Tag Archives: Taxi in Austin

After years of trying to catch up to competitors Uber and Lyft, lesser-known ride-hailing startup Sidecar is ceasing operations.

Another taxi drama

Another taxi drama

The company will stop offering all rides and deliveries on December 31, 2015 at 2 pm PT. Sidecar founder and CEO Sunil Paul announced the decision in a Medium post on Tuesday.

Sidecar was an early competitor in the ride-hailing app world. Launched in 2012, it raised $35 million in funding from major venture capital firms, including Virgin’s Richard Branson.

It branched out to a number of U.S. cities, but never managed to find the same loyal following, or funding, as Uber and Lyft. Uber has become the most valuable private company in the world.

Sidecar has claimed it invented the concept of ride-sharing, in which a smartphone app is used to connect people with drivers using their personal cars. Though Uber existed first, it only worked with limos at first.

“We are the innovation leader in ridesharing despite a significant capital disadvantage, continually rolling out new products that set the bar for others to follow,” said Paul in the post.

The struggling company was dabbling in other business models to help drum up business. Starting in 2014, Sidecar started doing same day deliveries for e-commerce companies like EAT24. Uber launched its own delivery business in April 2015.

In May, Sidecar announced it was teaming up with medical-marijuana delivery startup Meadow to handle its same-day deliveries in the Bay Area. The drivers needed to be medical marijuana patients themselves and members of the dispensary sending out the packages.

The company is not disappearing completely. The remaining team will “work on strategic alternatives and lay the groundwork for the next big thing,” said Paul.

Seattle is first city in nation to give Uber, other contract drivers ability to unionize


seattle Taxi Vs Uber

seattle Taxi Vs Uber


The Seattle City Council voted unanimously Monday to give taxi, for-hire and Uber drivers the ability to unionize.

Mayor Ed Murray won’t sign the ordinance, but his signature is not needed for the bill to become law, he said.

The National Labor Relations Act gives employees the right to collective bargaining. But drivers for taxi, for-hire and app-dispatch companies like Uber and Lyft are categorized as independent contractors, rather than employees, so those federal protections don’t apply to them.

Seattle is the first city in the U.S. to establish a framework for contract drivers to organize and to bargain for agreements on issues such as pay and working conditions.

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Backers of the groundbreaking bill, including drivers, broke into applause after the vote in the council’s crowded chambers and chanted, “When we fight, we win!”

Takele Gobena, a 26-year-old Uber driver and a leader among those pushing for unionization, called Monday’s vote a victory. He was temporarily kicked off the app in August just a few hours after taking part in a news conference with Councilmember Mike O’Brien, the bill’s sponsor.

“I’m so excited. I’m so happy,” said Gobena, of SeaTac. “This is a big change for us.”

Uber and Lyft opposed the ordinance and argued O’Brien’s proposal violates federal labor and anti-trust laws, meaning the city likely will be sued.

“Uber is creating new opportunities for many people to earn a better living on their own time and their own terms,” the company said in a statement Monday.

Murray sent council members a letter before their vote expressing reservations about the bill. He’s worried about costs related to managing the bargaining process and defending the ordinance in court, he said.

But O’Brien struck a triumphant note.

“This bill was only introduced out of necessity after witnessing how little power drivers themselves had in working for a living wage,” he said, adding, “I am proud Seattle is continuing to lead the nation in advancing labor standards for our workers.”

Under the ordinance, a taxi, for-hire or app-based vehicle-dispatch company will be required to provide the city with a list of its Seattle drivers. Then a nonprofit organization — most likely a union — will use the list to contact the drivers.

The nonprofit organization will need to gain the support of a majority of a company’s drivers to be designated by the city as their bargaining representative.

The ordinance will require the company to hammer out an agreement with the representative organization. The city will enforce the ordinance’s requirements through penalties such as fines but not by revoking a company’s license to operate.

The backdrop for the council’s vote is a nationwide conversation about what role governments should play in the country’s growing app-powered gig economy.

