Tuesday, July 29, 2014

Former NYC Taxi agency head says Uber has an unfair advantage over cab industry

Posted By on Tue, Jul 29, 2014 at 10:08 AM

click to enlarge Matthew Daus in CL's offices on Monday.
  • Matthew Daus in CL's offices on Monday.

Although Uber and Lyft have been hailed as innovators locally by lawmakers like Jeff Brandes, Jamie Grant and Mayor Bob Buckhorn, the longest serving Chairman of the New York City Taxi and Limousine Commission says requesting a ride from those hot new transportation companies is really no different than ordering a pizza from a new restaurant in town.

"You may get the pizza faster, but it's still a pizza," says Matthew Daus, referring to the fact that whether it's a yellow cab, a limousine or a ride from a guy with a mustache on his front bumper who fist bumps you as you exit his vehicle, it's still just paying a stranger for a ride.

"It's just an app," he insists. "They're just getting more attention because they're breaking the law." Daus says that the taxi cab industry doesn't have the marketing machines that allow Uber in particular to "hire the best lobbyists and the best lawyers and the best media experts."

There's no question that these new companies have severely shaken up the market, though, and Daus was in town to speak at the Hillsborough County Public Transportation Commission meeting to update the board on how the taxicab industry is coping with the various different issues regarding the Uber/Lyft saga. He's currently the president of the International Association of Transportation Regulators (like the PTC), and spoke at CL's offices on Monday afternoon.

Currently, UberX and Lyft are operating outside the law in Hillsborough, as neither has worked with the PTC on being certified for passenger service in the county. Previously, Uber had complained about not having access to Hillsborough because of the agency's mandatory $50 minimum fare, but that was for limousine service, which Uber offers with their Uber Black model. But UberX clandestinely began operating in Tampa in late April, a week after Lyft did the same.

Daus was at the Taxi Commission in New York City for 14 years, and was named by former Mayor Rudy Giuliani back in 2001 to head that department (he departed in 2010).  He sees the current battle between the upstart ridesharing companies and the existing cab and limo industry ultimately ending in two ways — either they'll end up working within the confines of the existing laws and become part of the fabric of daily transportation, working side by side with cabbies, or the market will ultimately become deregulated, which he says would be a disaster, indicating how such efforts around the world have proven to be ineffective.

He does say it's the "black car industry's own fault" that Uber was able to legally work in New York City back in 2012 with their own limousine or black car service. Daus says the cab industry in New York was still struggling post-recession, and that his agency had mandated that yellow cabs install credit card machines. He said when Uber appealed to offer service and would use the same drivers that were working for established black car companies, the industry agreed, believing they'd get a cut of what their drivers made.

But then Uber began employing "surge pricing" (charging much higher rates at peak periods), allowing the drivers to make considerably more than they were making with the established companies. Many of those drivers then went to work for Uber directly. Daus says he really doesn't have a problem with how that went down, since Uber was officially licensed to do such business. But he says the UberX plan of flooding the market in all types of major and "tertiary" cities is having a damaging effect on the cab industry, because he says they've gone outside the rules. And he says that people need to be concerned about the inefficiency of the companies own background checks and insurance policies (a concern representatives for those companies say is overinflated).

"There is competition out there, but it's unfair competition," Daus says. "If they get a license in every jurisdiction, my members will say it's fair and fine and let the chips fall where they may. We're not in the business of telling people where they should get their money and put their investments. We're in the business of making sure that if you get a license, that you have to meet certain standards ... and that the public is safe and customers aren't being ripped off. After that, the regulation is done."

Daus calls it "an inconvenient truth" that Uber Black initially worked within the rules when first breaking into offering service in NYC, because their model now involves going outside the limits of the law. He calls TNC laws (Transportation Network Companies) that have been passed in jurisdictions like California to permit Uber and Lyft "won't withstand the test of time," with their different rules for insurance and background checks. But he admits that there's "clearly a cultural revolution taking place" with disruptive services like Uber and Lyft, and admits that the taxi cab industry is suffering from lousy public relations. "They need to get their cool back."

But whether they ever will get that cool back is dubious. And it doesn't help the cause when local hospitality officials such as Lou Plasencia, CEO of Tampa-based Independent Hotel Partners, are trashing your industry. Referring to taking a taxicab from Tampa International, Plasencia went off last week saying, "It’s deplorable, embarrassing. It’s the first experience our guests have when they come into my community, and they have to sit in that pigsty. There are dirty cabs; the drivers are in shorts. They try to talk you out of using your credit card ‘cause it costs them a fee. The cabs are our industry’s first line of contact. It’s inexcusable."

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