In this day and age taxis are facing more and more competition from the likes of apps such as Uber and Lyft, where users can order up a “ride” through their smartphone with everyday people picking you up in their cars. Part of the new system is the “surge” calculation, something that Lyft removed from their fares without telling a single user.
The surge system is an automated system which increases the prices of rides when the system is swarmed with people ordering rides. Uber recently stated that it wouldn’t raise their prices more than 3.9 times when the DC metro was shut down, a policy that Lyft has had for a while, capping their prices at 3x the standard rate. This policy is now gone, with Lyft removing the surge back in February, but not everyone was aware.
Lyft told its drivers that its caps would be removed, but failed to disclose the information to its users. The argument is going that higher prices would encourage more drivers to pick up users, possibly increasing the number of people offering lifts via the app.
Trying to support drivers is always a nice move, but if it’s going to cost users money they may find the services less appealing and instead go back to classic taxi services.
When it comes to “ridesharing” apps like Uber and Lyft, the law has been slow to catch up on the latest app-driven taxi scheme. Debating if they are consultants or employees, cities have been torn apart as Taxi drivers argue that they use loopholes to avoid extra charges that Taxis have to pay. This may change thanks to San Francisco now requiring Uber and Lyft drivers to own a business permit if they want to keep working within the city.
City Treasurer Jose Cisneros has apparently sent out 37,018 letters to drivers within the city to let them know about the new requirement, ultimately forcing Uber and Lyft to either recognise their drivers as staff or get business permits and act as contractors. With each permit costing only $91 a year (if you make less than $100,00 a year) then the funding coming in from the new requirement comes to around $3.37 million a year!
Uber responded in a statement to SFGate saying that as its drivers were independent contracts they were “responsible for following appropriate local requirements” while Lyfts spokesperson Chelsea Wilson was less than candid in saying that their company opposed thew new plans, saying that the company has “serious concerns with the city’s plan to collect and display Lyft drivers’ personal information in a publicly available database”.
Have you gotten on the Uber or Lyft craze yet? New reports have just come to light that thanks to these new offerings, Taxi business has been majorly disrupted due to the new their technological advantages and pricing structures.
It’s a common complaint in much of the Western world, users upset that their taxi and/or driver is one, or a combination of: smelly, late, unsightly, rude, knowledgeable or in disrepair. Ride-share apps like Lyft and Uber have been designed to take these short-distance travels into a more personable situation.
According to a New York Times analysis, owning a taxi service has become less worthy in recent times. They claim that price of medallions have plummeted sharply over 2014, seeing the price drop by 17-20 percent within major US cities such as Boston, Chicago and New York. This is alongside news that Philadelphia has cut their prices to the customer drastically and half of New York’s most recent sales have been foreclosures.
Unfortunately there isn’t a 100 percent straight link between the Taxi service plummeting and ride sharing app business because of no reported ride numbers released, however it gives us insight into the taxi industries performance as a whole. As far as the local market is concerned here in Australia, many of my friends are taking the application plunge – seeing them utilize services like Uber for hotel to airport transfers and a safe ride home after a night of partying. Although Australian Uber prices are can be slightly higher than that of the localized taxi business, users are happy to bear the cost due to the improved benefits and claimed safety aspects.
Do you agree with these claims? Are Taxi’s going out of business due to public transport or own methods, or are they seeing a downturn due to their nature?