
UberCab to disrupt the Taxi/Limo business - yish
http://techcrunch.com/2010/08/31/what-if-ubercab-pulls-an-airbnb-taxi-business-could-finally-get-some-disruption/
======
keltex
Sound like a nice idea, but unfortunately taxis are a regulated industry in
most major cities (e.g. NYC, Boston, Chicago). The difference between a taxi
and non-taxi are usually that a taxi license or medallion is required in order
to legally stop for somebody hailing down a cab on a street.

If this service became at all popular, it is very likely that cities would
immediately include "mobile hailing" as also requiring a license. The
entrenched interests of the taxi companies are simply too big (and they have
the political clout) to let this one slide under the radar.

~~~
patio11
Medallions are a conspiracy against the public, especially the poor and
minorities, who both are disproportionately refused cab service and prevented
from lawfully pursuing a value-creating occupation in their communities which
requires only modest capital and no special training.

See also hairdressing regulations and a host of others.

I could be persuaded there exists an optimum amount of regulation for
compensated car rides north of that for uncompensated car rides, but
medallions have to go. With market values in the six figures though, good
luck: holders have solid incentives for corruption like their lives depend on
it, but the average citizen just gets minority overcharged, and the worst
affected do not vote or matter in most political calculuses.

~~~
tptacek
Disagree. The policies behind medallions may be stupid and unfair, but their
existence provides a mechanism of accountability (you can lose them, and
they're hellaciously expensive) that doesn't exist with iPhone dispatch.

It doesn't surprise you that cab drivers in Chicago basically never drive you
to random destinations, or change fares midway through the ride? The goodness
of cab driver hearts isn't what's preventing it.

~~~
patio11
I do more of my traveling from airport to suburbs than inside the city, so I
get to use a car service. It is pretty simple: I call American Taxi (by way of
Bangalore), they send me an Eastern European immigrant with a car, and he
whisks me home for the published flat fee.

Their incentive to not screw me is that they value my continued custom (and
chargebacks are a beast). His incentive to not screw me is that he values his
cell phone continuing to buzz with new fares. They transparently operate in a
low-trust environment: there are cards in the back of the back of the car for
who to call for a refund in event of a dispute.

Putting this on an iPhone makes it geekier, but does not appear to change the
threat model. No medallion, and pretty close to a technolibertarian paradise.
I feel the need to illegalize something to wipe that smug look off their
faces. :)

Sadly, they are legally prohibited from offering exactly the same service if
both endpoints are within Chicago proper.

~~~
tptacek
Putting it on the iPhone scales the process up. Some things work fine at
Patrick McKenzie scales, but not so fine at 40 fares per day per cab. There is
immense competition for airport fares (it's one of the big problems with cab
service in SF) and more incentive not to play games. The same can't be said of
random fares on city streets.

The only time I've ever been screwed with by a cab driver was with an
unlicensed car service.

~~~
patio11
American Taxi dispatches forty thousand fares a week. They're a wee bit bigger
than me.

~~~
tptacek
Come on, Patrick. American Taxi is pretty much the cab company for all of the
Chicago suburbs. You think they do 40k fares to/from ORD? That's 500 fares an
hour.

There's a difference between airport taxi service by chauffeur-licensed
drivers dispatched by a branded cab company (with something to lose if drivers
misbehave) and "I signed up with 1 of 5 different companies that dispatch cabs
with iPhones".

I don't have prove that the Chicago medallion system is sensible; I'm only
objecting to the notion that there is no valid concern behind them other than
for-profit restraint of trade. There are absolutely valid concerns behind
medallions. Go to an NYC airport or outside Penn Station and find an
unlicensed cab; take 10 drives, and tell me how many of them try to screw you
over. Do the same thing with medallion drivers; _none_ of them will.

~~~
CWuestefeld
Medallions serve to limit who is allowed to provide the service. There is no
need for this limitation in order to ensure honest service.

For example, cabs could earn (and risk losing) a "Good Cabdriving Seal".
There's no need for the quantity of such seals to be artificially limited:
they could be unlimited, but only awarded to those that prove worthy.

And while we're at it, the agency doing the certification need not be a
government agency at all. Why not _Good Housekeeping_ , or _Underwriters
Laboratories_ , or _Better Business Bureau_?

~~~
maxawaytoolong
Only the government has authority to do something to the cab driver, though.
The Better Business Bureau can't tell you to stop driving your cab.

The medaillion system is weird, but it works in new york.

