Ridesharing apps cause concern for local taxi companies

by Jess Clark

Uber and Lyft are smartphone apps that allow virtually anyone to turn their personal car into a taxi. Riders who use the apps to find drivers say they prefer Uber and Lyft to traditional taxi companies for their convenience and lower fares. Now that Uber has arrived in Chapel Hill, traditional taxi companies are being edged out of the market by new, largely unregulated competition.

It used to be if you wanted a cab, you’d either stand on the street to wave one down or call a dispatcher. Now in many cities, you can pull out your smartphone, open the Uber app, and with just a few taps you can hail yourself an Uber driver.

My driver is David Randolph. Randolph is a second-year medical student at UNC. He says he saw driving for Uber as way to make extra income on a flexible schedule, so he signed up on Uber’s website and after a background check, Uber approved him as a driver.

“I mean the real reason I’m doing it is one, you know medical school is expensive, and two the schedule is really easy,” Randolph said. “You can set your own schedule with the push of a button. If you want to drive, you turn it on, if you don’t, you turn it off.”

Uber’s driver app notifies Randolph when somebody nearby needs a ride. If he accepts the ride, he keeps 80 percent of the fare, and Uber keeps the rest. Randolph is typical of most drivers for Uber and Lyft, a similar company, in that driving isn’t his full-time job.

“I would be very skeptical if someone told me that they were doing this for a full time job as a career because I think that would be very hard to do,” Randolph said. “But, if you’re just trying to supplement your income, it’s really easy and it’s great.

Randolph guesses he makes 10 to 15 dollars an hour. But while the apps have been a source of added income to students like Randolph, Uber and Lyft have taken customers from traditional cab companies.

Doug Flaugher is a driver for Red Ride Shuttle, a Chapel Hill taxi company that says its calls have plummeted since Uber came to town.

“We had five drivers out each making 15 to 20 calls. Now, we’re down to 17 calls feeding one driver.” Flaughter said.

Three of Flaughers’ former colleagues at Red Ride now drive for Uber. Erol Jenkins made the switch this summer and says that driving for Uber he makes the same money he made driving for a cab company, but in half the hours.

“You work 12 hours a day for a cab company and with Uber you work the prime time, and you make about the same amount,” Jenkins said. “Overall, I think it seems to be a little bit better than a cab company.”

Uber usually costs about half as much as a cab. Red Ride cut fares, but with the costs of owning a taxi business, the company struggles to offer competitive prices.

Chapel Hill requires cab companies to pay fees for licensing, inspections and background checks. It also requires them to have commercial insurance policies, which cost 300 dollars per month per cab.

Ben Nader, Red Ride’s general manager, says since Uber and Lyft drivers don’t have the same regulations, it gives them an unfair advantage.

“In regulations they’re not supposed to drive without the commercial insurance and permit,” Nader said. “I don’t know if I will be able to continue carrying the big overhead right now. I’m hoping that Red Ride will stay alive, otherwise I have to shut it down.”

The town doesn’t regulate Uber or Lyft drivers as taxi companies or make them pay similar fees, but its hands are tied. The legislature passed a law last year that prevents cities from regulating or licensing so-called “digital dispatching services”. The different standards make Red Ride dispatcher Andrea Jones uneasy.

“The regulations and ordinances were put in place to keep the people of Chapel Hill safe,” Jones said. “I just think if everyone had to follow that across the board it would make a difference.”

Jones will continue to work for the cab company as long as she can, but she worries about its future and plans to change careers soon. Nader is keeping Red Ride afloat with its party bus and limousine business, services Uber and Lyft don’t offer. At least, not yet.

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