Companies like Uber and Lyft for rides, TaskRabbit for odd jobs and GrubHub for food delivery are attracting workers by offering more flexibility than conventional jobs.

But labor activists and others are worried about apps making it easier for companies to contract with independent workers and avoid paying minimum wages and benefits.

Drivers from several cities, including Seattle, are suing Uber for categorizing them as independent contractors, and politicians in Washington, D.C., and elsewhere are talking about whether a new benefits system or new worker category might be needed.

The lawsuits will focus on whether Uber controls drivers by setting fares and deciding who can work or whether drivers are in charge by setting their own schedules.

O’Brien’s proposal grew out of organizing by taxi, Uber and Lyft drivers in Seattle and from advocacy by Teamsters Local 117. Some drivers backing the bill have said that, after expenses, they make far less than the city’s minimum wage driving for Uber and Lyft. Other drivers have said they like the way the industry operates now.

Uber ramped up its engagement in Seattle before Monday’ vote. David Plouffe, a former political strategist for President Obama now serving as Uber’s chief adviser, visited Seattle earlier this month to promote the company and criticize the ordinance.

The company recently chose the city for its launch of devices on some vehicle windshields that light up to help drivers connect with waiting riders. Last week, it began offering a new service in Seattle called UberHop; vehicles pick up riders at set spots along set routes. The company has been advertising heavily in local media, as well.

The council’s finance committee approved the ordinance in October but O’Brien’s delayed the final vote so lawyers for the city could work to make it more legally sound.

Uber has sued King County and Seattle law firm Keller Rohrback in an attempt to block the county from releasing, under a public-records request by the firm, the number of licensed drivers the company has here. In an interview during his visit to the city, Plouffe told The Seattle Times that Uber has more than 10,000 drivers in the city.

Dan Clark, 64, a part-time Uber driver from Auburn, is against O’Brien ordinance because “it just seems wrong to have a union come in and dictate everything,” he said.

Uber and Lyft could raise fares in Seattle. But Gobena, who said he drives 55 hours a week in addition to attending college, said he believes passengers are on his side.

“The riders, they see how much we’re paid … They feel so bad,” the pro-union driver said. “We are just asking Uber to pay us a living wage. Seattleites want that.”

Daniel Beekman: 206-464-2164 or dbeekman@seattletimes.com. Twitter @DBeekman

New York taxi owners are suing the city for letting Uber destroy their business


taxi_vs_uber

taxi_vs_uber


New York City taxi owners and credit unions are suing the city and its Taxi and Limousine Commission for letting Uber expand despite the harm it has caused their business. The lawsuit, filed today in Manhattan federal court, accuses city regulators of easing the pathway for ride-hailing services to operate with fewer burdens, according to a report today from Reuters. The lawsuit could represent one of the last dying gasps of the country’s largest taxi industry, which has moved on from its losing fight against Uber in hopes of extracting damages from the city itself.

The complaint states that medallion prices, which help artificially restrict the supply of city cabs, have fallen 40 percent from an all-time high of more than $1 million between April and June of this year. Meanwhile, the number of cab pickups fell by 3.83 million. Uber rides in Manhattan increased by 3.82 million in the same time period, the complaint says. The complaint also cites Uber as a primary contributor to the July bankruptcy filing of 22 taxi cab companies run by mogul Evgeny Freidman and the state’s seizing of a credit union that specializes in medallion loans back in September.
TAXI MEDALLION PRICES HAVE FALLEN 40 PERCENT
The plaintiffs include the Melrose, Progressive and Lomto Federal credit unions, which have loaned upwards of $2.4 billion for more than 4,600 taxi medallions; individual medallion holders; and the Taxi Medallion Owner Driver Association and League of Mutual Taxi Owners, both of which collectively represent more than 4,000 medallion holders.

