab from a permit holder. A situation I have often referred to as the taxi tax. Drivers claim to take in about the same amount in net profit as the permit costs to rent. So which is it? Maybe we do need a weatherman.

Looking over the edge.

LTI, the company that makes the London Black Cab, is in administration. Which, I think, means bankruptcy in the British version of English. A variety of issues have plagued the company, not the least of which is increased competition. There are certainly other vehicles that can be used as taxicabs, but not that many that are designed as taxicabs and wheelchair accessible. I’m sure the London cab drivers will miss their black cabs as much as US drivers missed the Checker Marathon. Well, at least I did.



If you have any comments regarding this or any of my articles please feel free to contact me at dmc@mcacres.com. —dmc