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Giorgio: Make Way for Uber

Wednesday, April 29, 2015

 

Last Friday the Baker Administration released proposed regulations for ride sharing companies such as Uber. Uber is a company that works like a taxi company, but without the regulations. The new technology allows a customer to use an app on their smart phone to find a ride in the area. Currently, because the technology is so new there are no government regulations on this new industry.

Traditional cab companies, on the other hand are heavily regulated by both the state and local governments. On the state level cab companies come under the jurisdiction of the State Department of Public Utilities, much like utility companies. Cab companies are in essence a monopoly. Local jurisdiction varies. In Boston, for example they have a whole division set up to regulate cabbies. In Worcester, this is done by the Worcester Police Department License Division, which also oversees liqueur law violations.

In Worcester, we have two primary cab companies, Red Cab and Yellow Cab. Although, I have recently seen a Green Cab roaming the city streets. I wasn’t sure if that was the cab color or an environmental statement.

Cab Companies are Under Attack

The traditional cab companies have been under attack for several years. First by livery companies. These, mostly black town cars were initially set up as limo companies, but in the past 5 years they have branched out into picking up passengers, much like cabs. Municipalities moved to put regulations into effect to halt this practice and protect the cabbies.

The cab industry is facing the same battles that the liquor industry faced a generation ago. Liquor licenses used to have value, because their numbers where limited. Not so today in big cities.

Cabs are limited and most cab companies had to pay big money for a taxi medallion. Cab drivers have to have a million dollars’ worth of liability insurance and cabbies must undergo background checks.

No Rules for Ride Sharing

These rules don’t apply to ride sharing companies. In interview after interview Uber drivers have declined to give their names, for fear that their auto insurance will be cancelled. Uber has also had their share of problems with drivers. They made the news last year when an Uber driver allegedly raped a customer.

Governor Baker’s regulations seek to solve these problems. They require each driver to carry a million dollar policy on their car and to have the drivers undergo background checks.

These regulations create space in the industry for companies like Uber.

What is Driving People to Uber?

But the old line cab companies need to answer a fundamental question. What is driving people to Uber, especially younger people?

Is it the slightly lower cost? Is it that Uber is cool and cabs are not? Is it that the Uber cars are cleaner and their drivers look professional? In Worcester, we had to pass some rules a few years ago, just to get cab drivers to wear collared shirts. Is it the app that you can download to your smartphone?

I believe it is all four-Uber is cool, have clean cars, cost less and you can find one. The traditional cab companies need to adapt to the times. They need to clean up their act.

Technology is changing the way we do business. The internet has taken over from print newspapers and apps and companies like Uber will put traditional cab companies under a great deal of pressure.

There is space in the marketplace for bot. Cab companies must change with the times. They need to be hip and competitive. They can do that. It just takes a little imagination. One change they could make easily is to turn their cabs into moving pieces of art. They could still use red or yellow as the primary color, but make the cabs hip.

 

Related Slideshow: UBER vs. Taxi Experience in Worcester

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1. Ordering

Taxis:For both reporters, ordering a taxi in Worcester was a headache. Using the New Worcester Yellow Cab App, one reporter ordered a cab at 10:48AM.  At 11:12AM, Cab #41 was assigned, for a total order wait time of 24 minutes. And that was only for a cab to be assigned, it does not include the time it took for the cab to arrive.

Red Cab does not have an app. It has a mobile site with a telephone number. The first call was 22 rings before the call failed. The second call was 16 rings before anyone answered.

Uber: Using the Uber app, ordering was easy. For both reporters, it took less than a minute to order.

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2. Pick-Up

Taxis: For the Worcester Yellow Cab reporter, at 11:15AM, Cab #41 drove past the reporter and parked two blocks away.  Apparently realizing his mistake, the cab driver picked the reporter up at 11:19AM, on the opposite side of Shrewsbury Street (31 Minutes from the time the reporter ordered the cab).

The Red Cab took eight minutes to arrive to location.

Uber: On average, the reporters only had to wait six minutes for a Uber car to arrive. When Uber arrived, they picked the reporters up right at the curb. 

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3. Cleanliness

Taxis: Both taxis had dirty mats, and their upholstery was worn out. However, both vehicles were at least ten years old.  

Uber: Although clean, the inside of the Uber vehicles were both pretty worn. One Uber vehicle was a new Nissan Altima. The other Uber vehicle was an older Toyota Camry.

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4. Driving

As shown in the videos, all four rides were safe and slow. The only problem was Yellow Cab’s decision to take a longer route to Holy Cross. All drivers were friendly and talkative and they all had a good estimate of fares from point A to point B.

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5. Cost

As mentioned, each driver had a good idea of what it would cost for a ride from Shrewsbury Street to Holy Cross and back. However, the cabs were nearly twice as much as Uber. The total cost of the cabs was $28, while Uber only cost the reporters a combined $17.

In one instance, the Uber driver knew ahead of time that construction was being done on an I-290 on-ramp near Holy Cross. As the Uber driver put it, “if they weren’t doing that work, this would’ve been even cheaper.”

See video here:

 

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6. Service

All drivers from both Uber and local Worcester taxi companies were very professional and friendly. Upon arrival, each driver asked said "Hello," and asked the reporters how their day was going. All four drivers made sure destinations were exact and upon reaching those destinations wished the reporters a "Happy Thanksgiving."

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7. Overall Experience

Although all four drivers were friendly and professional, the experience with Uber drivers stood out the most.

Uber was cheaper, faster, cleaner and provided fare cost up front.

The Uber app was much easier to use than Worcester Yellow Cab's app and the Uber drivers showed up much quicker than local Worcester taxis. 

GoLocal Worcester Recommends: UBER

See video here:

 

 
 

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