“Defendants’ deliberate evisceration of medallion taxicab hail exclusivity, and their ongoing arbitrary, disparate regulatory treatment of the medallion taxicab industry, has and continues to inflict catastrophic harm on this once iconic industry and the tens of thousands of hardworking men and women that depend on it for their livelihood,” the complaint reads. Uber did not immediately respond to a request for comment.

WWE Smackdown

WWE-Smackdown Austin Texas

WWE-Smackdown Austin Texas


WWE SMACKDOWN will return to the Frank Erwin Center for an action-packed night featuring some of the WWE’s biggest stars on Oct. 20! This will be your chance to see Roman Reigns, WWE World Heavyweight and United States Champion Seth Rollins, Dean Ambrose, Bray Wyatt plus many more of your favorite WWE Superstars and Divas! Card is subject to change. WWE offers the best value in entertainment, with tickets starting at $15. You will get %20 off Taxi Fare when you mention this Ad.
Visit website for price range.

WWE SmackDown: WWE SmackDown is a professional wrestling television program for World Wrestling Entertainment (WWE). As of 2010 it airs on MyNetworkTV in the United States as WWE Friday Night SmackDown. The show’s name is also used to refer to the SmackDown brand, in which WWE employees are assigned to work and perform on that program; the other program and brand currently being Raw. It is currently the only television broadcast for the SmackDown brand, though at one point WWE Velocity also featured SmackDown branded wrestling.

From its launch in 1999, SmackDown broadcast on Thursday nights, but as of September 9, 2005, the show moved to Friday nights. The show originally debuted in the United States on the UPN television network on August 26, 1999, but after the merger of UPN and the WB, SmackDown began airing on The CW in 2006. The show remained on the CW network for two years until it was announced that it would move to MyNetworkTV in October 2008. SmackDown is set to move from MyNetworkTV to Syfy in October 2010.

Due to time differences, SmackDown premieres a few hours earlier in Ireland and United Kingdom and a day earlier in Australia, India and Philippines than the United States.
Check http://www.austin360.com/ for tickets

One Taxi Driver’s Fight to Save His Medallion and His Family’s Future

Taxis Austin

Taxis Austin


NEW YORK—The night was teeming with city noises: the intermittent blasts of hip-hop from passing cars, the jubilant howls of young drunkards. But it was dim and quiet inside Jaswinder Singh’s taxi save for the sound of his children talking to him through FaceTime. Although they live in the same house in Long Island, he hasn’t seen his children in three days.

Seven days a week, Singh drives his yellow taxi from 2:30 in the afternoon until past 11 at night. By the time he gets home from the city, it is 2 a.m. Sometimes he doesn’t make it home until 5 in the morning. His seamed face and gray beard makes him look older than his 45 years.

When Singh wakes up his three children are often already at school. His wife hands him his lunch bag, stuffed with painkillers and a vegan meal, and off he goes again.

To stave off loneliness, Singh steals family moments during bathroom breaks or as he waits for passengers at John F. Kennedy International Airport.

As fine needles of rain scattered from a black sky during one recent respite, he texted his wife. She responded with a photo of their 6-year-old son modeling new shoes.

“So nice. So cuteeeee,” Singh wrote back to her.

Singh used to not mind the long hours of solitude. For the last 12 years, his driving had served as a worthy means to a middle-class life: He went from being a bankrupt man in Punjab, India, to becoming someone who owns a house in Long Island. His children attend school in a good neighborhood.

But of late, his efforts feel fruitless.

Ever since his driver left him for Uber 13 months ago, Singh has been pushing the boundaries of his body to save his family’s future.

Despite working seven days a week and sleeping an average of four hours a night, he is three months behind on his medallion mortgage payments. The bank can repossess his medallion at any time.

“Losing the medallion is not so bad,” he said. “The problem is losing the house.” Singh, like many medallion owners, had borrowed against his medallion to help pay for his home.

There are roughly 3,500 individual medallion owners like Singh in New York City. According to Javaid Tariq, co-founder of the New York City Taxi Workers Alliance, these medallion owners are on the verge of losing their taxies and possibly their homes.

