INDUSTRY IN REVIEW

By Don McCurdy

Pretty much the same old story.

It seems that every time a taxing authority, in this case the city of New York, wants to collect a new tax they find someone else to collect it for them. In this case, the wheelchair accessible “surcharge” will be “collected” by the taxicab driver on each fare. I would argue that it is more likely the driver will pay the surcharge rather than collect it.

Let’s take a hypothetical trip for $12 that I take every morning. Some mornings I pay a little more, some a little less, depending on traffic. Each morning I give the driver $15 regardless and feel like a good tipper. Now, add 30 cents to the meter and what do I do? Nuts to you mister cab driver because I’m not going to carry around change to accommodate your “surcharge.”

Now it all sounds real good, helping the drivers service the handicapped community and all, but the practical reality is somewhat less. I’ve tried to collect “surcharges” before and it was always the same, it came out of the tip. Don’t nickel and dime us to death, raise it to a dollar and give the driver half. That’s more likely to actually even out for the driver than pretending that everyone is just going to up the extra.

How much is all that paper worth?

A couple of stories out of the Denver post raise the question of exactly how much are the Denver Yellow Cab permits worth exactly? The Public Utility Commission (PUC) is reported to have fined the company 1.9 million dollars for various “violations” committed mostly by Yellow’s independent contractor drivers. Now there is a prompt pay discount, but still, that’s a lot of cash. Put that with the new rules on the way for Transportation Network Companies (TNC’s) and it makes you wonder why Yellow doesn’t simply become a TNC themselves?

Who wants to have a taxicab company and have to put up with all those regulations? Nobody is talking about how many hours TNC drivers work or even if their drivers are required to have a commercial insurance policy that covers passenger the same way a taxicab company is required to. So, if it quacks like a duck, walks like a duck and flies like a duck, it’s not a duck, it’s a TNC.

It would appear that in many jurisdictions the regulatory house of cards is getting blown over. Why would I want to own a taxicab company and be subject to all rules and regulations when I can be a TNC, not even have a call center in the cities I serve and no limits on the number of vehicles I have? It doesn’t look like we’re going to make it to Johnny Cab after all.

Think of it as an opportunity.

Once again the city of Charlotte is considering how to deal with taxicabs at the airport. Gee guys, what’s the question? If a taxicab is licensed to operate in the city it can work the airport, how hard is that? Is it just me or is it stupid to have a cab deadhead back to town to work if the airport is moving? Why is there even a contract to hash out? What is a contract negotiation but just another opportunity for corruption?

How many times have we seen this? Off the top of my head we’ve had DC, NYC, Philadelphia, New Orleans and how many others? While some were prosecuted others were just obvious, political favors, contributions, unexplained new rules and regulations.

The taxicab industry is a microcosm of our society as a whole. As “law enforcement” gets more selective we see companies and groups being attacked by those in power to prevent the free exchange of ideas. At the same time we are subjected to daily doses of what we “should” think and what our children should learn. So, as you hear about each new law or rule or edict just consider them all an opportunity to increase the corruption perpetrated by those elected and selected to enforce them.

What does it all mean?

Without a doubt the biggest story in the ground transportation business in the last couple of years has been Uber and its remora coconspirators SideCar and Lyft. I have to admit, I’m rather impressed with their market penetration into an industry that is, in my opinion, over regulated.

While I believe the “ride sharing” companies to be a total farce, Uber’s model appears quite popular with everyone except taxicab company owners. Who knew? I’ll let smarter minds than mine make the determination how an on demand service isn’t a taxicab and stick to why it is that Uber is so popular.

Well, for starters, they are billed as an “upscale” company. If you’re paying around what a taxicab costs, under normal conditions, and getting an “upscale” service what’s not to like? Second, Uber has somehow managed to skirt the rules or just get the rules changed to accommodate them in a variety of jurisdictions. Their progress has been surprising to me and I’m sure a huge chunk of the taxicab industry.

During my time in the industry in Austin, the city and the industry took huge umbrage at our company charging the limo minimum in half hour increments. Now the city is trying to figure out ways to accommodate Uber and other “Transportation Network Companies.” What a turn around.

Third, from the driver’s perspective there are no more grocery runs, taxicab inspectors trying to flag them down in thug wear, or fare jumpers. Gee, throw out the fare jumpers and robbers and the job might be safe. As Uber expands out into smaller cities and towns the face of the ground transportation industry is changing. Drivers will now have a choice of who they drive for and if they’re willing to pay ridiculous leases because it’s the only game in town. For passengers, they are now able to vote with their riding dollar for who will be the winner in the ground transportation sweepstakes.

For decades companies have been protected from competition by oligopoly style entry regulations and now that all seems to be dropping away faster than you can say TNC. Simple improvements, like paying by credit card in advance, have been rebuffed as discriminatory in the past but now are all fine as long as you’re not a taxicab company. In some jurisdictions taxicab drivers can’t even ask for a deposit in advance.

So, who do you want to drive for? I don’t know what Uber’s cut of the pie is, but half of three or four decent trips a day would make driving for Uber a pleasant experience compared to banging out grocery runs to pay a $100 a day lease. Who knows, I’m thinking I’ll retire in a few years and I already own a Lincoln.

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

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