Cab Driver Stories: Taxis versus Uber, Part II

THE TAXI PROBLEM

Taxis have a bad image.  My friend Matt travels a lot and thus uses hired-cars to get to and from airports.  He makes the sweeping generalization that, ”Taxis are awful.” In his experience they probably are. And whether that is absolutely true in every city or not, it has become conventional wisdom. To wit: Taxis are beat-up, uncomfortable, smelly cars driven maniacally by foreigners with little command of the English language. Oh yeah, and taxis are super-expensive.

(I should point out that here in Pensacola our per-mile rate is $2.25. It's the cheapest in the state of Florida and hasn't been raised in over ten years.  Uber's per-mile rate is $.91 but they add on a bunch of extra fees, so you can't make a true apples-to-apples comparison.)

If you've ever operated a vehicle and had ten or fifteen different people get in during separate trips every day of the week, you'd understand why taxis are generally not brand-new in appearance or condition. They do get beat up by passengers who don't give a shit about them. People litter...they spill stuff...they get sick...they break things...they sometimes stink. It's why most cabs have spartan interiors made of heavy-duty materials. 

Additionally, taxis generally rack-up tons of miles per year...and nearly all of it is city-driving. It's a hard life for a car.  With my taxi (a 2006 Ford Freestar), even though I only worked three days per week I was still driving 3,000+ miles per month.  Now with Uber, it's even more.

Well why not just replace the cab every so often and keep a nice one on the road? Good question. But look, nobody is getting rich operating a cab. At most, you can average...if you're lucky...$1.00 per mile (your revenue divided by the total of all miles, revenue and “deadhead”). Big cities like New York and such where “deadhead” miles are fewer are the exception.  Here in Pensacola, the rule-of-thumb is revenue-out / deadhead-back.  So while you make $2.25 per mile with a passenger in the car, you're coming back empty the same distance, which makes your net revenue for that trip $1.12 per mile.  Add some cruising around between fares or deadheading to a dispatch pickup and your revenue-per-mile goes down even further.  For me it always remained right around $1.00/mile.

If your vehicle costs you $0.30/mile to operate, that doesn't leave much left over for profit and living expenses, never mind vehicle replacement. So unfortunately, most taxi companies keep their cars on the road as long as possible, sometimes longer. They delay or completely forego maintenance items like shock absorbers and oil changes, etc.

For us owner-operators, banks and credit unions don't like to finance taxis. ”We don't do commercial loans!” one particularly testy credit union loan officer told me back when I was buying my first cab. So in cities like Pensacola, drivers buy cheaper cars they can pay for in cash. Even the “big dog,” Yellow Cab has a large percentage of older cars in their fleet.

From the driver's perspective, you don't exactly need a college degree to do this job. No special training is required (other than learning and having an intimate knowledge of your city, and since the invention of GPS even that is no longer a prerequisite). Thus, cab driving attracts those who...let's be honest...may not be suited or even able to hold any other type of job. The pay and working conditions aren't great enough to attract those who might otherwise go to work for NASA. The end result is that you often get to ride to the airport driven by the dregs of society in claptrap beaters with meters.

If the cab even comes at all.

Here in Pensacola, when people call Yellow Cab for a ride, that company has, incredibly, stopped giving an ETA of when the driver will arrive! ”We'll get to you as soon as possible,” they say. Now there's some stellar customer service, no?

Add it all together and you have an unpleasant and undesirable situation for the potential passenger/customer. It is no wonder that taxis have such a bad reputation across the nation.

Then again, the paying passenger is not in the cab for very long – it's not like you're going to ride in the thing to California or become good friends with the driver. Most taxi trips are short. You want a limo? Hire a limo, you cheapskate.

THE RIDE-SHARE SOLUTION

When Uber/Lyft were invented, the emphasis was on nice cars. Uber initially claimed that they'd only allow cars that were no older than three years. That has been expanded to fifteen years here in Pensacola and many other cities. When I signed-up with Uber there was no vehicle inspection required of my car. Marketed as “Your own private driver,” Uber didn't exactly come out and promise a limo-like experience, but it was implied. And indeed, many Uber cars are nice, often higher-end late-model cars that are meticulously maintained by their proud owners.  Drivers were encouraged to be friendly, to offer water and snacks, and to play the kind of music the passenger liked to listen to.

Add to all that a cellphone app that works easily everywhere in the country...an app on which you can actually see on a little map on your phone the car that's coming to get you...an app that tells you the driver's name, his "star rating" and the license plate of his car...I mean, why wouldn't you use Uber instead of a regular ol' taxi?

Compared to traditional taxis, Uber was a breath of fresh air. Customers became infatuated with the new service.  They were lead to believe that it was really possible to get a "taxi" ride for less money in a nicer car...and that somehow Uber could make that work out.  The question is: Will the business model hold up? Or will we eventually see Uber cars become just like conventional taxis (i.e. more beat-up and just about the same cost) but with a better method of dispatch and payment? Time will tell.