Uber: Cheap Ride Alternative or Death Knell for Cabbies?

July 29, 2014

Longtime taxi driver advocate Nathan Price argues that because Uber is not subject to the same regulations and taxes, its lower prices are destroying the livelihoods of taxi drivers

Longtime taxi driver advocate Nathan Price argues that because Uber is not subject to the same regulations and taxes, its lower prices are destroying the livelihoods of taxi drivers


Story Transcript

ANTON WORONCZUK, TRNN PRODUCER: Welcome to The Real News Network. I’m Anton Woronczuk in Baltimore.

Uber, the ridesharing service you can access with your mobile phone, has become a popular alternative to traditional taxicabs. With Uber you get a cab sent to your location based on the GPS on your phone and pay a flat fee through the mobile app. The San Francisco-based company is now established in over 100 cities across the world, and the market value of the company could soon reach $200 billion, apparently is much as Toyota.

But Uber faces legal challenges by states and cities across the continent. Officials in Vancouver were apparently surprised to find out that Uber was operating in their city and are considering whether it is operating legally under current municipal codes. The state of South Carolina says that without a registered business license, the ridesharing service is operating illegally in the state. And the mayor of Annapolis has also ordered Uber to halt service until it registers as a cab company in the city.

Last month, thousands of cabbies protested against the company in the European cities of London, Lisbon, Madrid, Milan, and Paris, and cabbies in D.C. shut down downtown in protest of Uber and other rideshare services like lift. Traditional taxicab drivers contend that Uber and companies like it are benefiting from the avoidance of regulations and taxes, and that this allows them to undercut competitors. Earlier this month, Uber cut fares in New York City by 20 percent, driving the price below a standard cab fare.

Uber denies it is a public service company. It claims that it is a technology platform and because it does not own the vehicles that are used to transport passengers is therefore exempt from regulations. Its supporters say this is a more competitive model and cheaper way of providing services to consumers.

Joining us now to give the cabbies’ point of view is Nathan Price. Nathan is the chairman of the D.C. Professional Taxicab Drivers Association, which was formed over 20 years ago. He’s an advocate for the rights of taxicab drivers and has been driving a taxicab for 42 years in the District of Columbia.

Thanks for joining us, Nathan.


WORONCZUK: So let’s start off. Why did the taxicab association decide to join the protests in D.C. last month?

PRICE: They really had no choice. Drivers are being forced backwards over a cliff, and the only thing at the end of the cliff was death or starvation. So, therefore, in order to–they wanted to actually show the city–not only the city–they wanted to show the whole federal government, they wanted to–and the world, if necessary, that this is something that people need to start paying attention to, because basically we’re being treated like sharecroppers. This is modern-day sharecropping, what they’re doing to taxicab drivers in Washington.

Washington is a very unique city. Most of the drivers own their own cars. But what is happening is that the city is forcing them to slowly but surely disown your own taxicab and work for a company. And they’ll be slapped in the face harder. The city council has granted Uber almost free reign to come into the city and work as if they wish. And they don’t pay taxes. They don’t have to be licensed. And some members of the city council are very adamant of saying this is what they want.

WORONCZUK: Yeah, how did the city council respond to the protests last month?

PRICE: They didn’t. Some were kind of shocked, but they really didn’t respond. And one of the things that I told key members of the teams was that they won’t respond until you do it over and over and over again. You have to keep it in their face. You have to make it so loud that members of Congress, or even the president, has to make some notice. What are you doing wrong? Why are you causing this traffic disruption in Washington? Why are these 8,000 drivers, why are they unhappy? So until that happens, the city council won’t respond, because basically they’re negligent.

As in other cities around the world, taxicab drivers are regulated. They’re regulated. They have to have licenses. They have to go through inspections. They have to go do background checks, medical exams. So, therefore, the cabdrivers are saying, just level the playing field so we all can play. You know, if I have to be licensed, you be licensed. Now, if you want everybody to be unregulated, then unregulate everybody. But then that would cause havoc on the person out here trying to use a taxicab for his transportation service.