The people who think that the invisible hand of the market would improve cab
service are awesomely naive. The reason why cabs aren't fucked up in NYC is
because of all the regulations, which can only be enforced because the cabbies
have something to lose (the mediallion). If there was no government
interference, cabs still wouldn't take credit cards, they wouldn't pick up
non-white people, they wouldn't drive you to Brooklyn, they would form their
own cabal and eventually rip out their meters and just make up whatever price
they wanted to charge you, once you got there.

~~~
CWuestefeld
You're only saying that they work in NYC because you're taking for granted all
of the failures. For example, how many times have you said "where's a cab when
you need one?"?

 _because of all the regulations, which can only be enforced because the
cabbies have something to lose_

You think that the loss of the "Good Housekeeping Seal of Approval", or "UL
Certification", or the like is nothing? Don't you think that potential
customers would quickly learn to look for that emblem on a cab?

 _If there was no government interference, cabs still wouldn't_

Nonsense. You're just making stuff up, without the slightest evidence. Do you
_really_ believe that cab customers would turn away paying customers just
because they're not white? And even if they did, that would just open an
opportunity for a minority-catering company to make a killing.

~~~
maxawaytoolong
_For example, how many times have you said "where's a cab when you need
one?"?_

In Manhattan? Never. (but I've never tried to get a cab in Harlem or north of
that)

 _You think that the loss of the "Good Housekeeping Seal of Approval", or "UL
Certification", or the like is nothing? Don't you think that potential
customers would quickly learn to look for that emblem on a cab?_

Are you serious? The only thing people look for is if the cab is yellow.

 _Nonsense. You're just making stuff up, without the slightest evidence._

I'm not just making stuff up, those are all things that cab drivers used to do
until the city told them to stop doing those things.

 _Do you really believe that cab customers would turn away paying customers
just because they're not white?_

Yes.

 _And even if they did, that would just open an opportunity for a minority-
catering company to make a killing._

Do you live in New York? There already are car services, livery cars and gypsy
cabs.

------
smoody
a friend of a good friend of mine was brutally raped by an independent Lincoln
Town Car licensed driver (in NYC). I would advise (my personal opinion) women
to avoid such services and deal with the hassle of getting a cab. Getting into
a stranger's car and closing the door behind you is an action that should not
be taken lightly. That is why I always take a taxi or use a well-established
car service (as in substantial with a fleet of cars) instead of trusting
someone who is able to drive you around because he/she filled out an
application and leased a fancy black car. At least there is some
accountability with taxi and fleet drivers. And unless UberCab does serious
due dilligence on their drivers (perhaps they do?), I would stay away from
this service (again, if I were a woman).

Edit: Please note that I do not mean to imply that all car drivers are bad
people. I am confident that the majority of them are good, honest people
trying to make a living the best way they can.

~~~
grandalf
It seems that the rating system might have prevented this... maybe others
thought the driver was "creepy", etc. and might have given him/her a bad
rating, which might have dissuaded your friend from choosing his/her car.

~~~
yummyfajitas
Certainly the fact that the driver is completely traceable (more so than a
yellow cab driver) would dissuade most criminally inclined cabbies.

~~~
sprout
I don't think you're at all correct that they are less traceable than yellow
cab drivers. The government bureaucracy makes it much more difficult to fake
credentials and make yourself untraceable.

With UberCab, it looks like anyone could steal an iPhone/credit card, download
the app, and sign up as a driver all in the space of an hour.

~~~
yummyfajitas
I think you wrote "less" when you mean "more". Assuming that's what you meant,
I disagree. From their website, it looks as if UberCab requires drivers to be
a livery company, so gov credentials are required either way.

The only way I can see the stolen iphone game working is if you steal the
iphone from an UberCab driver, or convince UberCab that you are an independent
livery and then rape someone before the stolen iphone gets cut off.

In contrast, a legitimate yellow cabbie just needs to put his coat on top of
the taxi license and make sure the victim doesn't see his license plate # as
he drives away. That same game won't work with a legitimate UberCabbie, since
there is an electronic record that driver X picked up passenger Y.

~~~
grandalf
True. I think it's common for the owner of a medallion to let someone else
drive the car illegally.

------
jtbigwoo
Driving a gypsy cab (which is what ubercab is) is a dangerous business. In the
90's, New York averaged something like 2 murdered cabbies a month. And those
drivers were only being robbed for a small amount of cash.

This application could be very attractive for car jackers. A bad guy could
simply place and order for an out-of-the-way alley or warehouse and know that
the cabbie they hail is going to be driving a really nice car.

A would-be car jacker would need to use a stolen iPhone and credit card in
order to keep from getting caught right away, but that's hardly an
insurmountable barrier.

