BY DANIELLE BRODY AND EVAN FALLOR
As Uber expands its fleet into metropolitan areas across the country, traditional cab companies in Westchester and Fairfield counties are doing all they can to push back on the tech giant that is taking business from them in an unprecedented way. Yet Uber said its growing user base enjoys the affordable, tech-savvy service and drivers appreciate its flexible work model.
Buddy Boskello, owner of Greenwich Taxi for several decades, is on the front lines of resistance to the private company, recently valued at $40 billion. His company and 14 other Connecticut cab and livery companies ”” usual competitors for passengers ”” banded together in May 2014 to sue Uber and fellow app-based ride-hailing company Lyft Inc. in U.S. District Court, citing unfair competition and economic harm to their businesses.
San Francisco-based Lyft, citing an “uncertain regulatory environment” in an email to employees, suspended its Fairfield County service in February.
Uber, on the other hand, continues to thrive in Connecticut despite the pending lawsuit. In its first year, Uber Technologies Inc. said its 4,000 driver partners in Fairfield and New Haven counties made $8 million after introducing the service there in April 2014. Uber launched its New York City service, which includes trips to and from Westchester, in 2011.
- Taxis await customers outside the White Plains train station. Photo by Evan Fallor
“What is clear is that Uber has grown very rapidly, which really does show that there was maybe a gap in the service and the reliability that people were looking for in transportation,” Matt Powers, general manager of Uber Connecticut, said.
Uber”™s independent contractors drive their personal cars to pick up passengers who request rides and pay for them through their credit card connected to the company”™s free smartphone app. On the app, customers can track the driver in real time and see fare estimates as well as the driver”™s picture, car and phone number.
Riders and drivers can rate each other after the trip, giving drivers an incentive to make it a positive experience, Powers said. Some drivers offer riders cellphone chargers, bottled water and the option to change the car”™s music on Spotify, which has a partnership with Uber.
A trip from the Greenwich train station to an address in downtown White Plains would cost $48 in Boskello”™s taxi. The same route in an Uber would cost $25 to $33 in uberX, the economy car, or $65 to $85 in the standard Uber black car. Uber fares vary due to traffic, weather and other factors.
Boskello said train pickups account for half of his business, and Powers said one-third of rides in the county occur within a quarter-mile of Metro-North stations. Powers said more residents are seeing Uber”™s uses for other types of trips, including grocery store runs and meetings.
Unlike traditional taxi companies, Uber does not have a dispatch service, own cars or operate local offices. The livery and taxi companies in the lawsuit say they have invested significant capital and resources to develop systems and infrastructure and comply with regulations. Boskello said it is hard for companies with history in the community to compete with Uber because of its technology and current exemption from strict regulations taxi companies face.
“Potentially what they”™re gonna do is cause an uneven playing field,” he said. “To see another company come in and just take over a lot of the business that we have is very disheartening and economically hurtful.”
Because Uber is classified as a transportation network company, or TNC, and not a taxi company, it does not have to comply with the varying state regulations that require extensive background checks, frequent car inspections and jurisdiction limits.
That could change in Connecticut. Earlier this year, Central Connecticut State University completed a study with recommendations for the General Assembly to improve TNC safety through statewide regulation. A proposal to require TNCs to perform background checks on drivers, buy insurance and perform vehicle safety inspections passed in a House of Representatives vote May 30. The Senate was not able to vote on the bill before the end of the legislative session June 3 due to debate on the state budget.
“We felt as though we needed to regulate them in some shape or form to make sure that the people who are using it are safe,” Rep. Antonio Guerrera, chairman of the House Transportation Committee, said in a June 2 press release. “This bill does do that.”
Powers said he has had positive conversations with politicians who mostly support the company. He said he approves of the legislation and that if accepted, it will codify standards for this new type of technology.
While cab company owners claim Uber drivers are generally not as safe as cab drivers, Powers said the company has a thorough background check system run by a third party that is deemed more than sufficient in 20 states. The tech company also offers training to drivers online and in person.
Across the border in Westchester, cab owners have voiced concerns but haven”™t seen the same progress as their Connecticut cohorts because of multiple regulators. Taxi rules are determined by each municipality, and the Westchester County Taxi and Limousine Commission handles regulation on county-owned property, including Westchester County Airport.
Barbara Monohan, CEO of the TLC, said only taxi drivers licensed with the commission can make pickups at the county airport and bring passengers to New York City. She said she has received numerous complaints from cab company owners and drivers that Uber drivers have been violating that rule.
“If there”™s a problem, then at some point we will have to address it,” Monohan said, calling Uber”™s actions “illegal.” “I think that as the world changes so will TLC regulations.”
Boskello said in Connecticut, taxi drivers must either start or end trips in the town in which they are based, limiting service options. Boskello, along with other owners, said they would have preferred Uber to offer their technology to cab companies rather than bringing more cars into the market.
“Their idea is unique and it”™s beautiful,” Boskello said. “I just think it”™s a hell of an idea.”
Powers said Uber runs a completely different business model than that of traditional taxis. Uber drivers keep 80 percent of the ride fare and get paid weekly, Powers said. Traditional companies charge drivers a daily or weekly fee to lease the car, while Uber drivers use their own.
“By allowing (driver) partners to operate assets that they already own, that minimizes the cost to them,” Powers said. “That also gives them the flexibility to work when and how they want.”
Some traditional companies have invested in developing Web- and phone-based apps similar to Uber”™s to keep up with their tech-savvy competitor.
Andy Stoppelman, CEO of Red Oak Transportation in Port Chester, said he was initially hesitant to pay to develop an app but said it has proved phenomenal for business. Yet his mainly corporate clientele is no longer as willing to wait the 20 minutes if no car is available right away.
He said his company is usually the first call made for a ride. “We”™ll still be the first line of defense,” he said.
Swapnil Pandya said he takes an Uber from his job at a Manhattan accounting firm home to Dobbs Ferry most nights. Pandya, 22, said he likes the convenience of booking from his phone and added that Uber cars are often cleaner and provide a smoother ride than a cab.
“When leaving the office late at night, the last thing I want to be worried about is if I will be able to find a yellow cab to get home,” he said. “With Uber, my car is always waiting there when I walk outside.”
Marc Necatera, co-owner of Stamford Taxi, said it is difficult to compete with Uber because the drivers can make pickups statewide and they charge lower rates. He believes the state should do more to regulate Uber.
Necatera said Uber is also making it harder to retain drivers but that some who have left for Uber are coming back to the company. Stoppleman, of Red Oak, also said some Uber drivers have come to work for him because they couldn”™t make enough money.
Powers said the average Uber driver is part time. Some are transplants from taxi and limousine companies looking for more flexibility; others use Uber to make extra income.
Boskello, whose company is part of the pending lawsuit, has also seen drivers leave for Uber and come back. He said his cab company and others in the state receive a certain number of permits for cabs based on need and population. He said he worries if Uber takes even a small amount of business, it will hurt his company.
“It”™s splitting up a piece of pie,” he said. “There”™s only so many pieces in that pie. It barely lets the companies that are here now stay healthy. If they even get a quarter, everything will start to fall apart.”
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