Los Angeles declared war on ride-sharing on June 24, with a letter from City Hall ordering three companies — Uber, Lyft and Sidecar — to shut down or face criminal charges. On the same day, Yellow Cab and the other established taxi companies launched their own attack, declaring the startups to be "high-tech bandits" and announcing a taxi drivers' rally at City Hall.
One of the advantages of being an entrenched oligopoly is that your lobbyists can coordinate closely with regulators. The next day, the taxi industry packed the room at a City Council committee hearing. The ride-share companies were caught flat-footed. The lone Lyft supporter at the meeting — a driver with no official position with the company — was cross-examined and then dismissed as the council members vowed to press ahead with the crackdown.
Fortunately for Uber & co., however, often there is a wide gap between what the city says it is doing and what it does. The city's medical marijuana dispensaries, for example, have been subjected to repeated "crackdowns," which tend to evaporate like so much bong smoke. And so the ride-share companies have continued to operate as before, blithely ignoring the decree from City Hall. Thus far, they have been unimpeded.
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Drivers for Ride Apps Face Arrest in L.A.At the same time, they have begun to organize their supporters. Helped by the July 1 handover of power to a tech-friendly mayor and City Council, the ride-share providers now seem to have the upper hand. In an interview with Huffington Post, Mayor Eric Garcetti came out strongly in favor of smartphone-based ride-sharing, saying that the startups were "disrupting the status quo," and the taxi companies would simply have to "adapt and adopt."
There is more at stake than a fight over market share. Ride-sharing represents a real advance in transportation technology. For passengers, tapping a few buttons on an app is much easier than calling a cab or, God forbid, trying to find one on the street. It's also cheaper, unless you ask for a limo. For Garcetti, who has vowed to bring government "into the smartphone era," it's almost a no-brainer.
Two weeks after City Hall's decree, Lyft hosted a mixer for its drivers. Many of the cars outside were adorned with Lyft's distinctive pink mustaches. The guest list was strictly enforced. Inside, a couple hundred stylish 20-somethings drank Heineken and POP Water, a flavored beverage marketed by Lady Gaga's management firm.
Lyft drivers tend to be young, personable and underemployed. Hiring out their car is an easy source of side income. But at the mixer, titled "Save the 'Stache," they also talked up Lyft's unique ability to build community and foster relationships in ways that would otherwise be impossible in car-dependent L.A. "We are not bandit cabs," one driver said. "We are your friend with a car."
After a while, Lyft's 29-year-old co-founder took the floor. John Zimmer had just flown in from San Francisco. A Zuckerberg in the making, he wore jeans and a button-down shirt, and spoke the language of revolution.
"We can change transportation," he said. "We can build a new form of transportation that's more efficient, more affordable, more social. We can change the way people think about Los Angeles. ... And if we can change L.A., we can change the rest of this country and then, y'know, we're gonna march on and try to change the world." Big applause.
One of the young people in the crowd was Adam Englander, son of lobbyist Harvey Englander and a vice president at his father's firm, Englander Knabe & Allen. Zimmer seemed to recognize that he would need someone who understood City Hall if he was going to take on the taxi lobby; the following week, Harvey Englander would confirm that he had been retained to fight the entrenched taxi franchises.
"It's sad that that's what we're talking about now, but it's the truth, I know that," Zimmer told the Weekly. "But it's frustrating that that's what we're talking about, rather than, 'What do the people of L.A. want?' "
"These services come along because existing services aren't meeting demand," Englander said. "The taxi industry has become a dinosaur."
Uber launched in L.A. in early 2012. Lyft got started this past January and already has several hundred drivers. Sidecar launched in February and says it also is growing fast. Collectively, their entry into the market poses an obvious threat to the nine franchised taxi companies, which are capped by law at 2,300 cars.
The taxi cab companies' lobbyist, Rick Taylor, argues that the industry is fighting "sophisticated bandits with funding from Wall Street."
"Innovation exists today in the taxi industry," Taylor says. "We have an exciting app that does everything and more than the apps do from these illegal operators."
But the taxi franchises' app, Taxi Magic, does not measure up. First off, it does not work in every city — since cabs are governed by a confusing hodgepodge of regulations, passengers have to call a different cab company depending upon whether they're in Culver City or Beverly Hills or Venice. The app works only in L.A., Long Beach, Santa Monica and Pomona.
Zoecapangelo if I pick my friend for a ride and someone crash into my car.who will pay.is the same thing.listen about 14 year ago I was driving a la yellow cab and I was giving a ride to my girlfriend and someone crash into my taxi and that guy didn't had insurance and la yellow cab never pay my girlfriend for her injur and I paid for the car to be fixed.la yellow cab is full if shit same with mr.william rouse owner of yellow cab.
I agree with mrjhnsn. We recently started seeing Lyft in Chicago. If the new start-ups really wanted to transform transportation industry service, they would do it with the same legal protections in place for consumers that regulated taxi companies have. The argument that taxi drivers have a bad attitude and the old system is far from ideal is not a strong enough to overcome the major shortcomings - namely liability - that the new app companies present. The arguments many are offering are about as logical as saying my old dentist is a jerk and makes me wait in his office for 45 minutes before providing me with licensed and regulated medical care, so a better solution is to use an app on my phone to have a friendly stranger, who is not a dentist, come by my apartment and do my root canal.
Still don't get it why la cab company are trying to say uber is not safe! I know because most of the good driver like me is changing to uber just like the client and the value of the taxi is coming down.good cause they are don't care for none.don't believe what they are saying .slave job is overthanks to uber.this is america
3 weeks ago arrived LAX from vaca on Kauai @ 5:50am. There was a 15min wait for any taxi, while the line formed behind us with others waiting for cabs.
When our taxi arrived I gave cabbie our address in nearby Playa del Rey, which is spitting distance (but cab still gets his minimum $20 for it) the cabbie shook his head and made a sound of---maybe disgust, maybe anger. I asked him if there was a problem. He drove.
This wasn't the 1st time but was the most overtly rude cabbie for me. If the cab companies really don't want to boost the competition they need to learn 1) Basic manners, which includes not talking on a cell phone (in any language) for entire trip, & 2) Stop the entitled, slightly put-out attitude of having to drive people somewhere.
Attitude-- who isn't going to go to the ride-sharing apps with cabbies like we have in LA. In other cities most are friendly even NYC. In LA they want you to be going to Palmdale from LAX or else it's a waste of their time. Who needs it?
Our current taxi system in L.A. is horrible. Über is great, and the free market needs to speak, here.
You have the story backwards. The big "oligopoly" in the room is not
the cab companies, which are mostly local, and different in every city,
but the multi-city "app" companies, backed by millions in investment
capital, and in the case of Uber, already a multinational.
The
"technological improvement" argument is completely meaningless, since
apps like this have been around for dispatching cabs for at least a year
longer than any of these other companies. All they are doing is pushing
to deregulate the local cab industry -- in the long term you will have
powerful multi-city or multinational corporations like Uber controlling
cab and limo dispatch, or cabdrivers trying to make a living in their
own vehicles as Lyft or Sidecar "friends with cars."
Some things are more important than being slick, new or easy-to-use. San Francisco attorney Christopher Dolan best sums up how passengers and drivers can get screwed by ridesharing apps. If you drive for or use these apps, take a minute to read the column linked to at the bottom of this comment. He has other columns, too. They might save you a world of pain.
To passengers, Dolan writes:
“You passengers will have to decide for yourselves whether forgoing your constitutional rights, liability protection and potentially safety is worth a fist-bump and a ride across town in a ridiculous-looking pink-mustachioed car.”
To drivers, Dolan writes:
“To you drivers, do you want to put yourselves at risk of losing everything — your lives, your car, your health, your income, all so that you can give 20 percent to a company that will run from you if you are in an accident?”
Link to his column:
http://www.sfexaminer.com/sanfrancisco/ridesharing-also-bad-for-drivers/Content?oid=2507217
Cab companies have been the worst enemies of enhanced public transportation nationwide for decades. Ever wonder why rail transit extension to airports is typically the lowest priority? Or why ride programs for seniors and the disabled can't charge a modest fare to supplement government subsidies and assure sustainability? Look no further than the taxi lobbies and their "friends" in State and local government.
@zoecapangelo "they woulddo it with the same legal protections in place for consumers that regulated taxi companies have."