~~~
bravura
Your comment is specious.

 _In the 90's, New York averaged something like 2 murdered cabbies a month._

Uh... NYC was a dangerous place in the mid 90's. Do you have evidence that the
gypsy cabs were targets more than yellow cabs?

It's not the gypsy cabs that were the problem, it was the customers.

 _A would-be car jacker would need to use a stolen iPhone and credit card in
order to keep from getting caught right away, but that's hardly an
insurmountable barrier._

In that case, UberCab would need a stronger way to identify users. For
example, you enter the cab, and the cabbie takes a photo of you with his
iPhone UberCab app and uploads first thing.

~~~
jtbigwoo
_Uh... NYC was a dangerous place in the mid 90's. Do you have evidence that
the gypsy cabs were targets more than yellow cabs?_

Yep. <http://www.taxi-library.org/marosi.htm>

"Out of the 85 total cab drivers killed in 1992 and 1993, for instance, only
12 drove yellow cabs."

The difference here is that gypsy cab drivers work in more dangerous
neighborhoods that are underserved by big taxi companies. I suppose ubercab
drivers could just avoid those same neighborhoods...

------
far33d
I used cabulous to hail a cab in San Francisco this weekend. Very similar
service, but uses medallion taxis with regular meter rates. You have to pay
the driver normally. It was a great experience and I imagine these types of
services will be commodity eventually.

------
joshwa
Here's a great article on the biggest car service in Brooklyn-- Arecibo (their
base station is around the corner from where I live). Many interesting details
about the economics, technology, and politics of the livery business in NYC:

<http://nymag.com/print/?/news/features/54678/>

From a safety perspective, in NYC it's illegal (and not a good idea) to hail a
non-yellow-medallioned taxi on the street. They likely don't have a TLC
license, and may or may not be affiliated with a larger fleet.

Call the service's base station--they might not perform background checks on
the drivers, but they'll be licensed and insured. The services have an
incentive to weed out the bad drivers-- if they get a reputation for spotty
service or creepy guys, then customers will switch to the car service down the
block (there is healthy competition in this market-- they are constantly
splitting off and trying to poach each others' drivers).

------
tmsh
Just thinking about what forces might prevent the industry from being
disrupted (regardless of whether/how this is good for the public):

I think the biggest innovation is the drivers rating the customers. It seems
like a joke, but if you think about it, professional car service drivers
aren't going to want to pick up just anybody for short rides. That's the real
obstacle for scalability among that group. The obstacle for getting all cab
drivers to join UberCab is probably the risk of alienating the customer base
that might just want town cars, etc., without having to think about the
complexity (i.e., it's a software problem, and a pretty easy software problem
if done right). The other obstacle is the cost of an iphone, etc., for cab
drivers. The obstacles for anybody with a car to join are medallions,
licenses, etc., as mentioned. The other obstacle is, even with licenses, the
fairness and effectiveness of the rating system is tough. Service history is a
mixed blessing. When I step into a cab, I may not actually want to know about
the driver's history. I may just want a nearly 100% guaranteed level of
service (which theoretically the medallions provide). Though on the other hand
it would be crazy to see like average on-time trips, average speeds, customer
satisfactions, etc., in one big visual thumbprint before you step into a
cab...

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sethg
Is “everyone could be a cabbie” really such a lucrative prospect, from the
drivers’ point of view? My understanding is that when you take into account
the uncertainty of income, the fixed cost of leasing and maintaining a cab (of
course, part of this is the cost of leasing the medallion), and the risk of
passengers attacking you or simply not paying, cab drivers don’t net that much
money... which may be one reason why, at least in Boston and NYC, cabbies tend
to be immigrants.

------
jlees
I'd think of this as more on-demand towncar than a new type of taxi-disrupting
the limo business rings far more true. For the slightly upscale customer who
wants privacy and looks and can pay a bit more. And not for women, dear god
no. But women don't use technology anyway, right?

I was thinking about a similar idea and also the parallel concept of "AirBnB
for passenger seats", rather than unused towncar inventory, an easier way to
"book" a carpool ride from someone who's already going that way. You just run
into a ton of tangles around insurance, carpooling vs taxi licenses, scaling
especially abroad, and the fact that _one_ bad driver - one accident - could
completely ruin your entire business.

I do think there's potential in disrupting the taxi business, though my
current angle of thought is more about using technology, especially cleantech
and mobile bookings, to make it a low cost planet-friendly business. Just the
thought of all those exhaust fumes scares me. Go EcoTaxis!

------
jonknee
The first time an UberCab driver gets into a wreck without insurance or
licensing should be interesting. I can see this being very useful for
legitimate car services, but they need to do serious due diligence to make
sure their drivers are legitimate. Mike's dream of anyone becoming an UberCab
driver would be a legal nightmare.

------
kijuhyujk
The taxi medalion is a little more than a price fix in some cities, such as
London.

Buying from somebody wih a zero rep on ebay means you might lose out on your
beanie baby. Putting your daughter in a random strangers car with no
information other than them owning (or having stolen) an iphone is a little
different.

