There’s no doubt rideshare companies — Uber, Lyft, and the like — are impacting traditional taxi and car service companies. Even though the taxi industry brings lawsuit after lawsuit against Uber, the rideshare giant has so far been able to fight them off, one by one, all while increasing their own revenue. Not only is Uber, and rideshare companies like it, honing in on the territory of traditional taxi drivers, it seems Uber has its sights set on replacing all drivers-for-hire with technology — namely, driverless vehicles.
Will Ridesharing Kill the Taxi Profession, or Will Technology?
“Before you used to see a sea of yellow; now you see a sea of black,” Robert Perez, a cabdriver in New York City for two decades, recently told The New York Times. In New York City, the average number of daily taxi trips was more than 100,000 lower during November 2016 than the average number of daily taxi trips in November 2010, before Uber, Lyft, and other rideshare apps became popular, The New York Times reports.
In New York City, taxi drivers are regulated more heavily than rideshare companies: Uber can use surge pricing during peak times, but taxis cannot, and taxis have wheelchair-accessible mandates while rideshare companies do not, all of which creates more expense, and less revenue, for taxi drivers as compared to rideshare drivers, reports The New York TImes. The same is true in Chicago where rideshare drivers are subject to fewer regulations than taxi drivers, reports the Chicago Tribune. In cities like New York and Chicago, taxi drivers must purchase medallions from the city (or lease them from a third-party). This year, medallions cost $66,000 in Chicago and $250,000 in New York — high numbers that still represent a drastic decrease in value since ridesharing’s rise in popularity. In 2013, a medallion in Chicago cost $349,000, and in New York City it cost $1.3 million.
Taxi driving has traditionally been a way for immigrants to enter the workforce, writes the Chicago Tribune, but the number of new drivers in Chicago has fallen every year since rideshare companies began operations. In 2016, just 300 new taxi drivers entered the industry, compared with 1,350 in 2014, and fewer drivers renew their license each year, too.
Ridesharing companies impact the taxi industry more and more each year, but even rideshare drivers might have limited careers if the likes of Uber have their way. As we’ve written, Uber has already made concrete moves to introduce driverless vehicles to cities across the country. In September 2016, Uber introduced driverless vehicles to the city of Pittsburgh, and they attempted to introduce them to San Francisco in December 2016, though lawmakers in the city expelled them after just a week. Though the driverless vehicles still have an alert and ready driver behind the wheel just in case, it’s clear the goal is completely autonomous vehicles that don’t need a driver of any sort.
Why Can’t Taxi Drivers Become Uber Drivers?
For now, truly driverless vehicles aren’t available for public use, and rideshare and taxi drivers still have their jobs. It might seem obvious to people outside the industry that if taxis are no longer as viable as they were, drivers could just switch to rideshare companies. But, for many taxicab drivers, it’s not so easy.
Traditional taxi drivers usually purchase expensive medallions with mortgages, meaning they can’t simply trade in their yellow car for a black one. Just like homeowners with mortgages, medallion owners work for years (often dozens of years) to pay it off, hoping to make a return on their investment when they sell the medallion and retire. But with medallion prices plummeting, many owners often end up owning more than the medallion is worth, writes the Chicago Tribune, meaning in order to switch to ridesharing they would have to take a big loss, a financial hit most cannot afford.
However, many taxi drivers who lease medallions (rather than own them) are making the switch to ridesharing. One such driver, Joseph Adeyanju, told the Chicago Tribune that after 40 years in the taxi business he had hung up his hat. Adeyanju stopped leasing his taxi and became an Uber driver a year and a half ago. He finds he pays fewer fees with Uber (no lease or cab fees, no credit card processing transactions), and the cashless system makes him feel safer. “I don’t have to worry about someone who is going to put a gun to my head,” he told the Chicago Tribune. Adeyanju, who first became a cab driver when he moved to the U.S. from Nigeria, had been robbed five times as a taxi driver.
Many taxi drivers elsewhere around the country defect to ridesharing too, choosing more flexible hours and better pay over traditional taxi driving profession. Parking lots and garages in New York City, reports The New York Times, have recently been dubbed “taxi graveyards” as yellow cabs sit unused.
Is There Still a Place for Taxicabs?
Younger, smartphone savvy riders tend to choose rideshare companies over taxis, even in cities like New York with reliable–and plentiful–taxis. Still, taxicab riders still have their fans in people who don’t like to use smartphones or who find the rideshare-app system unnecessarily complicated. A 28-year-old New York City dweller told the New York Times that he prefers taxis because drivers know their way around the city, something anyone who’s ridden in both a yellow cab (in which drivers almost never use navigation systems) and a rideshare (in which drivers often can’t get from one part of the city to another without navigation), can relate to. It’s clear then that taxis offer some people things that ridesharing can’t yet match, but whether it’s enough to keep the traditional taxi in business remains to be seen.