Bullshit. Those unnecessary monopoly-protecting Big Government REGULATIONS are the very reason why Taxi's SUCK ... and the FREE MARKET is demanding and supporting these new Alternative Modes of organizing pre-existing modes of transportation.
@recalderafael even if Uber or Lyft drivers are the safest in the world there are other cars on the road that are not. What happens if some bad driver crashes into your wonderful Uber driver and you are injured or die....who is accountable/pays?
@DonkeyHotay the myth of greedy taxi monopolies is completely false.
Taxi companies compete for taxi permits, they woo the drivers that own them with better cars, better radio calls, etc. Taxi companies don't give two shits about you because you are not their customer. Taxi drivers are. Taxi companies have ZERO to do with the quality of service you receive.
The freedom of choice is already there. Freedom of competition already exists. Stop drinking the pink kool aid.
Why not just let the market decide? if it is so horrible to pay less for better service with an alleged amount of additional risk then these companies will go out of business. The rent-seeking taxi companies depress wages and have legislated around competition for a very long time. Now they want to scare and regulate much need competition before it can take root.
To the extent the issues in Dolan's article aresome major concern (other than talking points) then they can simply be required to have insurance or a bond equal to whatever a taxi or town car does. The state could require them to permit their drivers, do background checks, or just register them.
Not that an state/local regulation that I can think of actually does anything it says. I've rarely had a taxi driver who seems like a person that is 'safe.' I've been in plenty where the driver was plainly drunk. Why do taxis need rape cams? Maybe because all this permitting and regulation didn't prevent taxi rapists?
Which constitutional right am I losing that I don't lose in a cab? That's dishonest. Neither is the government. The rights discussed are contractual. Private people cannot racially discriminate. The Unruh act says so.
Whether drivers are underinsured is a legitimate (and solvable) issue. The crappy terms drivers are getting is a fair issue. I agree that Lyft, etc, are common carriers as to the extent there are requires as to who to pick up, insurance required, or non-waivable liability, then great. The solution is for riders to become educated.
Frankly, I do not think these services will obtain the business they want without taking on that responsibility. To do otherwise is to cede some "safety" to the competition in a market where "safety" is a big deal. Why not let the industry play out without killing it just to keep taxi rates artificially high? Hipsters may be willing to get picked up by people they don't know but most people aren't.
This is a good way around the hideously anti-competitive taxi regulations that have created such a huge hole in the market. These companies would all go away if the medallion cap went away.
Great post. The biggest question would be who pays for me to get better if there is an accident and I use one of those services?
@mrjhnsn "The freedom of choice is already there. Freedom of competition already exists"
Then you have nothing to fear from the Alternative Ride Sharing Apps.
@sokrates @sokrates The constitutional right you give up by riding in a lyft, sidecar, or uberx, is the constitutional right to a jury trial. You are agreeing that you cannot and will not hold them liable for anything that happens to you as a result of the ride up to and including death.
When you get in a legal taxi the taxi company and driver are liable in the case of anything that happens to you. This is why it is licensed as a taxi by the city or county in which it is licensed.
The app companies are very discriminative by not providing transportation to the disabled in wheelchairs and not having apps accessible to the blind. A clear violation of the Unruh Act.
The other thing to consider is that no matter what these companies say, they allow out of state plates and do not keep records immediately accessible to local law enforcement like taxis are required to do.
The so called "rape" cams are actually primarily for the protection of the drivers as driving a taxi is one of the most dangerous jobs in the world and one where the probability being a victim of homicide is just behind that of law enforcement. That's not to say cabbies don't make inappropriate advances, but if they do there is recourse with immediate consequences. Something you don't get in app based illegal taxi rides.
Finally the medallion cap is in place in cities like San Francisco to make sure that the cab drivers can earn a living wage and to keep congestion down.
When transportation regulators can't keep the number of cars on the road in check it gets dangerous for other users of the roads especially bicyclists and pedestrians. When there are too many cabs drivers cannot make enough money to support their families. A prime example is right now in SF where there are thousands of illegal taxis (operating under the guise of "ridesharing") competing with legal cabs daily, cutting the already barely livable wage of the cab driver by 60% essentially leaving them with nothing.
If lyft, sidecar and uberx wanted to really compete they can start their own leagal cab companies and change the industry from within.
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