Triangle Taxi Drivers Losing Fares To Uber, Lyft

Jul 16, 2017

Johnson Umeh has plenty of experience as a taxi driver, and he says the job has never been as tough as it is now. Like many drivers, his business is being sapped by Uber and Lyft - the popular ride-hailing apps that tend to offer a cheaper alternative to traditional taxis.

Umeh, a Nigerian immigrant who came to Raleigh in 2002, has driven a cab in the city for 15 years. He says taxi drivers across the city are in danger of losing their livelihoods.

"Our job is now down, totally down," he said. "We're not making money."

The same is true across the country, as more people elect to use ride-hailing applications. In Chicago, the second-largest cab fleet in the county was nearly 50 percent inactive in March. In New York, the industry takes on 100,000 fewer riders per day than it did six years ago. In Los Angeles, taxi trips are down 30 percent.

This past year has been particularly bad for Raleigh taxi drivers, said Umeh - and in summer, the entire industry is at its slowest.

In the sweltering midafternoon heat, close to a dozen drivers stood alongside their parked cabs outside the Moore Square bus station downtown, waiting for fares. Most had a long wait in store.

The lack of business is a source of intense frustration for the drivers. Their resentment is directed at the ride-hailing companies - especially Uber - but also at state and local governments, whose hands-off approach to regulating ride-hailing strikes those in the taxi industry as a double standard.

"They're ripping us off, making it impossible for us to put cars on the road," Umeh said.

A Changing Landscape

Uber launched its ride-hailing service, UberX, in 2012, and Lyft adopted a similar model in 2013. Ride-hailing has since taken off and is popular among urban dwellers, young adults, college graduates and high earners, according to a Pew Research study.

And while there is some evidence to suggest that ride-hailing attracts new customers who would not otherwise take a cab, the competition has undoubtedly damaged the cab industry.

Michael Solomon, president of Taxi USA, which operates Taxi Taxi, the largest cab company in Raleigh, says his company came to the area around the same time as the ride-hailing companies, about four years ago.

Since then, the taxi industry has declined precipitously. In 2013, according to city records, there were 745 permitted taxis, operated by 112 companies.

In May, there were 342 taxis on the road, run by 65 companies, according to city records.

"There are a few companies that were operating 30 to 40 cars, and now they're gone," Solomon said.

Green Cab? Gone. Cardinal Cab? Once the largest operator in the city, with more than 100 cars, the company now has just two on the road. Ride-hailing companies "ran them right out of business," said Raleigh taxi inspector Lorenzo Milliam. Dozens of companies met similar fates, Solomon said, and today more of the city's cab companies are operating fewer cars.

Of the 342 taxis permitted in Raleigh last month, Taxi Taxi owns 99 and Amigo Taxi has 83, according to records obtained by Solomon. None of the other 63 companies listed put more than 10 cars on the road. Sixty companies have five cars or fewer, and 24 operate a single car.

At Raleigh-Durham International Airport, ride-hailing drivers were not allowed to pick up customers until December 2015. But this year, ride-hailing companies have accounted for three times as many pickups as traditional taxis, according to RDU spokesperson Andrew Sawyer.

Taxi Taxi and Amigo, the most successful companies remaining in Raleigh, use online and mobile app booking, one of the strategies that made Uber and Lyft so successful. Because of these innovations, Solomon said, Taxi Taxi has not been as affected by ride-hailing companies.

And Solomon says taxis have some advantages over ride-hailing apps. Taxi drivers can accept cash, while Uber and Lyft accept only credit card payments sent via their mobile apps; taxis don't use "surge pricing," the practice of increasing fares when there is high demand; and taxi drivers don't have the option of turning down potential customers.

"There's some certainties and assurances from the customer perspective," Solomon said. "We are part of the landscape, and a necessity in that landscape."

Two sets of rules

Uber and Lyft have been able to thrive in North Carolina in part because of laws that regulate taxi drivers more strictly than ride-hailing companies.

Cab drivers are subject to expensive licensing, inspection and insurance requirements, which can cost drivers hundreds of dollars each month.

But in 2013, the N.C. General Assembly blocked cities and counties from regulating Uber and Lyft, as well as other online services such as Airbnb. The provision predated the arrival of the two companies in North Carolina and was inserted into a much larger regulatory reform bill and drew little notice or discussion at the time.

And in 2015, when the legislature passed statewide regulations for ride-hailing companies, it allowed Uber executives to help write the law.

"The more choice, the better," said then-Gov. Pat McCrory at the bill's signing. "The consumer wins."

But the clear loser is taxi drivers, who say the law applies separate sets of standards for Uber and Lyft that allow them to keep their prices lower. Some say they've called on the Raleigh City Council to take action, but even if it were inclined to act, state law prevents the council from doing so.

"I understand, because it's all about money," Umeh said. "Money talks. But it's not fair."

Even when municipalities in other states attempt to regulate ride-hailing, Uber has a track record of continuing to operate in defiance of local regulators in a strategy known as "principled confrontation."

Blowback from the aggressive tactic, including a federal investigation, is part of the reason Uber's founder and CEO, Travis Kalanick, recently stepped down from running the company.

Neither Uber nor Lyft responded to repeated requests for comment.

Solomon, who lobbied the General Assembly to enact harsher regulations against ride-hailing companies, said the regulations would have kept order and protected the safety of the driver and the passenger.

"Short of that, it's chaos," he said.

What's next for taxi drivers?

For Johnson Umeh, driving a taxi is a source of pride.

He said he would never consider driving for Uber; other taxi drivers say the same. Of taxi drivers who leave Taxi Taxi to drive for Uber and Lyft, "99.9 percent" come back, Solomon said.

Gabriel Obi, a 15-year cab driver, said he can't make enough money driving full-time for Uber or Lyft, once you factor in the price of gas and the car's depreciation.

Obi said he has spoken to the city council about the problem, to no avail. Other taxi drivers have tried different measures to catch the public's attention, including going on strike on New Year's Eve three years ago.

But the cab driver jobs are decreasing. Just two years ago, 1,474 drivers received taxi permits in the city, according to city records. In 2016, that number dropped to 887, and so far this year only 520 drivers have received permits.

Like Umeh, Obi is a Nigerian immigrant. Both drive for American First Taxi, which operates five cabs in Raleigh.

Obi said he has begun searching for another job - perhaps driving a bus for the city.

"I have to eat, I have to pay my rent, you know?" he said. "I have to do something, because this business is going to die."
___
Information from: The News & Observer, http://www.newsobserver.com

 

Tags: