Local cabby decries global ridesharing company Uber
Rideshare company Uber launched locally last October, but cab companies didn’t really feel the squeeze until the holiday season, says Doug Rowell. Around then, cabbies of his acquaintance started struggling to make ends meet.
Rowell drives for Chico Yellow Cab. It’s his observation that, compared with just a few years back, visitors hardly call taxis anymore.
“We used to have every hotel in the city on desk calls—people calling the front desk and asking for cabs—and that’s completely dried up,” he said. “It’s the worst it’s been in my six years driving cabs here.”
Business first dipped a few years ago as Chico State’s party scene chilled out and, without as many kids to drive home from parties and bars, Rowell’s annual income—once around $50,000—took a big hit. “I lost $10,000 a year from that, before Uber came,” he said, “and now I’m looking at another 5- to 10-grand loss.”
Uber runs a mobile app that connects riders and drivers, lets both know one another’s location with GPS, charges the customer’s credit card, takes 5 percent to 25 percent of the fare and then direct-deposits the rest into the driver’s bank account. The San Francisco-based company launched in 2011 and has since spread to 65 countries. It is valued at $63 billion.
Cabbies everywhere have been feeling the impact, and some say Uber is another example of a big tech company trampling local businesses. To others, it’s deservedly on top of the innovation-driven free market.
Chico is by no means the only city grappling with ridesharing services such as Uber and Lyft—also known as “transportation network companies” (TNCs). Controversy and public pushback has been documented in cities as far-flung as Anchorage, Alaska, and Austin, Texas, but the business model continues to expand globally.
At Rowell’s request, the matter was discussed during the Chico City Council’s regular meeting on Tuesday (Aug. 2). City Attorney Vince Ewing presented a report on how some cities in California have dealt with TNCs and the concerns of cab companies—namely, that ridesharing drivers aren’t held to the same standards. Per city of Chico requirements, cabbies must acquire city licenses, permits and inspections, undergo drug tests mandated by state law, and submit to fingerprint background checks through the Chico Police Department. (Uber drivers aren’t drug-tested or fingerprinted, but undergo a background check based on their social security numbers.)
TNCs are regulated by the California Public Utilities Commission, which pre-empts any city laws, Ewing said. Taxi companies, on the other hand, are regulated at the local level. It might be easier, then, to level the playing field by loosening regulation of taxi companies rather than placing restrictions on ridesharing companies. Ewing’s report notes that Long Beach has lowered its fixed cab rates to encourage competition with TNCs, and Chico could do the same.
Chico Police Lt. Rob Merrifield said the council does, in fact, have the authority to fix cab fares if it so chooses. Currently, the base rate is $2.50, with each mile costing an additional $2.50, Rowell said. Uber’s base rate hovers around $1, and riders pay additional charges per mile and minute, but it all fluctuates depending on demand.
The council also discussed expediting Chico PD’s taxi-inspection process, which Rowell said can take weeks. Merrifield has been conducting the inspections himself for several months, and conceded there are sometimes delays, but not as lengthy as Rowell described.
“From the time we complete our process with paperwork to scheduling an inspection, it certainly isn’t taking weeks,” he said. “Once we have everything we need from the driver, we can schedule it within the week, typically.”
The council directed Ewing to further examine the city’s rules on cab companies and report back at a future meeting, but not before Councilwoman Reanette Fillmer added her 2 cents.
“You have to stay up on technology and innovation, and it may be time that taxi cab drivers get up to that,” she said. The city has a responsibility to look at “our more stringent policies,” she continued, “because we have to change with those times as well, but I don’t think it’s the place of the city to get involved with the innovation and what happens with Uber.”
Not everyone is complaining. For example, Liberty Cab, the biggest taxi company in Chico, has embraced technology as a way to stay ahead. It launched an app shortly before Uber came to town, and co-owner Gianni Caponera says it has helped set his company apart.
“We have about 450 users on it right now, very happy users who are able to rate their experience just like the Uber app,” he told the CN&R.
Rowell recognizes that the Web drives most new business for cab drivers. By that measure, the struggle is real: Chico Yellow Cab’s calls from Google searches are down 45 percent since October.
Staying competitive may prove an uphill battle. Lately, Rowell has been getting phone calls and emails from people who don’t understand the difference between Uber and taxis.
“There’s an overall lack of awareness,” he said, holding up his city-issued cab driver’s license. “Uber drivers don’t have one of these, and a lot of people are shocked when they hear that.”