~~~
amirmc
Very good point about (potential) stolen iPhones but your argument still
applies to the current system. It's still a stranger in a car, they just
happen to be sent under the banner of a company.

If the taxi firm itself implemented (or used a version) of this kind of
service then that could be a great win for the firm.

------
tlrobinson
I've tried Ubercab a bunch of times, and the two times I actualy got a cab
were a good experience. It's really nice not having to fumble with cash or a
card for payment. Plus you get to ride in a towncar/SUV/etc. It is a bit more
expensive though.

------
yardie
It's a cool idea. And an evolution of black car service (they have to be
called and don't normally solicit for work).

As like any other hire service, they operate under a difference set of rules.
They have to be licensed, need to meet size requirements, and they have to
carry much more insurance.

Some random driver with a pickup and just basic PIP coverage probably wouldn't
be a good choice. Especially if you are paying for it.

Also, reading their website, they are very interested in working with limo
companies and cab services not random guy with 30 minutes to spare. So no,
this is not like AirBNB, at all.

------
amirmc
It'll be really interesting to how much disintermediation takes place as a
result of UberCab. I expect they'd need to expand beyond iOS to get scale but
that should be possible.

In the UK there are lots of regulations surrounding Private Hire vehicles and
Taxis, some of those rules are regional too. I doubt I'd see something, like
this here but the firms should definitely be aware.

------
obiefernandez
Various commenters are saying that cities would simply define "mobile hailing"
as also requiring a license. Okay, maybe, but would it matter? How would it be
enforced? And could any particular city hold UberCab liable? Enough to force
them to stop?

The whole concept sounds particularly disruptive because it seems that it
would be so difficult to police.

~~~
yardie
If the cabbies complain loud enough I'm sure they can set up a sting. Nothing
stopping them from downloading the same app and hailing a ubercab. When you
can't present a medallion or commercial drivers license you're busted.

And there is nothing stopping them from going into court and throwing water on
the whole thing with an injunction.

------
ari_
This may work in SFO. But does anyone know if the town car companies in NYC
(Dial 7, Carmel etc etc etc) have overcapacity issues?

In the everyone is a taxi model- do you really want to get into a car without
knowing how that person drives? There are people in my own family I won't
drive with, let alone pay them to drive me somewhere.

~~~
grandalf
The argument about not knowing how someone drives applies to any bus, taxi,
etc., regardless of how it was booked so long as you haven't ridden with the
driver before.

------
maxawaytoolong
This will work in SF because taxis don't do a good job for the class of people
who own iPhones. In NYC, the class of people who own iPhones are already well-
served by cabs.

------
nickpinkston
I worry about them getting AirBnB'ed. I'm a big fan of AirBnB and CS, and I've
often thought I'd be happy to do a fare when I've got a hour or so between
meetings.

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ccarpenterg
I thought about building something like this.

 _Pay from the app: No cash required_

That's a powerful feature and it could become a very sticky app for me if I
lived in San Francisco.

------
javan
It's illegal to drive and text message in California; their drivers more or
less have to break the law to participate.

------
mkramlich
what I like about this is the rider has an iPhone so while the cabbie is
transporting him the rider can see the Google Maps routing path, and compare
that to the actual position and route the cabbie is taking. If they differ
significantly the rider can know he's getting scammed. Technically the rider
could do this without UberTaxi as long as he has an iPhone, but since UberTaxi
depends on the rider having an iPhone app, it comes along for free.

------
mkramlich
this is practical innovation. we need more startups like this.

