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Cabbies Push Back Against Uber and Lyft 

Stuck in a tightly regulated profession, taxi drivers are chafing at rideshare apps' success

Thursday, Aug 29 2013
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The Authorized Taxicab Supervision system was created to keep bandit cabs out of LAX — but ride-sharing apps are proving more complicated.

PHOTO BY TED SOQUI

The Authorized Taxicab Supervision system was created to keep bandit cabs out of LAX — but ride-sharing apps are proving more complicated.

It was a Friday night in June when former Lyft driver Yago Rodriguez picked up four women in Santa Monica outside the Buffalo Club and unknowingly drove his vehicle into a sly game of bumper cars. Rodriguez (who has asked not to be identified by name) was about to pull away from the curb when, he says, a taxi hit his front bumper — the very bumper plastered with Lyft's famous fuzzy pink mustache.

"That's when I felt another hit from behind," Rodriguez says. "Another cab had bumped into my rear bumper."

Rodriguez says the women started to panic, but he calmed them by saying he would handle it.

"So I grabbed my knife, and I got out of the car," Rodriguez says. He walked over to the taxi that had struck his front bumper and tapped its window with the tip of the knife. "You better get this fucking car out of the way, or I'm going to stab your tires out," he told the driver. "Then I'm going to get back into my car, and I'm going to push your car out of the way."

The driver threw up his hands and peeled away.

A Lyft spokeswoman did not respond to the Weekly's request for comment by press time.

Lt. Richard Lewis of the Santa Monica Police Department says no reports have been filed about altercations between Lyft and taxicab drivers. However, Lewis says numerous Lyft drivers have been cited for failing to comply with local ordinances, and "there have been stings to make sure they're operating in compliance with the law."

Over the last few months, tensions in the region have grown between traditional taxi drivers and Lyft drivers, ever since a letter from L.A. city officials ordered Lyft — and similar, taxi-like services Uber and SideCar, all of which transport citizens to various locations (arranged via a smartphone application) — to shut down.

Taxi drivers are reporting a slump in business, and some drivers have defected to Uber and Lyft. In late July, the California Public Utilities Commission (PUC) issued a proposal that would allow companies like Lyft to continue to operate in California as Transportation Network Companies, dealing another blow to the taxicab industry — and adding to the tumultuous environment.

"We were driving down Venice Boulevard," Rodriguez says, recalling another incident in June, "and a cabdriver was on the right side. He was waving his fists at my passengers and yelling at them. Then he cut me off and nearly T-boned me. He jumped out of the car and started to write down my license plate number."

A source at the Santa Monica Police Department acknowledges that there have been "grumblings" about altercations between Lyft and taxicab drivers. In particular, some Lyft drivers avoid LAX, which is considered unsafe territory, with its hoards of cabdrivers capable of joining together against a lone, pink-mustached Lyft car.

Rodriguez says Lyft actually advised its drivers to approach LAX at their own risk and only if they felt safe doing so.

Taxicab drivers are upset about the incursions on their livelihood, and are directing their anger toward the new industry. But there is more going on here than new competition. The cabbies themselves say the creaky, antique nature of their industry and its rules also are to blame.

At the Authorized Taxicab Supervision (ATS) holding area adjacent to LAX on a recent Tuesday, yellow, green and blue cabs from all nine taxi companies franchised by the city of Los Angeles to pick up passengers within city limits are parked as planes fly overhead and land several hundred yards away.

Many of the taxi drivers are waiting their turn to pick up passengers, smoking cigarettes underneath a freeway on-ramp. Some are immigrants — Eastern European, Pakistani, Indian — who struggle to find the words in English to express their frustration, but it's clear it stems from the idea that Lyft and Uber don't have to follow the same rules they must.

They are frustrated because they are required to wait in this holding lot for passengers at LAX, while Lyft and Uber are allowed to operate freely, which means they also can avoid passing on extra fees to their passengers.

The Authorized Taxicab Supervision system was created to maintain order and safety at LAX, as well as keep out bandit taxis. Fares from the airport are longer and usually the best money, so there is a lot of competition. In 2007, then–L.A. City Controller Laura Chick issued a report, "Audit of the City's Contract With Authorized Taxicab Supervision Inc." Chick found that an "award of a sole-source contract to ATS may not be in the best interest of the city."

Under ATS regulations, each cabdriver is restricted to a five-day rotation, which corresponds to a letter on his taxi. Before each pickup, the cabbie must pass an electronic gate, where a $4 fee is deducted automatically from his ATS debit card. That fee is divvied up between Los Angeles World Airports and the ATS bureaucracy. The passenger actually pays the $4 fee on top of the fare.

"I can't get a state license as a taxi driver," says Mesfin Tadesse, a driver for United Independent Taxi. He is referring to Lyft drivers and their ability to operate as Transportation Network Companies and thus avoid regulations imposed upon taxis by local ordinances. "My license is under the city of Los Angeles. ... You are chained by the city rule."

Taxi drivers must abide by the rules of each city, which charges its own permit fees or franchise fees, and it's quite a jumble: Some can't pick up passengers in certain locations unless they pay the fee or can acquire the license, which can be tough.

If a driver doesn't have a license to operate in Beverly Hills or Santa Monica, he can't pick up there. If he does, he can be fined.

Yet Lyft can operate in any location — as long as its drivers are contacted through the app. And these drivers are not assessed the fees imposed on taxicab companies, fees that hit the cabdrivers.

Under the PUC proposal, Lyft drivers would pay more insurance. On the other hand, cabbies must purchase "seals" and pay a fee for bandit-taxi watch, car leases and other costs in addition to insurance.

"We provide our functions in a tight regulatory environment, and the regulatory environment imposes costs on us," says William Rouse, general manager of Yellow Cab and one of nine members of the ATS board. "We're now in a state of competition where ... competitors are able to skirt huge portions of our cost structure."

While Lyft is surely changing the transportation landscape and providing a cheaper and faster service, there's no question that these innovative firms threaten jobs in the taxicab industry. But is Lyft actually causing the instability, or is it the inability of organizations like ATS, with its multilayered regulations, to evolve with a new technology?

"They can pick up anywhere in the city of Los Angeles," Tadesse says. "I can't pick up right here in El Segundo. I can't because I don't have a state license. Uber and Lyft, they can pick up anywhere. That's unfair."

Behzad Bitaraf, general manager at ATS, had "no comment" when asked about the relationship between ATS and Lyft drivers.

Yellow Cab's Rouse argues that without all these rules, there would be disorder; taxis would fight over customers and begin cheating passengers in order to make a living; and the entire city wouldn't be covered, leaving less lucrative areas of the grid without service.

But perhaps a little disorder in the taxicab industry is just what the city needs in order to change regulations so cabdrivers have a chance to compete against "ride-sharing apps" like Lyft, which raised $60 million in venture capital last spring.

Maybe a competitive and modern transportation environment in L.A. can finally free Angelenos from the drudgery of the city's highway hypnosis while giving taxicab drivers a chance to maintain their quality of life and their jobs.

As one taxicab driver at ATS says, "We are working here because there is no other option."

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