Posted on 10/26/2015 8:09:33 AM PDT by SeekAndFind
Uber is crushing the taxi industry that has dominated New York City — and other cities — for so many years.
Data from the Taxi and Limousine Commission analyzed by the New York Daily News shows total trips in the first half of 2015 were down 10 percent to 77 million, compared to same period last year. Revenues from yellow cab fares have declined as well. And in July, there were 100,000 Uber trips in New York City per day, a 4x increase from last summer.
It's hard for taxis to compete with Uber, the ubiquitous car-hailing service said to be raising an additional $1 billion round of funding at a $60 to $70 billion valuation.
But a new startup called Karhoo is hoping to give taxi drivers in several cities a leg up.
Karhoo, a 10-month-old startup that won't launch until January 2016, has raised a $250 million round of funding, with plans to raise more than $1 billion in capital. Karhoo works with licensed taxi companies to let you hitch a ride from any number of taxi services, the FT reports.
In New York City, Karhoo is working with for-hire vehicle companies like Dial 7 and Carmel. In the UK, it's partnering up with minicab company Addison Lee. Karhoo will launch in three cities in January: New York, London, and Singapore.
Its investors so far include Nick Gatfield, the former CEO of Sony Music Entertainment, and David Kowitz, the cofounder of hedge fund Indus Capital Partners.
(Excerpt) Read more at businessinsider.com ...
The big news here isn’t that passengers get lower fairs and drivers who speak English, it is the crash in pricing for the cab medallions which means less government revenue.
Competition is good. Not earth-shattering news for us, but a shock to many in our current US of A.
Maybe off topic, but how is it that, in so many cities, the foreign born are the ones driving cabs nowadays?? It’s rare to find someone born in this country driving a taxi. The stereotypical New York cabbie with the Brooklyn accent has gone the way of the dodo bird. What happened??
If the corrupt politicians didn’t demand $1,000,000 for a ‘medallion’ to drive a cab, then taxis could be much cheaper.
even here in L.A., there are at least 5 start ups for taxi services’ which are NOT taxi services just like Uber. I’ve used Uber a couple of times and i get to pick which driver i want. The last time i used a cab the jackhole tried to gouge me $60 from Hollywood to LAX when it averages $35. With Uber, it cost me 15.
I always wondered about Uber. Do the drivers carry extra liability insurance? Do they clue in the insurance company that they are using the vehicle for a business? Different state rules/taxation for business use of vehicle as well. Payroll taxes or estimated tax payments?
So do they know what they’re doing in that regard, or are they just winging it?
I think services for cabs already exist and Uber has their own service for cabs, too I believe.
This will be a win-win for everybody.
It's like when Apple came out with the iPhone. At first, the competitors resisted it as they had such high margins and near total control of the platform with their "feature phones". But they quickly realized that they needed to adapt to the app driven platforms of iOS and Android to survive and turn over control to the end users. Those that didn't move fast enough (i.e. Blackberry) did not fare well.
We are going through the same thing with the cable industry. People don't want to have 500 channels forced down their throats. They want to cherry pick and only pay for the channels they want. Netflix and Hulu are leading the way, along with Apple TV and Amazon Prime.
I always wondered about Uber. Do the drivers carry extra liability insurance? Do they clue in the insurance company that they are using the vehicle for a business? Different state rules/taxation for business use of vehicle as well. Payroll taxes or estimated tax payments?
...
Uber seems to help the drivers as much as they can. I’ve read that the drivers can rent cars and smartphones with Uber’s help. I would assume that Uber helps them with insurance too.
The government doesn't get the $1M.
The reason the prices were so high was because the city capped the number of medallions in 1937. The total number has fallen and risen over the years, but it's still limited: 13,237 in 2009.
The inflated price of medallions is on the secondary market. Since you must have a medallion to operate a cab in NYC, it's a valuable asset.
It's just another example of the law of supply and demand. If you limit the supply and demand goes up, the price will go up. Now that demand is falling, the price is going down.
Winging it somewhat I think.
My understanding is that the typical owner-operator of yesteryear couldn't afford a medallion anymore so the taxi companies bought them up and hired foreigners because they worked cheaper.
Back in the 1990s when I went to New York on business regularly, I learned how to spot the unauthorized cabs and limos, especially at JFK. They were typically but not always 20 something kids, usually but not always white. They would pull up to the luggage claim door typically in a plain white station wagon. They couldn't stay long because of the parking nazis but if things were quiet, they would typically call out "Anyone need a ride to Manhattan?" or the more cryptic "Mr. Philip Jones, your ride is here. Is anyone going into Manhattan with you?"
Of course, there wasn't a Mr. Philip Jones (or whatever), that was a cover to solicit riders which they legally couldn't do without a cab medallion.
Most of them would give you a business card and a receipt for the company expense account unless they thought you might be an undercover medallion nazi trying to bust them.
Of course, the official excuse was that medallion drivers were trained and licensed and these guys weren't. Which was plainly bullsh*t once you discovered they couldn't even understand English in most cases . . . you had to write down the address for them and they looked it up in a city map atlas.
You'd save roughly $10 off a fare from JFK to Midtown Manhattan by using one of the 20 something native New Yorkers.
Since I can’t drive anymore I use Lyft. Better service, better drivers.
Competition is evil! everyone should be equal!/s
All I know is that there has to be a better way to run the taxi / limo industry. And its not like the taxi drivers themselves are getting rich. Most of them are driving long hours in dangerous conditions to make not much money. So if its the cab companies who are getting rich, then this is probably good.
You are correct in stating that the medallions value is determined by market conditions in the secondary transfer market. Which of course fluctuates
Here in S. Florida Id like to see all the taxi drivers taken out to sea.......
“Build a better mousetrap”....
Some of your questions are answered here:
https://www.uber.com/driver-jobs
Basically, it’s my understanding that Uber drivers work as independent contractors. They set their own hours and drive their own cars.
You contact them and pay through a phone app. You know in advance what the price will be from point A to point B (no meters running) and they do not accept tips.
Win-win for everyone. It’s big in Europe, as well.
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