Alongside the push for Uber
Screenshots from the Uber app.
The open letter that Matt Baumgartner and Vic Christopher released Tuesday calling on local mayors to help bring Uber to the Capital Region has been getting a lot of attention in the local media. And that makes sense. Baumgartner and Christopher are both prominent local business figures, and it's no secret there is ample frustration with local taxi services.
But the taxi issue in the Capital Region has been simmering for a while (Baumgartner and Christopher first reached out to Uber more than a year ago.) And there are a handful of important to angles to keep in mind...
Letter of Support for Uber from Capital Region entreprenuers by Relentless Awareness
The Baumgartner/Christopher letter.
Uber's not the only player in this game
The two biggest players in the taxi-app industry are Uber and Lyft. And as it happens, representatives from Lyft have already been in the Capital Region. As we reported earlier this month, Lyft reps met with Albany officials in March. And a Lyft spokesperson told AOA that the company has been talking with cities across the state.
Lyft has already tried to start service in other upstate cities -- it operated briefly in Buffalo and Rochester last year, but stopped operations there after the state raised concerns about its insurance situation. Its only operation in New York State is now in New York City where it's using commercial drivers in order to comply with state laws and regulations.
A state-level issue
One of the road blocks to Lyft's continued operation in Buffalo and Rochester is that current New York State insurance laws don't mesh with the "transportation network company" setup used by Lyft and Uber. There's currently legislation in both the state Senate and Assembly that would add these sorts of companies to state law (the term first arose as part of California's regulatory efforts) and change the insurance rules to allow them.
We get the impression that Lyft is pushing for this legislation behind the scenes with the hope of opening the way for its (re)expansion into Upstate New York. (Is Uber also involved? Good question. We haven't seen an indication of that, yet.)
And local-level issue
Even if that state legislation goes through, it doesn't necessarily mean that Lyft or Uber could start operating wherever they wanted. Just before Lyft ended its operations in Buffalo and Rochester, the company was facing some push back from the city of Rochester over a need to comply with local laws. [Rochester D&C]
Given the municipal structure of the Capital Region -- that is, many small municipalities all packed together, with many popular trips crossing multiple boundaries -- getting local approval here could be a long process. A short cut could be working out some sort multi-municipal agreement.
Regional approach
Since the release of the Albany County Convention and Visitors Bureau's taxi experience survey last November, the org has gathered together a group of local officials to discuss possible regional approaches to addressing concerns about the taxi situation. We hear this group includes state Assembly members Pat Fahy and John McDonald along with reps from the CDTA, Albany International Airport, the Albany-Colonie Chamber of Commerce, and the Albany Police Department. The group has also reached out to the mayors of the cities of Albany, Rensselaer, Saratoga Springs, Schenectady, and Troy and the supervisor of the town of Colonie. The group met for the first time in March.
It will be interesting to see what bubbles out of this group -- maybe something like a regional metering system -- and what sort of legislation might be necessary to pursue the potential initiatives.
By the way: Some sort of public event -- a forum, panel discussion, public hearing -- could help focus public attention and help everyone understand the issue better. Invite all the players, especially the taxi companies. Having this discussion in public, especially since it already involves reps from so many public orgs, isn't a bad idea.
ACCVB Taxi Report Comments 2015-04-01
A collection of comments from the ACCVB tax survey, provided to AOA a few weeks ago.
There are reasons to be wary of the taxi-app companies
As we mentioned when writing about Lyft a few weeks back, the taxi-app companies have many fans and supporters who praise them for their user experience and what's described as an innovative approach to the rides-for-hire industry. But the companies have also been criticized by traditional taxi companies that argue the app companies have an unfair advantage because they don't follow all the same rules. And others have criticized the model these companies operate on, in which the drivers are not considered direct employees of the companies, for shifting the risks of operating the business from the corporation to the individual drivers. [NPR] [Slate] [Washington Post]
Does it have to be either/or?
One way to frame this situation is Uber/Lyft or traditional taxi service. But there are good reasons to not approach the situation that way. Among them:
+ These taxi-app companies are still relatively new, and it's not a bad idea to take a sober view of their longterm viability. What happens when the billions in venture capital stop pouring into a company like Uber?
+ Both types of companies -- app companies and traditional taxis -- are potential competition for each other, which, in theory, should be good for people who use the services. Having one company completely wipe out the local competition to have the market all for itself seems like a bad bet for riders in the longterm.
+ A lot of issues currently faced by traditional taxi companies here, like regionalization, will also apply to the app services. The problems will have to be fixed one way or another.
What are the real underlying reasons for bad taxi service?
The central question in any discussion about the relative quality of taxi service in the Capital Region should be this one: Why are things the way they are right now?
If the current situation is truly as bad as the survey results indicate, is it a result of bad management? A lack of training? Low pay? Problems with cost structure? Lack of real competition? Lack of consistent demand? Something else about the way things are set up here?
It's important to answer this question because these very same underlying problems could also end up affecting rides provided by one of these taxi-app services. And in that case, we'd just be trading one set of companies for another without actually fixing the problem.
Earlier on AOA:
+ A Lyft for Albany?
+ Surveying Albany taxi experiences
+ An attempt to hail Uber for the Albany area
For the sake of disclosure: Vic Christopher had been set to serve as a judge in the AOA Startup Grant competition this month until an unexpected scheduling conflict arose.
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Comments
I'm genuinely confused as to how über can already be operating in NYC but can't operate upstate due to NYS insurance regulations?
