D.C. Cab Companies Blame Steep Declines In Revenue On Ridesharing

The rise of the “ridesharing” service UberX is bleeding traditional taxicabs in Washington.

Although precise District-wide data is not available, taxicab company managers and individual drivers said their business is down at least 20 percent — and in some cases much more — because they cannot compete with the unregulated, low-price competition of UberX.

One of the primary differences between UberX and a D.C. taxicab is the way rides are summoned; passengers order UberX through Uber’s smartphone app while taxicabs are hailed on the street, but taxi operators say UberX drivers are increasingly picking up street hails, further eroding their tenuous customer base.

“We're down 22 percent,” said Jeff Schaeffer, the president of District Cab and 15 smaller taxicab fleets that total 600 vehicles, referring to revenue produced by backseat credit card transactions in cabs that were hailed on the street.

“Dispatch is down 20 percent as well,” Schaeffer added. “Dispatch trips have decreased steadily over the last year. In Northwest Washington, in certain areas that ridesharing services target, you can see trips are down.”

The situation is no better at Yellow Cab, the largest independent cab company in the District with 550 vehicles.

“We have run the data over the last few months and what we are seeing is, year over year, an approximately 30 percent decrease in business. Calls coming in for dispatch trips and for the total trips overall, we are seeing a consistent 30 percent decline,” said Roy Spooner, Yellow’s general manager.

Inside his office in Northeast D.C., Spooner allowed a reporter to see a digital graph charting the steep decline in service calls over the past year.

A similar lament can be heard at VIP Cab’s nearby headquarters in Northeast Washington, where manager Ali Tahmaseb was discussing the tough times with a group of unhappy cab drivers.

“Uber thinks they are above the law and can do whatever they want,” Tahmaseb said. “We're down about 30 percent. Business is most definitely down because I hear from the drivers themselves.”

For some of the drivers who were stopping by Tahmaseb’s office to cash in their receipts, their individual situations seemed dire.

“Yes, we are losing a lot of money. Every day the business is going down. I can say about 40 percent, sometimes 50 percent. We are losing a lot,” said Taye Lemma, a cabbie for eight years. “We have to work longer hours, and even if you work long hours you can’t get enough money to make your life.”

“I have been out since 8 a.m. this morning. I had only five jobs, $60, and it’s late afternoon,” said a dejected Rad Akorli, a dispatch driver for Diamond Cab, who said he has lost 75 percent of his usual business.

“When you drive around you see UberX vehicles just stopping by, picking up just like ordinary taxicabs,” said Akorli, repeating a common accusation that UberX drivers routinely swipe passengers by picking up street hails.

DCTC denies shift

Despite such evidence that UberX is significantly depleting the cab industry’s customer base, the D.C. Taxicab Commission issued a statement saying “empirical observations of D.C. do not provide hard data at this point to indicate a shift by riders.”

The commission’s statement was a response to a reporter’s inquiry about the state of Washington cabs after a report in San Francisco said UberX has drained that city’s taxicab industry of 65 percent of its rides since 2012.

“There are major demographic and structural differences between the D.C. and San Francisco markets,” said commission chairman Ron Linton in the statement. “The supply of taxis in San Francisco is significantly below demand with only about 1,800 metered vehicles in service as compared to an average of about 5,700 taxis in D.C.”

Linton said the District’s taxi fleet has lost about 10 percent of its trips, dropping from 20 million annual rides to 18 million, attributing the loss to the reduction of available vehicles, 6,700 to 5,700.

“It should be noted that approximately 90 percent of these rides are generated by street hails. Ridesharing vehicles are prohibited from accepting street hails which only metered vehicles are allowed to accept and the Commission has the responsibility to prevent illegal street hails,” Linton said.

To the companies and drivers interviewed by WAMU 88.5, the commission’s argument seemed way off.

“It’s UberX,” said Yellow Cab’s Spooner. “This is real. And we have to look at it because we are seeing the subsequent effects of this. We are seeing drivers who can't afford to fix their cars.”

Cab companies say although their vehicles can now be e-hailed through their own apps or through third-party apps like Hailo or MyTaxi, UberX has a distinct advantage because it operates entirely outside the existing regulatory structure. It also is unclear how many drivers and trips UberX is compiling in D.C. because the company does not disclose proprietary business data.

“These companies like Uber, Lyft, and Sidecar are not telling you how many vehicles they have in the market,” said District Cab’s Schaeffer. “You can't just flood a market for numerous reasons. You have safety concerns, congestion, EPA, just to move around the city is getting absurd.”

D.C. Council to tackle ride sharing

The D.C. Council is expected to take up legislation in the next few weeks that is designed to create a regulatory structure within which the “ridesharing” services will operate, but UberX will not be leaving D.C.

“I’m not sure the council knows how to regulate them,” said Schaeffer, who said the District should limit the number of “ridesharing” vehicles allowed on the streets.

Legislation being drafted by D.C. Council member Mary Cheh (D-Ward 3) is expected to require either “ridesharing” drivers or their companies to obtain primary commercial liability insurance for at least part of the time they are on the road, and to conduct more stringent background checks, among other measures.

Whatever may come of Cheh’s legislation, UberX likely will hold onto its biggest advantage over D.C. cabs: cheaper prices. Even if metered cabs could lower their prices, many drivers may opt to keep their rates at current levels because of their higher overhead costs.

“We are seeing drivers today that used to make $200 a shift, some days walking away with $60 to $80, maybe $100 in their pocket. That shows they are making the same number of hours for 50 percent less,” Spooner said.

Source: http://wamu.org/news/14/09/22/dc_cab_compa...