WORONCZUK: We actually invited Uber to come onto our program, but instead they sent us an official statement. Let me read something to you from the statement.

PRICE: Please do.

WORONCZUK: They said, instead of complaining about competition and furthering a stagnant industry, taxi companies should catch up with the times and focus on improving their customer service and innovating to better serving their own riders. We welcome any taxi driver to become an Uber partner and enjoy the freedom, flexibility, and opportunities the Uber platform offers.

What would be a response to that?

PRICE: My response to it is that what they’re saying, as far as innovation technology, they’re absolutely true. They are more efficient. They’re doing what a lot of drivers have been asking their companies to do for years. But you forget we have a dysfunctional District government, and the taxicab commission is no exception to that. So, therefore, most companies, all they care about is the bottom line: how can we go out here and mine the taxicab drivers to strip them of their money or what the government doesn’t give them. So, therefore, Uber has said a mouthful, then. But the problem is that they’re so brazen that they feel they can just forget rules and regulation.

And what’s amazing about it in Washington is that the city council passes the laws that says, you must be what licensed, but yet, and still, the majority of the members of city council approve of Uber being unlicensed. There’s a lot of hypocrisy there.

WORONCZUK: Why do you think that is? Why do you think they support Uber so much?

PRICE: Well, there’s a old saying. A monkey will take money without pockets, so why would a man in a three-piece suit–and he got plenty of pockets–he’ll fill them up. You know, whether that’s true or not, that is the perception that you leave anytime you allow somebody to come into the city and work that pays nothing into the city coffers. And ain’t no matter what kind of service they’re providing, without background check, you’re exposing citizens to people who may be unscrupulous or unethical. But put a little bit of–in your pockets, you can look the other way.

WORONCZUK: So let’s talk about also the traditional problems that are faced by cabbies, I mean, before Uber even came into the picture. From what I understand, the licenses or the medallions are very, very expensive and that the rental services and the rental prices for cars makes it very difficult for cabbies to even break even in a day’s work.

PRICE: Right. Well, Washington is–one thing traditionally is one of the–there’s five taxicab cities in the United States–San Francisco, Las Vegas, Chicago, and Washington. Those cities–and that’s based on the need for taxicab service. Washington is propelled largely by conventions and the Congress and the federal government. So, therefore, it is a very bright market. So, therefore, what is happening is that Uber has just taken advantage of a situation, and traditionally, that drivers–what they’re doing: they’re–drivers are losing their freedom. In Washington, drivers own most of their vehicles, but that used to be about 85 percent of the drivers owned their own vehicles. That’s a free entrepreneur system. But what’s happening is that that figure is now down to about 65 percent now, and that’s a large drop. So, therefore, what’s happening is that these drivers are being forced out of business, and then you put Uber on top of that, and they cry because they see–they’re sitting on hotel stands and they say see Uber cars come up from all over, take the jobs away from them while they’re sitting on the stands, waiting. So, therefore, they won’t be able to feed their own families.

WORONCZUK: Well, let me also give you a different counter argument. I mean, as far as I understand, in order to work for Uber, you don’t have to pay licenses, you don’t have to buy a medallion, you don’t have to go through a very rigorous regulatory process. And so it’s actually easier to become a worker for Uber that it is for traditional taxicabs. So, I mean, is this–in a way, is this–mean that it’s perhaps better and it’s easier to get work as a driver for Uber that it is for traditional taxi companies?

PRICE: It is, because, basically, if you have a private car that they approve of, it can be anything from a Hyundai to a Tahoe, any type of vehicle. As long as it’s clean and presentable and you dress a certain manner, you can work for Uber.

The problem is that Uber has the right to terminate your services any time they wish. And whereas in the taxicab industry you have–it’s a process. Even though that process has a lot of flaws with it, there’s still a process. So that’s the big difference right there.