... said Rebecca on Apr 14, 2015 at 5:31 PM | link
AOA- Thank you for this post. It's the first balanced look I've seen in the current shouting about needing Uber and/or Lyft in the Capital District and I think your last point hits the nail on the head: why is it so bad now? Let's answer that question first before we try and "fix" the problem with Uber.
Rebecca- Uber and Lyft made serious concessions to the NYC municipalities to get into that venue and significant market base, including requiring their drivers to carry commercial insurance, which they do not appear to be willing to do upstate. As a passenger or vehicle owner, you don't want to get into an accident with with a personal policy. While there's mandatory coverage in NY, it's still easy to be uninsured because personal insurance is not meant to be used in this situation. This has negative ramifications for both the owner of the vehicle and the passenger should there be an accident..
All of NY is highly regulated for auto insurance (I'd get into it but it's boring... even more boring than the paragraph I wrote above) and I'd be shocked if any of the current legislation passes to assist either company in operating legally as they are in NY.
... said Cmaxby on Apr 15, 2015 at 8:43 AM | link
Balance and fairness in looking at the situation is important and a sign of good journalism. However, if the overwhelming evidence is of a service which is unfit for the residents of the capital region we have two broad solutions:
1. analyze how we got here in the first place and try and retool a system which has been broken for over a decade or
2. use the countless experiences of other cities that are like Albany today, as well as the cities which Sheehan would like Albany to resemble as our vetting process.
The answer is easy. Anyone who has not used uber/lyft I can understand the hesitance, but otherwise you either have a connection to the local cab companies or enjoy the idea of citizens being miserable.
... said Anonymous on Apr 15, 2015 at 9:10 AM | link
Thank you so much laying everything out in a concise, level-headed manner. (Better than the TU did, and much better than following Vic and Sean Collins' pathetic slap fight on twitter)
Uber/Lyft aren't perfect, esp re: labor issues and long-term viability, but this is a conversation we need to be having. The local cabs could use some competition to finally shape up, and regional leaders need to streamline their regulations for both (as well as make public transit a bigger priority).
... said guy on Apr 15, 2015 at 10:02 AM | link
Thank you for the thoughtful analysis. I agree that we should start with the question "What are the real underlying reasons for bad taxi service?"
Besides all the State and local regulations and roadblocks, the real issue to me is that the Capital Region culture is by and large a car culture.
People have a difficult time giving up driving their own vehicle and the perceived freedom this gives them. Neither one of these services can compete with that until that perception is changed. They will be happy to come in and take a % of every transaction, they already have the infrastructure in place and are looking to scale as fast as they can, but I'm not convince they will bring the Capital Region a better taxi service.
... said Shawn on Apr 15, 2015 at 10:16 AM | link
Right of the bat a great way to improve taxi service here: DUMP the zone and cab share policies add credit card payment. These are confusing, unfriendly to visitors, and there's no consistency.
... said daleyplanit on Apr 15, 2015 at 10:26 AM | link
I moved here last September and truly got the run around by a few cab companies and drivers - drivers would show up over thirty minutes late and I nearly missed the train, or they would fail to show up at all, or they would charge completely random prices.
Here's the phone number for an Eagle Taxi driver named Tahar that I've been calling (full disclosure- sometimes I don't end up using him because he's coming from far away but at least he tells me off the bat that it would take too long for him to get me and also make the ride more pricey): 518-364-6416
... said Anne Robbins on Apr 15, 2015 at 11:11 AM | link
I haven't taken a cab in the Capital Region in about 20 years, but learning that they still don't even have credit card swipers (unless I misunderstood?) is mindboggling. I can't believe one of the privately owned cab companies hasn't done at LEAST that, to be more competitive.
... said Rebecca on Apr 15, 2015 at 11:22 AM | link
Still left out of the conversation: improving public transit. We're looking a gift elephant in the room in the mouth.
... said -B on Apr 15, 2015 at 11:22 AM | link
Since when do cab companies get a tenure for not doing their job? Any other occupation would be immediately fired.
I agree that this is a conversation that needs to be had - but it's too late. The time to start this conversation would have been the first time a cab driver got caught selling heroin out of their car.
Uber or another ride service has the potential to change the game: imagine the business grown and overall excitement of residents that they can get from Albany to Troy, or Albany to Menands without fear of getting charged $60 for a 15-minute ride?
Maybe cab companies will step it up to a more "legal" level if they see that customers advidly use another company.
This is the capital of New York State and we need to act like it. I can't believe this is even a debate.
... said RE on Apr 15, 2015 at 11:33 AM | link
All this talk is pointless if Sheehan fails to act. She doesn't seem to acknowledge city issues that don't have an impact on her life.
... said Andrew on Apr 15, 2015 at 2:36 PM | link
I agree that one of the issues with taxi service in the Capital is inconsistency. I've taken taxis from the airport to home a good handful of times and each ride has been different with different costs even though I've gone to the same address each time. The worst was when the cab manager put 4 of us in the same car so I was more like a van service in a car and I had to wait for others to be dropped off first. Then the cab manager seeing that I was Asian proceeded to charge me twice as much as the trip typically cost before telling the cab driver to drive on. I was furious and called the cab company to voice my complaint and the cab driver and the manager I called apologized and reneged on their initial charge. Competition can do the Capital some good. I think about how all the supermarkets have all stepped up their game since Trader Joe's and Wholefoods have moved into the region and the Food Co-op moved into their new facilities. Overall we've see better quality, more choices, a new vibrancy and interest in food and places that draw creative people into the region.
... said Ladybug on Apr 29, 2015 at 4:50 AM | link