When he was 50 years old, Larry Bowles was a disgruntled car salesman who didn’t see eye to eye with his boss. After getting into a heated argument with his superior, he quit his job in a fury and whipped out of the parking lot, nearly hitting a taxi cab as he pulled onto the road.
As he drove off, the image Bowles had stuck in his mind wasn’t the close call—it was the phone number printed on the side of the cab. Bowles took the near-miss as a sign, and decided to take the advice of his uncle (a D.C. cab driver) to get into the taxi business. His outgoing personality and familiarity with cars made him a perfect fit for the job, and he’s been doing it ever since.
Bowles has now been a taxi driver for 15 years, putting over 400,000 miles on his 2005 GMC Yukon XL Denali for Yellow Cab of Charlottesville and rising to the position of driver manager.
“I think the taxi cab business is a good business,” Bowles says. “You can really make good money and you just drive. I don’t know where you can make this kind of money and all you got to do is drive.”
And yet, Bowles, like other taxi drivers in the city, often hears this question: “So what do you think about Uber and Lyft?”
The growth of ridesharing services in Charlottesville over the last five years has posed an unprecedented threat to the taxi industry. Mobile apps, a flood of new drivers, and a young generation drawn to accessibility has allowed companies like Uber and Lyft to corner a significant chunk of the market and begin to render the traditional taxi cab obsolete.
Uber made its way to Charlottesville in 2014, and Lyft followed two years later, both quickly becoming the top choices of UVA students and visitors to the area. This left many local taxi companies scrambling to stay afloat; they lost both customers and drivers to the ridesharing services and were forced to revisit their business models.
But five years after Uber first came to town, local taxi services have shifted their focus and adopted new approaches to the business. It’s a seismic change that’s occurred as a result of the reshuffle in priorities among different players in the transportation industry.
Prior to the ridesharing companies’ debuts, transportation businesses typically focused on one of three areas: taxis, limousines, or paratransit services. Each was profitable and there wasn’t much overlap, allowing all three segments to thrive in their individual markets. But when Uber siphoned off a majority of local taxi drivers’ cash-based trips, their dispatchers were forced to broaden their view.
“The industry is far more diverse than it ever has been,” says John Boit, executive vice president of the Transportation Alliance trade organization (formerly the Taxicab, Limousine & Paratransit Association). “Basically, if it involves moving people around from A to B, these companies are looking at everything. Whereas 30 years ago, taxi companies would’ve just said, ‘Well, we’re just going to run taxis and pick up people who hail us on the street or call us directly for a ride.’”
‘Either deregulate us…or regulate them’
When Will van der Linde got into the taxi business in 2012, he bought out a company still stuck in the analog era. The Charlottesville native had never worked with taxis before, but alongside partner Mark Brown, he sought to help Yellow Cab catch up to the 21st century. The partners ditched ham radios in favor of a digital GPS-based dispatch system and added credit card machines in all the company’s vehicles. They also launched an app, called Taxi Magic, that they used for about a year.
Van der Linde, who’s a member of the Transportation Alliance, says he saw Yellow Cab experience tremendous growth in his first few years as part-owner. Even after he bought out Brown and his other investors in 2015, the taxi company remained profitable thanks to its contracts with UVA and social services, particularly by providing non-emergency medical transportation. It’s since merged with eight other Virginia taxi companies to form the Old Dominion Transportation Group.
But when Uber and Lyft began to erode his customer base, van der Linde became weary of the restrictions preventing his company from competing with the ridesharing services.
“The thing that we’ve always petitioned for is either deregulate us as a taxi business or regulate them,” van der Linde says.
In order for a taxi dispatch service to operate in Charlottesville, it must first purchase Virginia operating authority registration and license each vehicle as a taxi with the state, which requires specialized license plates. Before you can install those plates, however, each vehicle must be insured through 24/7 commercial liability insurance. This is an expensive policy that requires the company to cover a significant amount of damages regardless of whether or not a customer is in the car.
Once the dispatch service has its fleet licensed and insured, it can lease vehicles to drivers. But those drivers can’t start giving rides right away.
First, they have to pass a background check with the Charlottesville Police Department and complete a taxi driving test. Many companies like Yellow Cab also require drivers to take a drug test with the Department of Transportation. If they’re using their own car or the company hasn’t done it for them, drivers also must have their vehicle inspected by the police department in addition to getting the standard state inspection sticker.
The driver then can hit the road, but if he wants to participate in the lucrative non-emergency transit contracts, many medical accounts require drivers to pass a passenger safety course. Finally, once drivers begin collecting fares for their services, they’re responsible for paying taxes to both the state and city of Charlottesville and paying Yellow Cab leasing and dispatch fees.
Even for people who purchase their own car and operate as independent taxi drivers rather than work with companies like Yellow Cab, the entire process is expensive and can take up to a month. Although taxi drivers earn a much higher commission on rides than Uber or Lyft operators do, it’s a significant investment.
Uber and Lyft drivers also have to pass background and driving record checks, but they aren’t required to pay for any driving tests or register with the Virginia DMV.
Murphy McGill and Gerald Harvey work for both Uber and Lyft. They each say they were approved by Uber to drive within two weeks, and that Lyft took only one or two days.
It’s been frustrating for van der Linde to see customers choose ridesharing services over his taxi company despite the regulations he has to abide by. It makes sense to him when someone chooses one of the popular apps because they’re quicker for completing a short-distance trip, but sometimes that’s not even the case.
“It’s really sad. I’ll show up at the Charlottesville airport and we have two taxis sitting right…in front of arrivals and we have a $25 flat rate [to anywhere in town],” van der Linde says. “But somebody will stand there on their app in front of our drivers and they’ll wait 10, 15 minutes for an Uber to come up when they could just ride with us.”
