Uber unites taxi drivers and owners in a beautiful partnership of hatred

By Ted Rall , written on May 26, 2014

From The News Desk

[Editor's note: An earlier version of this piece showed an incorrect byline. The correct author is Ted Rall.]

On Friday, Courthouse News Service reported:

Fifteen Connecticut cab companies sued the ridesharing app-providers Uber and Lyft in Federal Court, seeking an injunction against the unlicensed services they say flout public transportation laws and are equivalent to 'a fleet of gypsy cabs.'

'Over 90 years of regulation in Connecticut have produced a set of rules designed to meet the needs and protect the rights of individuals who need a car and driver on short notice - i.e., a taxi,' the complaint states. 'Technological advances have made taxi dispatching more efficient over the years, but the defendants' approach ignores virtually all taxi regulations designed to protect customers who suffer from disabilities, who live in less secure neighborhoods, or who simply cannot afford a limousine.'

Lead plaintiff Greenwich Taxi claims that the ridesharing companies 'carefully crafted [a] plan to insert itself, at no cost and without legal authority, into the taxi and livery infrastructure that has existed in Connecticut since the 1920's. The defendants then profit by simultaneously flouting and taking parasitic advantage of a transportation system in which all other players must comply with safety rules and consumer protections established by state and city laws.'

Cabbies in Houston and San Antonio filed a similar lawsuit against Uber and Lyft in April. Taxi regulators in New York, Vancouver, Seattle, and elsewhere have also challenged Uber. Last year California became the first state to legally accommodate the ride-sharing business model.

On the other hand, European taxi drivers aren't driving off so quietly into that good night. In January, Paris cabbies went on a violent Uber car-bashing spree. In London, traditional taxi drivers are threatening gridlock next month unless Uber gets banned.

The taxi industry, responds Uber founder Travis Kalanick, is a "protectionist scheme." He claims that the industry doesn't care about the drivers, and the cab cartel "would prefer not to compete at all and like things the way they are."

Well, yeah. Why wouldn't they?

Kalanick is a smart guy, but I think his glib response to the growing avalanche of cease-and-desist notices is missing a unique aspect of the taxi biz: It's one of the few sectors in which the interests of labor and management are not diametrically opposed. And that makes for an unusually powerful alliance of enemies.

As in other lines of work, taxi profits are a zero-sum game. But taxi owners and drivers share a desire for higher fares and restricted supply. This common interest is so pronounced that, in many places, taxi "drivers" unions represent and are managed by bosses.

In most cities, cabbies work under one of three basic payment schemes. The oldest is a commission system under which the owner of the cab pays its driver a percentage of the total on the meter at the end of the day. This has pretty much vanished because too many drivers cheat by driving off-meter. The norm for drivers who don't own their own taxis is the lease system. You rent the cab for a fixed rate, say $150 for 12 hours, return it with a full tank of gas, and keep whatever you make over the lease fee plus gas. Finally there is the elite class of owner-drivers -- drivers who own their own taxi.

With the exception of the relatively low number of existing drivers who join Uber, every class of driver and owner is threatened by competitors, especially since Uber attracts the well-heeled fares who travel longer distances.

Taxi drivers aren't paranoid. They know there isn't room on city streets for both them and Uber.

During the mid-1980s, when I was working my way through college working my way through massive student loan debt as a yellow taxi driver in New York, my average earnings for a 12-hour shift fell from $240 to $85. The economy hadn't changed. The number of taxis had gotten too big.

A fixed number of yellow cabs — 13,595 "medallions," as set by a law signed by Mayor Fiorello LaGuardia in 1937 — is licensed by the city to pick up street hails in the five boroughs. New Yorkers perennially complain that they can't find taxis at rush hour or during a rainstorm. (Most cabbies would reply, what about the rest/most of the time, when they're riding around empty?) Beginning in 1982, in order to address the relentless editorial page screeds declaiming the supposed shortage of yellow cabs, the Taxi and Limousine Commission created a new category.

Each medallion owner received two licenses for so-called "black cars," so named because the black Lincoln Town Car became the standard package. They couldn't accept street hails; they were dispatched by radio.

Wall Street banks, law firms and other Manhattan companies soon signed contracts with the black cars to spirit their executives home to Westchester and Connecticut. Black cars secured a monopoly on long, lucrative $200 fares; yellows were relegated to the $5.60 hops across Central Park (here, keep the 40¢). Adding to the effect of the bifurcated fare structure was simple supply-and-demand: with three times as many taxis chasing the same number of customers, per-driver revenue plummeted as accidents caused by desperate drivers cutting each other off rose. As wages fell, experienced drivers quit. I was one of them.

San Franciscans are witnessing the same phenomenon.

"They've flooded the streets with too much supply," Trevor Johnson, a driver and director of the San Francisco Cab Drivers Association said. "It's already the Wild West out there. Go down Polk Street on Saturday at 10 PM. and every car out there is for hire. It's gridlock."

Uber and Lyft may not be on the ropes — in dollar and cents terms, in places like San Francisco, they're destroying the yellow cabs — but they ought to be worried. The old-school taxi industry enjoys extraordinary high political clout derived from well-placed donations to entrenched figures in city government, that unique solidarity between worker and boss, and a perception — undeserved, in my experience — that "official" yellow cabs are safer and more professionally driven than these snotty young punks in their Benz S550s.

Riffing off the death-by-Uber-driver of a 6-year-old girl in San Francisco, Trevor Johnson, one of the directors of the San Francisco Cab Drivers Association, asks Business Week: "Would you feel comfortable if you had a 21-year-old daughter living alone in the city, using a smartphone app to get in a vehicle for hire, and that vehicle ends up being a 2001 Chevy Astro van with 300,000 miles on it?"

Of course, you can die in a regular cab too. As I witnessed firsthand, safety inspectors looked at your $100 bribe, not your car, which was more often than not a hot mess of duct-taped pipes, fenced spare parts, threadbare tires, and secondhand brake pads moments from disintegrating. One time I drove a car that stalled when you tried to turn right. I took every customer around the block left after left after left until one guy insisted I go right. We struck a parked car. When I threw in the towel as a driver (after being held up at knifepoint for $12), my owner-boss mourned: "But you're my safest driver! Only 24 accidents!" (Of which only one, a fender-bender, was my fault. But still.)

Because passengers remain ignorant of the ugly truth beneath the hood, the safety issue remains a potent weapon in their war against Uber, Lyft and other ride-sharing outfits.

"Taxi drivers and cab company owners have a long history of not getting along, but they're united in their opposition to the newcomers," reports SFGate. "They say the [Public Utilities Commission] regulations are minimal, essentially allowing anyone to haul passengers for money in their personal cars with a minimum of rules and red tape. That makes it easier for ride services to hire drivers, they say."

One owner's quote sums it up:

"Who wants to go through the process of getting a license and going through training when you can just get a couple of apps and start picking up people in your 1999 Mazda?"

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