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Upgrade your taxi experience with services like Uber and Lyft

The taxi industry has had a pretty strong hold on vehicles-for-hire in most cities for a long time. In large metropolitan areas like New York, Chicago, and San Francisco, taxis have become extremely important methods of transport. But companies like Uber and Lyft think they can build a better mousetrap, and are trying to shake up the traditional notion of public transportation with added conveniences. By making smartphone apps, more personal experiences, and the concept of ridesharing a part of the equation, can transportation startups like these change the industry for the better?

With traditional taxi services offering seemingly unnecessary experiences (like tipping or hailing from the street), Uber and Lyft arrived on the scene with a new model that focuses on ease of use for the traveler. But, these services are fighting a relatively lengthy uphill battle to dethrone the almost monopolized taxi industry in major cities.

Despite offering good or even better service (than taxis), Uber has faced snags getting into major cities like New York, where just eight months ago their business was threatened by regulators who proposed "banning limousines and luxury cars from using a GPS device to measure a fare, banning a driver from accepting a ride on the street ('hailing') from a smartphone while driving, and banning limousines from accepting requests for rides less than 30 minutes in advance." All three of these proposed changes would have completely invalidated Uber's business model, and effectively drive them (no pun intended) out of New York, which Uber CEO Travis Kalanick argued would just "support taxi monopolies."

In essence, this is a reactionary response by the taxi industry. They obviously feel immense competition from the ridesharing/smartphone-based model, and are doing all they can to invalidate these services instead of innovating themselves. And, it's not just in New York where these mobile-app-based transportation companies are seeing issues. Last month, San Francisco International Airport arrested a dozen drivers working for Uber and Lyft because they "were not permitted there and thus trespassed on airport property." On August 3rd, taxi drivers held a rally at City Hall "demanding that city officials and regulatory agencies consider rideshare companies as illegal taxi services," all because they aren't prepared to compete, at one level or another, with services like Uber and Lyft.

Comparatively, however, Uber's faced a more difficult entry into New York than San Francisco, because New York has a relatively advanced public transportation system. With much of SF bemoaning MUNI (buses), and to some extent BART (trains), Uber has really taken off there because people wanted a better alternative. This isn't necessarily in the case in other cities that have pretty good systems already in place. In New York, subways are significantly cheaper than taxis, and more than acceptable. Sure, a lot of people still take taxis, but when faced with a $2.50 subway ride or a $16 ride with Uber, many people will choose the subway. The only issue here is that, according to a recent MTA (Metropolitan Transportation Authority) report, public transportation in NYC is starting to buckle under the changing habits of citizens where the traditional "9 to 5" is becoming "24/7/365", resulting in more people saying "maybe I'll just take a cab."

In addition, these new services definitely cater to younger generations because of their reliance on mobile applications and smartphones. Not only is the price for entry high (in that you have to have a smartphone capable of running the mobile applications), but the idea is so new that many don't quite understand how it works. The idea of hailing a taxi has been unchanged for so long, that standing on the street, waiting for someone to find you using GPS, seems very foreign to a lot of people. While it's arguably more convenient than fighting other people trying to hail cabs as they zip down a busy street, there's definitely a barrier to entry that Uber, Lyft, and other competitors will have to address as these services evolve. Plus, they still have to work on cost. Taxis are the gold standard for personal transportation in major cities because of their low(ish) cost, and unless you're in San Francisco (where UberX is cheaper than a taxi), Uber can't really compete monetarily.

These are many of the same issues plaguing New York City's new Citibike program, which is only available in certain (primarily affluent, at this point) neighborhoods. This, combined with a high upfront cost if you want to make the program worth it in the long run, have resulted in criticisms about it being a little too exclusionary to disrupt walking the way it's intended. Although the program does offer subsidies for residents of public housing, like Uber, it faces a cost paradigm that makes mainstream adaptation difficult.

The bottom line, though, is that these companies are disrupting long-standing methods of public transportation, and that obviously has various industries worried. The biggest issues Uber and Lyft face, in the short run, is exposure. Lyft is only in seven cities (all in America), and Uber is only in 24 in the US. That's certainly not enough to run taxis off the road for good. Although both companies are continuing to expand, whether they're doing it quickly enough to usurp the taxi industry is a little more muddled. Consequently, the biggest concern among ridesharing evangelists is that the taxi industry is able to delay a nationwide/worldwide rollout of Uber-like services long enough for taxis to integrate some of these conveniences, and retain their pseudo-monopolized grip on public transportation.

In spite of their goal to abolish the taxi industry, ridesharing/mobile hailing services still face significant opposition in trying to change the system. But then again, changing the system isn't supposed to be easy.

Photo: David Thompson