There are also times when taxi cabs are cheaper than ridesharing services, such as holidays and some weekends. Uber and Lyft benefit from surge pricing (higher fares at busy times), but taxi companies in Charlottesville must let the city know 30 days in advance when they want to change their prices.
As for drivers, McGill says he would never drive a taxi cab because “it’s like a full-time job and I’m a family man, I can’t do that.” Harvey, who’s been driving since December 2016, enjoys the flexibility as well. Taxi drivers can certainly make more money, but it takes a level of commitment to driving that not many people are willing to make.
‘If you do your job at the best of your ability, you have no competition’
On average, Yellow Cab’s Bowles works six days a week, 13 hours a day—sometimes making as much as $2,000 in a week. He’s built up a base of regulars who still choose him over ridesharing services because he’s respectful and friendly, he says. Bowles says some people also don’t trust Uber or Lyft because of the sheer number of drivers they employ—it’s tougher to monitor that many drivers, and recent cases of ridesharing operators in different parts of the country being arrested on murder or rape charges have left some people uneasy.
Harvey, the Uber and Lyft driver, says Charlottesville police officers do conduct “courtesy checks,” pulling over ridesharing drivers at random and checking their credentials in an effort to keep the public safe.
However, Bowles says “there’s people [now] driving for Uber and Lyft that we had to stop dispatching to for serious reasons.” Yellow Cab has decommissioned drivers who were caught attempting fraud or treating riders poorly. Bowles says he’s also concerned about the amount of rider information Uber and Lyft drivers have.
Yellow Cab uses an app called iCabbie to dispatch rides to its drivers. Using a tablet set up in the vehicle (another expense for drivers), the taxi driver can accept rides but isn’t given any of the personal information for the customer other than their name. When the driver arrives at the pick-up point, he presses a button on the tablet that lets the customer know the car is outside. If he needs to contact the rider, that’s done through the dispatcher so the driver never gets the customer’s phone number.
But many riders, including UVA students, either don’t know about these safety features or are more concerned about accessibility and convenience. Yellow Cab’s Riide app, which customers can download to book a trip, isn’t user-friendly, and some riders have complained about long wait times before being picked up.
To make up for the loss in customers, Yellow Cab has signed contracts over the last few years that allow it to provide non-emergency medical transportation. They serve riders like 67-year-old Hortensia Cruz, a former nurse from Puerto Rico who moved to Charlottesville nearly two decades ago to be treated for a rare medical condition at UVA’s Emily Couric Clinical Cancer Center. Cruz has ridden with Bowles several times and is charged a $6 flat rate every time she takes a Yellow Cab to or from one of her appointments.
“I ride Yellow Cab a lot,” Cruz says. “I have lots of appointments, sometimes more than I can handle.”
There are many Charlottesville residents like Cruz, and they’ve provided a stable number of daily customers for Bowles and other Yellow Cab drivers.
So despite the number of students and visitors who have ditched cab companies in favor of ridesharing services, Bowles isn’t worried about the future of taxi services in Charlottesville. Like many independent drivers, he relies on his network of regular customers.
“I’m going to tell you something my dad taught me when I was a kid: If you do your job at the best of your ability, you have no competition,” he says.
‘There is a threat to this funding’
As important as non-emergency medical transportation has become for taxi services like Yellow Cab, there’s no guarantee that it’ll stick around forever. Medicaid laws currently require states to set aside funding for such rides, but Congress has discussed removing that requirement, and allowing states to decide whether or not to provide it.
Although the Centers for Medicare & Medicaid Services has pushed back its plan to consider stripping the requirement to 2021, the Transportation Alliance has lobbyists on Capitol Hill who are aiming to persuade lawmakers to continue providing this funding.
Ridesharing companies are also trying to get their piece of the pie through programs like Uber Health and Lyft Concierge. As a result, many taxi companies are expanding to multiple services like shuttles and luxury vehicle rides to help broaden their customer base as much as possible.
“Many companies have moved away from thinking of themselves as taxi companies, and they’ve moved into looking at themselves as transportation companies—and that really is a big distinction in this…industry,” Boit says. “I’m seeing an increasing number of companies who are not even using the word ‘taxi’ in their name. They’ve completely rebranded.”
In Charlottesville, Jefferson Area United Transportation (JAUNT) has provided shuttle service for disabled residents of the city and surrounding counties for both medical and recreational trips since 1975. Chief Executive Officer Brad Sheffield says he’s seen the demand for paratransit rides spike over the last few years, paving the way for both JAUNT and taxi services to have success in the market.
As taxi services continue to try and adapt to the ever-changing landscape of the transportation industry, their biggest focus is staying ahead of the technology. Uber and Lyft took advantage of a lack of forward-thinking among the thousands of taxicab companies around the world.
Now that they’ve shifted their approach in favor of new business models, taxi services are hoping to change the narrative around ridesharing services’ control of the transportation industry. Perhaps when riders get into Uber and Lyft vehicles, they’ll start asking a new question.
“So what do you think about taxis?”
On a recent weekday afternoon, we took the same 1.5-mile trip across Charlottesville with Uber, Lyft, and Yellow Cab. Here’s how the services stacked up.
Booking fee: $2.90
Trip fare: $5.20
Driver receives: $4.88
Wait time: 5 minutes
Base fare: $2
Minimum fee: $2
Trip fare: $4.66
Driver receives: $3.63
Wait time: 8 minutes
Base fair: $2
Convenience fee: $1
Trip fare: $4.40
Driver receives: $7.40
Wait time: 11 minutes
Each service also lets riders know how to identify the car that will pick them up. Uber and Lyft send push notifications to the rider’s phone, while Yellow Cab shoots them a text.