Even if Uber Were a Normal Cab Company, It Couldn't Operate in Dallas

LeandreJohnsUber.jpg
Uber Dallas' Leandre Johns
Today, in the first of three public forums on taxi and limo regulations, City Council members learned what has been clear since Dallas began its crackdown on Uber: The system, particularly for taxis, is completely rigged.

That's partly by design. Historically, because cabs fill an important gap in the local transportation network, the city has treated them as much like a utility (e.g. gas and electricity) as an ordinary business, hence the heavy regulation and high barriers to entry. It's all in the interest of ensuring consistent and reliable service. That's the idea, anyway.

What's actually happened is that the regulations, and the way the city has applied them, have screwed consumers and stifled competition, not just from tech-centric startups like Uber, Sidecar or Lyft, but from any entrepreneur hoping to break into the traditional taxi business.

Case in point: Jimmy Martin, director of code compliance in Dallas, testified at the hearing that the number of cab permits is capped at 2,020. The number is calculated each year based on traffic at DFW International Airport and Love Field and it's designed to make sure there aren't so many cabs on the road that the average driver can't make a living.

See also: Cabbies Say There's a Taxi Monopoly in Dallas, and They're Fighting to Break it Up

"A decade ago, the cab drivers came to the city and they were concerned because [the number of taxis] was unlimited, and what they were seeing as the cab drivers was that there were more and more cabbies and they couldn't make an income," said Assistant City Manager Jill Jordan.

If the city is going to treat taxi service as a utility, then it has a legitimate interest in making sure companies and drivers can stay afloat, and a cap on permits isn't wholly unreasonable. But it undercuts the purpose of the rule and becomes a weapon against competition when existing cab companies are allowed to squat on permits, as is currently happening in Dallas.

As it stands, all 2,020 permits are spoken for, yet there are only 1,730 cabs on the road. That leaves Dallas 290 vehicles shy of its optimal number of taxis, and it prevents new companies from breaking into the market.

No figures were available at the hearing on what companies are keeping those permits in their back pocket, but it's a fair bet that Yellow Cab, which controls about three-fourths of the local taxi market, is sitting on some of them.

A handful of committee members -- Philip Kingston, Scott Griggs, Lee Kleinman, Sandy Greyson -- wondered whether the permit cap should scrapped, or if there could at least be a rule that caused unused permits to sunset.

"Why don't we just let the market decide how many should be out there?" Griggs said.

But this was not a meeting about changing rules; it was about learning the ins and outs of the current rules. When Griggs began to muse on the wisdom of effectively treating cab companies as a regulated monopoly, committee chairwoman Vonciel Jones Hill cut him short.

"Your comments are more attuned to the third sector of these hearings," she said.

Send your story tips to the author, Eric Nicholson.

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44 comments
ryan762
ryan762

It's strange to me that it seems normal (to the city) to restrict the number of taxi cabs that can operate supposedly to allow each individual cab driver to make a living but if I went to the city and said they should limit the number of, let's say, bad novel writers (like myself) in order to make sure each of us could make a living, I'd get laughed out of City Hall.

Sotiredofitall
Sotiredofitall topcommenter

Maybe if JWP had part of the ownership all of Uber's problems would disappear?

WylieH
WylieH

Another side to this Yellow Cab problem is the company's exploitation of drivers.  City staff falsely claims that the limits on taxicab permits are for the benefit of drivers--- this is a baldfaced lie, and City staff knows this.


The drivers are NOT employees of Yellow Cab, they are independent drivers who pay to access the Yellow Cab dispatch system.  To the extent limited competition results in taxi cab drivers making more money, Yellow Cab simply raises the rates charged to drivers, so that all the benefits of the monopoly accrued to the benefit of Yellow Cab and to the detriment of BOTH drivers and passengers.

rexbarron
rexbarron

Can't count the many times I've had friends call me frantically needing a ride to the airport because the cab company they called in Dallas is late or never showed.  Uber is fantastic and we should adopt them as much as possible and threaten REPLACE yellow cab (maybe that will make them clean up their act) with them, as much as possible.  The stone wheel was done away with because it did not function as well as the new model. I say Yellow Cab should step it up or step out.  I say give Uber and Yellow even access!

xmantx
xmantx

the cab companies blow. It is their fault they suck. Dirty, rude, and don't like taking credit cards ever. This isn't 1985.