As the taxi industry staggers to compete with Uber and other app-based ride-hailing companies, much has been written about the setbacks of Medallion Financial Corp. (which provides medallion loans) and fleet owners (those who own several medallions and lease them out in taxi garages).

But few have examined the lives of individual medallion owners like Singh, and how Uber has made the American dream more accessible for some while putting it out of reach for others.

Gateway to Middle Class
Before the mid-1930s, the New York City taxi industry was unregulated. There was no limit on the number of taxis and no standard on fares.

In 1937 the Haas Act created the medallion system, which required taxi drivers to get a special license and curbed the number of taxis in the city.

It required each taxi to have a medallion, a metal city permit affixed on the hood of a taxi. Without it, a driver is not legally allowed to pick up hailing customers from streets or airports.

(Uber is technically legal in NYC because its drivers can only pick up people who hail from apps.)

Yellow taxi drivers can rent taxi medallions from taxi garages or individual medallion owners like Singh.

Usually, taxi drivers save for many years before making a downpayment to purchase their own medallion taxis. They are considered an elite in the industry once they do. They no longer need to work for a garage and can even hire a driver to work for them. They can borrow money against the medallion and buy houses.

After five years of taxi driving, Singh saved up enough to make a downpayment for a medallion in 2008. The medallion was worth $450,000 at the time.

As the medallion’s worth went up, Singh borrowed against his medallion to pay for his house. With his mortgage, his debt grew to $840,000.

That was fine, and even typical, for some time. His driver paid him $2,000 a month to rent his medallion at night and Singh still drove full time during the day. He earned enough to make mortgage payments, save for his children’s college, and even take one day off a week.

His Oyster
Up until recently, investing in a medallion had been a safe road to the middle class. For decades, its value had grown exponentially.

In 1937, the medallion’s average worth was $2,500. By 2013, the medallion’s value reached its peak at $1.05 million.

Singh was overjoyed the day that he got his taxi license in New York. A switch flipped in his mind; for the first time since his childhood he felt that the world was his oyster.

Singh grew up in Punjab, a state in northern India with a large agriculture industry. He fancied becoming an attorney as a boy, but his family was not wealthy enough to pay for an overseas law education.

Instead he went on to start a successful export business with his brother. They sold and traded goods of all kinds—from blankets and zippers, to saws and pliers, to rice.

But when China joined the World Trade Organization in 2001, the Indian economy could not compete with China’s cheap manufactured goods.

Singh’s export business, along with many others, went bankrupt.

He remembered the long lines outside the embassy, where people would wait up to eight hours a day in 90-degree weather for a chance to apply for a visa. They couldn’t get out of line to eat or use the bathroom. If they did, they’d lose their spot.

Singh’s visa application was rejected four times. But he kept trying. He’d travel 300 miles each time from Punjab to the embassy in New Delhi.

In the end, he was arranged to marry a woman in Queens, New York. But he didn’t want to marry her for the sake of leaving India.

He spent more than he could afford on phone cards, having long conversations with his potential wife.

“I had to know if she was beautiful on the inside,” he said.

He realized that she was. In 2003 they married, and he joined his life with her’s in Richmond Hill, Queens, where he became a taxi driver like his father-in-law.

His brother-in-law purchased a medallion too, and borrowed against it to purchase a second medallion.

Singh’s nephew also bought a medallion in April 2014. He wasn’t in a position to do so, but the bank offered him a 95 percent loan. At the time, he didn’t suspect that the incredible offer might have been given because the medallion was about to drop in value.

None of them guessed that by February 2015, medallions would stop selling. The value of medallions would drop to as low as $700,000.

Dream Unravels
Singh’s driver left him for Uber last September. “At first I didn’t think it was a big deal,” he said. “I’ll just find another driver.”