WORONCZUK: Well, you were also mentioning to me off-camera that if you go work for–if you switch to Uber, if you’re a traditional–if you’re a cabbie and you decide to switch to Uber, and then if you lose your job with Uber, it’s that you actually can’t go back to being a cabbie.

PRICE: Well, what happens is if you own your own taxicab and you have tags on that vehicle, unless you pay the insurance on those tags weekly, the taxicab commission will terminate those tags. And you can never go back, because they have a freeze on issuing the license tags. So, therefore, that’s the risk you run. You know, there’s a lot of freedoms in Uber as long as you can get the approval of the passengers, give them 20 percent of a fare. Without all the rest of the antiquated fees that you have to do and all the regulations, it’s–to me it’s well worth it.

But on the other end, taxing business has been good to a lot of people. It has been the stepping stone for people, whether they’re from immigrants, whether they are minorities who couldn’t get employment nowhere else, they were able to drive a cab and it could be their own business. They were entrepreneurs. They just weren’t people working for somebody. They were their own businessmen, business people. And basically what has happened is that the city government has taken that from them.

WORONCZUK: So let’s talk solutions, then. Like, what solutions would you propose that would work in the favor or the interests of consumers who really do like the technology-based and the efficient model of Uber but also protects the traditional cabbies?

PRICE: Well, it’s just like–the taxicab commission mandated a credit card system that was–that the expense was borne only by the taxicab drivers, a specialized dome on top of the taxicabs that was mandated only for taxicabs, and the drivers had to bear all the costs. A solution would be–why wouldn’t the government be innovative enough to say, look at the Uber model, and says, we want this. Instead of having a two-way radio system with a monitor and all this kind of stuff, make all drivers have smart phones and do the same thing Uber’s doing. Then you would have that efficiency, the same efficiency Uber does.

But instead, you know, Uber just decide, we’ll just skirt around the issue, because at one time they were soliciting taxicab drivers to actually be part of the Uber family, but the problem is that the companies started threatening drivers with expulsion and fines. And so, therefore, the drivers kind of, like, backed down from Uber.

So the only solution I would see is that, say, use their model, use their technology, and you make the industry better, because that’s what the people want. The people want service, and that’s what the industry should be about, service. And the government should be about saying, we demand that level of service, and if Uber has it, we want to put in all taxicabs.

WORONCZUK: And this will be better for workers as well.

PRICE: It’ll be better for workers. You know. But, first, we have–when the district was–had meters since the mid ’30s, I mean, had zone systems since the mid ’30s, and in 2008 they switched to the time and distance meter. Time and distance meters require basically in every city that you have a set number of taxicabs as a ceiling on the number of taxicabs you can have, and you raise it according to demand. The District of Columbia never did any kind of studies that say, what is that ceiling, how many taxicabs do we really need, because basically ineptitude just runs so rampant, they couldn’t figure it out no matter what. So, therefore, Uber comes along and Uber says, we can provide a similar type service, and people who live in outlying areas or universities and things like that, they can get the service more readily than what the taxicab countries are providing for them.

See, the problem is that Uber invested in the technology. The companies are too cheap to invest in technology. If they invested in technology, they’d want to pass it on to drivers. All Uber’s saying: whoever you are, whatever you drive, give us 20 percent of the fare and we’ll give you the technology and we’ll give you the service and we’ll put the money direct deposit into your back account every day. Where in the District they have that same direct deposit, the drivers have to pay for it. The drivers have to pay for–they have to pay the freight on everything.

So, therefore, somewhere along the line nobody’s really looking at the whole picture and looking at it saying, let’s do an economic model to see how this really works, you know, because dysfunctionality that permeates throughout the whole District government, the Taxicab Commission is no different. The companies are too greedy and perhaps really are not up to par in competing with something like Uber.

WORONCZUK: Okay. Nathan Price, thanks for joining us.

PRICE: My pleasure.

WORONCZUK: And thank you for joining us on The New Real News Network.


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