Giorgio: Make Way for Uber
Wednesday, April 29, 2015
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
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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