But drivers left for Uber in droves. At McGuinness Management Corporation, a taxi garage in Brooklyn, 50 percent of its taxis were unused, the New York Post reported this August.

It didn’t help that Singh owned a wheel-chair accessible taxi—which required twice as much gas. When the sparse number of taxi drivers had a sea of cars to choose from, they avoided the wheelchair accessible cars.

Thirteen months later, Singh is still driverless and paying $4,300 a month for his medallion mortgage. His mortgage, gas, car repairs, and insurance come to $7,000 a month.

When asked about the current situation of many individual medallion owners, Tariq looked sorrowful.

“They cannot make it. They cannot make the mortgage payments driving by themselves,” Tariq said. “Many are at risk of filing bankruptcy.”

Uber, Democratizing Taxi Driving
One can’t blame Singh’s driver for leaving. The pay and working conditions are much more attractive driving for Uber.

“I drove a yellow taxi for more than 10 years, and it was a constant struggle to make ends meet,” Samuel Nunez, a Uber driver, wrote in an op-ed in the New York post titled “Driving for Uber lets me live the American dream.”

As a yellow cab driver, Nunez earned around $30,000 a year and paid the medallion owner to use his car.

With Uber, he doesn’t need to pay a garage or medallion owner. He drives his own car.

“With Uber, I make about $60,000 a year—and right now, I’m only working three days a week,” he wrote. “We’re no longer stressed about paying the bills and are more focused on spending quality time with one another and doing what we love.”

Mamadou Bah, a Uber driver who emigrated from Guinea, told the Epoch Times a similar story.

“When driving the medallion, I had to drive 12 hours a day,” he said. “Now I can stay home two to three days, and I make more money.”

“This is my medallion right here, my $300 medallion,” he joked, patting his car.

A proposed Uber cap was put on hold in City Council in July, as the city moved forward with a traffic congestion study.

In the meantime, Uber has grown to 30,000 drivers in New York City, who compete with 50,000 yellow taxicab drivers.

The Clock Ticks
Some speculate that Uber and other ride-hailing apps such as Lyft, Gett, Via, and so forth, might be the future of taxis.

But Graham Hodges, a professor of history at Colgate University who has written a book about the social history of taxis, doesn’t think so.

“I’m not troubled the medallion has fallen in value,” he said.

Hodges used to drive a yellow cab to support himself during his five years at the City College of New York, where he received his bachelor’s and master’s degrees. Hodges went on to become a distinguished Fulbright professor at Beijing University.

Since the medallion system had been an enduring gateway to the middle class throughout history, he believes it won’t lose value permanently.

“It could be a sign that the medallion is losing value,” Hodges said. “Or it could also be a sign that people are holding back and waiting to see what happens.”

But how long will it take for the medallion to rebound? Singh is running out of time.

The Seizure
Singh feels a twinge in the pit of his stomach whenever he remembers how his son doesn’t spend the dollars he receives from his grandparents.

“Someday when I save up a lot of money I will give it to you so that you can take a day off,” he recalled his son saying. But Singh felt that he had no choice but to work even harder.

In April, the bank seized his medallion.

In a fit of panic, he borrowed money from dozens of friends and family in India to come up with the $16,000 he needed to get his medallion back.

But in May 2015, the First Jersey Credit Union sent him a letter saying that since the medallion value has gone down, Singh owed the bank $177,173.

Singh needed to pay within 10 days. Otherwise, the bank would take him to court and he “was liable for legal court costs,” according to the document.

Singh managed to negotiate with the bank and put off the payments.

But by October, he was three months behind on medallion mortgage payments once again. Singh felt demoralized.

He went to the emergency room twice in September for an overwhelming bursting sensation in his stomach.

It turned out Singh has kidney stones. But his main reaction was frustration that he had to go to the hospital on a weekend, when driving was most profitable.

“I’m scared something will happen to him,” said Ruby Singh, his wife. “He’s sleeping only four to five hours. He’s losing his weight.”

