New DC Taxicab Commission proposals challenge Uber

The DC Taxicab Commission disclosed a series of proposals on Oct. 8 that would make the city’s fleet of nearly 7,000 cabs a model for other taxi commissions in the country struggling to retain drivers and compete with popular app-based services, such as Uber and Lyft.

“The Commission will allow the public vehicle for hire industry to compete on a fair field,” DCTC spokesman Neville Waters said of the proposals. For instance, the commission has presented plans for the One City One Taxi app, allowing customers to call taxis electronically. “There would be no charge for the taxis or the customers to use it. There would be a cooperative association form of drivers and owners who would actually operate it. It would be operated and marketed separately from the commission,” he said.

The DCTC is calling for further change in the drivers’ benefits under these projects. “We are also looking to create a benefits program for long term drivers that would include retirement, life insurance, disability, and supplemental medical coverage,” Neville said. “We’ve recently gone to a five-day licensing process to streamline [certification], whereas it had been a month-long process before getting your commercial drivers license.”

Uber spokesman Taylor Bennett commented on why he believes riders and drivers alike are choosing the app’s service instead. “Everybody loves Uber. It offers the safest, most reliable and affordable way to get around town,” Bennett wrote in an email to the Voice. “Unlike taxi drivers who start their week hundreds of dollars in the hole before they make a penny simply to rent their vehicle, Uber partners have minimal overhead costs and low barriers to entry to start their own small business, increase their income and live a more comfortable lifestyle with added flexibility in their schedule.”

The proposals by the DCTC aim to resolve the issue of local taxi services competing against ridesharing apps in the nation’s capital. Last Wednesday, a taxi driver protest against apps like UberX, Lyft, and Sidecar tied up downtown traffic. According to Time, the protest was held in response to new regulations for the apps introduced in the D.C. Council. These regulations would allow companies like Uber and Lyft to permanently operate in the city as long as they conduct background checks for all drivers, provide a minimum of $1 million insurance coverage, and never accept street hails, among other rules.

The legislation moved out of committee on Tuesday and will face a final vote later this month. Uber has praised the legislation, but the Washington, D.C. Taxi Operators Association and the Teamsters, which represent local taxi drivers, say that the rules give companies like Uber and Lyft an unfair competitive advantage.

Taxi drivers protested in Washington in June, congesting traffic for hours in downtown D.C. Similar protests occurred in Boston and San Francisco due to the taxi industry’s ongoing battle with the apps services.

Uber recently reduced UberX prices, making its services an even bigger threat to local taxi services and more appealing to local riders. Bennett explained that the decision was made after Uber invested millions of dollars in extensive pricing experiments in dozens of cities across the United States.

“We reduced fares in cities across the country, which led to greater demand and more people taking more trips, resulting in increased partner earnings,” said Bennett.

The D.C. taxi industry’s few app-based ride-sharing allies are at a disadvantage due to such companies. Since its launch in the District in 2012, Hailo, a London-based cab-hailing mobile app has connected professional cab drivers with customers who would rather hail electronically than wave their arms on a street corner. On Oct. 14, however, Hailo announced that it will be shutting down service in the U.S.

“We have decided to end our operations in North America, where the astronomical marketing spend required to compete is making profitability for any one player almost impossible,” said Tom Barr, co-CEO and President of Hailo in a statement.

Hailo charged users $1.50 for installing its electronic hailing service. Then, customers paid the regular, city-mandated taxi fares. That put Hailo at a disadvantage against Uber and Lyft, which offer rates as low as half the regulated fare schedule.

Ashish Prashar, spokesman for Hailo, discussed the reasoning behind company’s decision to close its offices in the U.S. “It was not Uber’s attacks in the U.S. that made us leave, it was the ridiculous money that Lyft and Uber were spending to fight each other that made us rethink the make,” wrote Prashar in an email to the Voice.

Several private company apps, such as Curb and Hailo, allowed customers to order a cab via smartphone while in compliance with the DCTC. With the rising popularity of Uber, Lyft, and other apps that offer cheaper riding services under different legislation, local taxi drivers have struggled to make a living. According to The Washington Post, Chairman Linton is hopeful that the proposal for One City One Taxi will be approved by December. If adopted, the DCTC’s proposal would be one of the first measures that a city has offered cab companies as a tool to compete with apps on price and convenience.

Photo by Joshua Raftis