From coast to coast and overseas, ride share companies like Uber and Lyft are kicking taxi ass, and taxi drivers are urging governments to impose restrictions on them. But this week, the city of Long Beach, Calif. took the opposite tack: encouraging taxis to operate more like ride share companies.
It's almost too simple. Because fares and other conditions for the taxi trade are regulated by municipalities, operators can't move with the market on pricing and ease of use. William Rouse, general manager of Long Beach Yellow Cab, the city’s sole licensed taxi operator, blames the decline in taxi ridership on “increased competition from businesses that don’t face the same regulatory burdens.” Read: Uber and Lyft.
Taxis in Long Beach, Calif. will soon be allowed to operate a lot more ride share services.... [+]
On the other hand, says Long Beach's Mayor Robert Garcia “Uber and Lyft are both popular in Long Beach,” and show no signs of going away. Throughout Long Beach's county of Los Angeles, locals say that ride sharing is transforming the local travel culture at lightning speed.
So working together with Yellow Cab, the city council of Long Beach (population: 469,000) this week approved a pilot program that removes taxis' fare floor, allowing Yellow Cab to discount fares as conditions warrant, comparable to ride sharing services' less expensive fares. The company will also get an ordering app, be allowed to increase its fleet size from 175 to 199 cars, and be permitted to add additional capacity at peak times.
Yellow Cab will also get a new branding identity, Yellow of Long Beach (note the missing word “cab”).
“Our hope is that this competition will provide more options for residents while allowing each of the companies to thrive,” Garcia says. Both the city council and taxi company say they're behind this program “100 percent.”
In Long Beach, “Yellow Cab reports that it has lost approximately 15% of its business over the past year,” Garcia said. A study by the business expense management company Certify found that among business travelers in the last year across America, taxi use fell from 52 percent to 32 percent, while Uber use rose from 9 percent to 29 percent.
Rouse notes that the city also has a stake in avoiding “tax losses for the city,” based on revenue from Yellow Cab's operations.
Long Beach appears to be the first city in the nation to take this novel approach, but, Garcia says, “We believe our approach, if successful, could be a national model.”
Protests by taxi drivers, meanwhile, continue to sweep the globe, most recently in Toronto and across Europe and Australia. The state legislature in Kansas effectively shut down Uber there earlier this month, although there are news reports of a compromise in the works that could bring it back.
In Long Beach, one big difference remains between taxis and ride shares: only taxis can pick up at Long Beach's airport.