Correction: An earlier version of the article incorrectly stated that Jaswinder Singh owned First Jersey Credit Union $177,173,98. He owed $177,173 and 98 cents. Epoch Times regrets the error.

ELTON JOHN And His Band Are Coming To Austin Texas

Elton John in Austin SOON

Elton John in Austin SOON

ABOUT THE EVENT
Circuit of The Americas (COTA) is thrilled to announce a very special concert performance by Elton John & His Band on Sunday, October 25, 2015, following the FORMULA 1 UNITED STATES GRAND PRIX (F1 USGP). One of the most acclaimed and beloved artists of our time, his spectacular stage shows are attended by audiences around the globe. Race fans will enjoy a turbocharged two-hour set featuring all of the iconic hits and classic album tracks spanning Elton’s incredible five-decade career on the new festival lawn located in the Circuit’s north infield. Accompanying Elton on stage will be his band featuring, Nigel Olsson on drums (part of Elton’s original three-piece band) as well as musical director Davey Johnstone (who first recorded with Elton in 1971 and joined the band full-time a year later) on guitar, Matt Bissonette on bass, John Mahon on percussion, and Kim Bullard on keyboards.

Elton John is one of the top-selling solo artists of all time, with 37 gold and 27 multi-platinum albums as well as 58 Billboard Top 40 singles in the United States, and he has sold more than 250 million records worldwide. Elton holds the record for the biggest-selling single of all time, Candle in the Wind 1997, which sold 33 million copies, as well as for most appearances on Billboard’s Adult Contemporary chart, with his 2013 single “Home Again” marking his 69th entry. He has also written the music for stage and screen successes Billy Elliot: The Musical, Elton John and Tim Rice’s Aida, and The Lion King, which was recently named the highest-grossing stage show or film release in the world.
Among the many awards and honors bestowed upon him are five Grammys, a Grammy Legend award, a Tony and an Oscar, a Best British Male Artist BRIT Award, induction into the Rock and Roll Hall of Fame and the Songwriters Hall of Fame, the Kennedy Center Honor, Legend of Live Award, 12 Ivor Novello Awards and a knighthood from HM Queen Elizabeth II for “services to music and charitable services.” Elton has recently been named the first recipient of the BRITs Icon Award, which recognizes the very highest level of British music achievement, presented only to iconic artists whose writing, recording and performances set them apart as having made a lasting impact on the nation’s culture.
*please note this performance is taking place in the Circuit’s North Infield and not at Austin360 Amphitheater*
Taxi discount click here

