The negative news raining down on ride-service provider Uber as Portland, San Francisco and Los Angeles County sue the company puts a smile on the face of Seattle Yellow Cab General Manager Amin Shifow.
Seattle taxi-industry revenue took a 40 percent dive during the first year the San Francisco-based company, along with competitors Lyft and Sidecar, used instantly popular phone apps to dispatch hundreds of unlimited and unregulated ride services.
So he doesn’t mind seeing the startup, reportedly valued at $18 billion, squirm a little.
But Shifow’s also smiling because he thinks the backlash against Uber is happening at just the right time.
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Yellow Cab’s 2-month-old ride-request app — a sleeker upgrade from the app it rushed to release about a year ago — is humming along without glitches, Shifow said. And, he says, thanks to a switch to GPS-dictated driver assignments, average response times within the city have almost been cut in half.
Advertising for the service is showing up on cabs. “Tap the App,” the signs read.
The free application for iPhone and Android incorporates features long available on Uber, Lyft and Sidecar apps: It automatically locates where a passenger is requesting a ride from, allows passengers to track on a map how close their driver is to arriving and — in about a month, Shifow said — will allow riders to pay through the app as well. He said San Francisco taxi customers are about to get the same service to pay their fares.
Other ride services such as Eastside for Hire have been using phone-dispatching apps such as Curb, which has all of those features, for more than a year now.
In other words, the differences between taxis and services like uberX — Uber’s nonluxury passenger service — are diminishing, and Shifow wants to see some of the regulatory differences between them narrow as well.
While uberX’s unlimited number of cars continue to be allowed to pick up and drop off passengers almost anywhere in King County, the city of Seattle has not increased the number of taxi licenses since 1990. Currently, 688 taxis are licensed to operate within Seattle and 597 licensed to operate anywhere in King County.
The city will grant its first set of new taxicab licenses in about 25 years early next year when it issues 35 by lottery, said Denise Movius, deputy director for the Department of Finance and Administrative Services.
But even if City Council members are still too exhausted by last year’s regulation negotiations to take up the topic again anytime soon, Shifow says, he’s confident Seattle’s taxi industry is already braced for a comeback this next year.
Even as he calls his competitors “bullies,” Shifow admits Seattle Yellow Cab wouldn’t be resurrecting itself with much-needed upgrades had such app-based ride services as Uber and Lyft not come to town in spring 2013.
He says Yellow Cab’s lack of motivation to modernize itself was not a money problem — it was a competition problem.
“In all honesty, the taxi industry was stagnant for a while: They had it good, there was no competition and, when you have no competition, there’s nothing for you to worry about,” said Shifow. “But the competition came in at the same time, and it came in hard with unlicensed, unlimited cabs all of a sudden hitting the road — that was tough.”
Shifow knows because at this time last year, he wasn’t general manager of Yellow Cab, still the largest taxi company in Seattle and King County. He was a driver and owner of an expensive-to-operate wheelchair-accessible taxi that became even tougher to afford operating when uberX and Lyft came to Seattle with easy-to-operate apps that allowed riders to track, rate and pay their drivers through their phones. What none of them offered, as the taxi industry tanked, was service to passengers needing wheelchairs.
So Shifow edged himself into the grueling for-hire regulation negotiations Seattle Mayor Ed Murray started last year.
By the time new regulations for all ride services were in place in July, Shifow had not only emerged from the negotiations with a 10-cent surcharge on all rides to help fund wheelchair-accessible cab service — it was later announced he would head Seattle Yellow Cab and its dispatch arm, Puget Sound Dispatch.
New computers soon arrived at Yellow Cab’s South Seattle headquarters, a place where two of the faded address numbers on the door are colored in with black marker. Three months ago, the decrepit computers Seattle Yellow Cab relied on for decades were piled up in the corner of its old dispatch-center room.
Just as Seattle Yellow Cab has undergone its most drastic transformation in decades, Uber has been trashed in national headlines and blistering editorials regarding the company’s business strategies and surge pricing.
This month, Portland banned Uber from operating there, and district attorneys in San Francisco and Los Angeles have filed lawsuits against Uber with claims that the company mischaracterizes the quality of its driver-background checks, and charges passengers extraneous fees that they should be refunded. Lyft has paid $500,000 in civil penalties to settle claims in California about its driver-background checks.
Shifow is hoping that the new app and pressure mounting on Uber to change its pricing and driver-oversight policies makes taxis a worthy competitor again.
“What doesn’t kill you makes you stronger,” Shifow said. “That’s definitely true for us.”