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Ride sharing’s impact on taxi drivers

Ridesharing impact on taxi drivers

Taxi drivers play an important role in our communities and for more than 100 years have been a convenient, reliable and safe way for people to get around.

Passengers would regularly use the same private hire taxi firms and knew where to hail a black cab if they arrived at a train or bus station or other public venue. That changed in 2009 with the emergence of Uber and has caused severe disruption to the UK’s taxi and private hire markets, appearing to undercut traditional mini-cab and black-cab operations. But its cutting-edge technology has also been game changing for the industry and it has set the standard for how passengers use taxis today, including sharing the name of the driver and type of vehicle with passengers for convenience and safety.

While the idea behind a taxi service hasn’t changed from the earliest days of horse and carriage, the way in which they are now used has changed dramatically.

As mobile phones, tablets and computers became more a part of everyday life, 13 years ago in San Francisco, in the heart of Silicon Valley, tech entrepreneurs Garrett Camp and Travis Kalanic came up with the idea to use an app to run a taxi business, and Uber was born.

Since then, it has branched out into other transport and delivery modes, including Under Eats, water taxis and even motorised scooters. Other ride-sharing taxi firms have also followed suit.

And they have grabbed a major hold in the market, with more people using ride-sharing taxis than the iconic yellow cabs in New York City – and Uber remains ahead of rivals including Lyft, Juno and Via.

Figures from the Taxi and Limousine Commission show that Uber drivers – who have to be booked in advance and have private hire insurance – make 530,000 trips each day in the city, while public hire yellow cabs account for just 102,000 journeys. Figures also show that ride-hailing apps now account for 84 per cent of New York City’s taxi market.

Apart from the advantage of being able to book a taxi via an app, ride-sharing taxis became hugely popular because they were able to undercut public and private hire taxi operators, making them cheaper and more convenient.

The impact on taxi drivers is shown by the plummeting value of a New York City taxi medallion – the city’s once hugely sought-after taxi licenses. At their peak in 2013, they were valued at $1 million, but are now sold for $130,000. Licenses that were once thought of as the holy grail for taxi drivers in the city now fail to sell at auction, despite the huge fall in price.

This is because the medallion system, which limited the number of licensed vehicles, has been bypassed by ride-sharing taxi firms.

Uber and other firms have courted controversy over the years in terms of licensing and the treatment of drivers as contractors rather than employees.

The negatives include passengers facing rising prices at peak times as demand for taxis soars, and there have been safety concerns about its pool feature which lets strangers share a cab.

But its firm hold on the market has also seen innovations such as allowing passengers to book low-emission vehicles, and it has pledged to make all Uber taxis electric by 2025.

While public hire and private hire taxi drivers compete with ride-sharing firms, there are things traditional companies can incorporate to secure their share of the market.

By investing in apps and similar technology, passengers will also know who their driver will be, how much the fare will cost in advance and be able to pay without having to find the right cash or having to stop at an ATM during the journey.

They can also continue to enjoy the familiarity of having the same driver for regular journeys.

All information is correct at time of publication. Information provided within this article may have changed over time. No responsibility for its accuracy or correctness is assumed by John Patons Insurance Services or any of its employees.