Getting Over Taxis

Taxi Austin

Taxi Austin

I find Susan Crawford’s arguments in Getting Over Uber puzzling and unconvincing on a number of fronts.
First, consider the statement:
Uber drivers have a tough time making a living; they’re responsible for their own cars, fuel, benefits, maintenance, tolls, and certain insurance as well as the kickback to Uber that takes a substantial slice out of every fare they pick up…. Uber consistently squeezes its drivers as tightly as it possibly can; new drivers are paying an even higher cut to Uber than the first generation did.
Most taxicab drivers also have a tough time making a living. They aren’t responsible for their own cars, maintenance, and some insurance, but they do have to pay for their own fuel, tolls, benefits (because 87% of all taxi drivers in the US are independent contractors), and they pay a daily rental fee that is far higher than any possible slice of every fare that an Uber or Lyft driver picks up.
The charged language “kickback to Uber” is particularly loaded and inappropriate, given that the slice of a driver’s daily revenue that is taken by Uber is actually less than that taken by the typical taxicab owner, albeit in the form of a daily rental fee for the taxi rather than a percentage of every fare.
I’m not going to bother rebutting Susan’s statement:
“[Uber drivers] may or may not know where they’re going, and they may or may not be driving cars that are safe.”
given the experience that I have had (and Susan herself must have had) in taxis whose drivers don’t know where they are going, driving old rattletrap cars that wouldn’t pass an Uber or Lyft inspection.
Do the Math: Taxi vs Uber
A taxi driver typically rents his or her taxi from the owner, usually for a fee of $100 to as much as $130 a day (or, assuming the driver works 5 days a week), a total of $2000 to $2600 a month.) This is referred to as “the gate.” The driver keeps 100% of all fares and tips over that amount, but that is the cost of entry.
Now, compare Uber: you provide your own car, but you pay no daily rental fee. You keep 70–75% of every fare (Lyft gives the driver 80%, and if you’re a full time driver with Lyft, you keep 100% of every fare.) For the 25–30% share that Uber keeps to equal a $100 Gate fee for a taxicab, the driver would need to generate $400 per day in fares. That’s the equivalent of $2000/week or $100,000/year!
Given the enormous pushback when Uber claimed that some of their drivers could make as much as $100,000/year, this number seems unlikely. (felix salmon had glowing things to say last year in The Economics of “Everyone’s Private Driver.” After a scathing rebuttal from Tom Slee, Salmon wrote another, somewhat apologetic correction about having misinterpreted Uber’s projections of possible driver income.) That means that the share of the driver’s income taken by a taxi company is far greater than the amount taken by Uber.
This comparison isn’t entirely fair, because the taxi driver does not have to provide his or her own vehicle. But what does that cost?
A quick internet search shows that I could lease a 2013 Toyota Camry from Uber’s leasing affiliate for payments as low as $109/week, and Allstate told me I could insure a similar vehicle for $103/month. That works out to about $25 per day, assuming that the vehicle is driven 5 days a week. That is probably on the low side, but the point remains: it is a fraction of the cost of the daily rental that most taxi drivers pay.
There is one other simple thought experiment that you can make to understand the fallacy of Susan’s argument. And that is to ask how taxi owners make their money. They rent their cars to drivers. If the rental income they received from drivers weren’t higher than the costs of owning, insuring, and servicing the car, not to mention the cost of purchasing the medallion (which can cost many hundreds of thousands of dollars), they would be out of business.
The Path To Ownership
Using this back of the napkin math, it appears that on the cost side, being an Uber driver is a better deal than being an independent taxi driver. And while the amount that you can make as an Uber driver is a matter of considerable debate (see Felix Salmon vs Justin Singer), it is almost surely higher than the median income for taxi and limousine drivers in 2012 reported by the US Bureau of Labor Statistics.
So why don’t more taxi drivers switch? Many do. But I suspect that the reason others do not is the same reason that many low wage workers can’t get better jobs: they can’t afford to. Buying a new car of your own may be cheaper than renting a taxi by the day, but you have to have good credit to make the purchase. As is so often the case, the poor pay more because they can’t afford to pay less.
Uber recognizes this problem, and has been trying to make it easier for potential drivers to acquire their own cars. Their first foray into vehicle leasing was a disaster, with many drivers getting in over their heads with cars they couldn’t afford, paid for with leases they couldn’t get out of. Recognizing this problem, Uber has been working hard to make car leases both more affordable and more flexible.
There is one set of taxi industry players that is particularly hard hit by disruption from Uber and Lyft, and that is medallion owners. (I am particularly sympathetic to the plight of individual medallion owners, many of whom worked their way up from being drivers.) They paid a lot of money for the exclusive right to operate taxis in a particular city, without competition, allowing them to keep fares high, and they are being challenged by upstarts not just with better technology and better user experience but with a different economic theory: that if you can drive down fares sufficiently, you will increase utilization to the point where people choose on-demand transportation over the alternative of owning and driving their own car. And further, they are betting that that increased utilization will provide better income to drivers despite the lower fares. (See my previous piece, Improving Uber’s Surge Pricing, for more details.)
There is no question that there was a path to ownership of a valuable asset in the previous regime of taxi medallions that is no longer available in the Uber era, but that opportunity was available to few, and most taxicab drivers are simply low-paid independent contractors with high costs and little ability to grow their income.
Tim O’Reilly