AverageDallasite
AverageDallasite

 Just this past Saturday I called Yellow Cab to pick me up at a bar and I was only going about a mile away. The driver calls me to confirm, I did, he says he will be there in 5 minutes. After 35 minutes an Executive Cab pulls up to drop some guys off, I flag her down she takes my fare. It cost me $7 to go 1 mile. $7 for a mile? 1 passenger? Really?


I normally would use Uber but thought since I was going 1 mile that surely a cab could handle it. Nope. Yet another horrible cab experience in my hometown.

dallasdrilling.wordpress.com
dallasdrilling.wordpress.com

The ever pious Hill is going to extraordinary lengths to protect Yellow Cab. She, like others never met a bag of cash that she didn't like.

Bless her Christian heart.

Sharon_Moreanus
Sharon_Moreanus topcommenter

I would like to see a DYC employee handbook.

DFWconspiracy
DFWconspiracy

The average Dallasite Joe Uptown loves Uber. It's classy, dependable and efficient. Who doesn't like Über? The Yellow Cab conspiracy, which owns the interim city manager. That's why they're fighting Über tooth and nail, using hard line tactics like the Vice Squad (I guess there's no more prostitution in Dallas.) Yellow Cab and the others are a joke. Talk about sleazy. The dispatchers are literal crack-heads, the drivers are dead-tired or crooks because they get paid shit, and their owner is a fat cat counting his money on another side of the country. This city is going down the drain.

Montemalone
Montemalone topcommenter

I live in Uptown, very dense, and never see cabs on the street.

What kind of World Class City doesn't have cabs cruising the street?

Leshabs77
Leshabs77

The city council really needs to do a study on the costs cabs are charging customers and service or lack of service they provide. if they want more Dallasites to take cabs (and for DWI reasons, I imagine they do), the price to take a taxi needs to come down.

Uber is not the answer. The minimum charge to use Uber is $50 and I don't know anyone who has ever only paid the minimum. The charge is usually way higher. 

lankyw
lankyw

I was talking with a a person I know today. She told me that she took a cab from Parkdale to Oak Lawn Dr,s Office and Payed almost $100.00 it is only 6 or 7 miles away. The cab drivers want cash. Another problem with cab company.

pak152
pak152

"hence the heavy regulation and high barriers to entry. It's all in the interest of ensuring consistent and reliable service."

nope it is designed to create a monopoly and maintain high prices. "consistency and reliable service" has nothing to do with it. overall it was designed to restrict competition. Competition ensures consistent and reliable service, a monopoly couldn't care less about either.

"today Judge Jane Carroll of the Milwaukee Circuit Court struck down the city’s taxicab law that outlawed competition in the taxi market. The law, implemented by the city in 1991, caused the price of a taxi permit to rise from $85 to over $150,000."
http://reason.com/blog/2013/04/17/milwaukee-judge-slaps-down-taxi-protecti


"New Orleans caps the number of CPNCs at 1,600, creating artificial scarcity and a lucrative grey market. CPNCs can cost upwards of $67,000, with the average price around $26,000. The city has made almost $120,000 in transfer fees since 2009. As The Times-Picayune reported in April, one man even owns 13% of all CPNCs."
http://www.ij.org/the-big-easy-needlessly-burdens-taxi-cab-drivers


"On August 1, 1995, three minority entrepreneurs launched Freedom Cabs, Denver’s first new taxi cab company in 50 years.  For the five decades prior to that day, the Colorado Public Utilities Commission refused to license any new cab company, citing laws and regulations that effectively denied entry to the market and firmly entrenched a three-company oligopoly. " 

http://www.ij.org/jones-v-temmer

"Vans are strong competitors with the Transit Authority's local bus routes. They appeal to riders because they offer more frequent service, are faster, charge less, and provide a seated ride, even in rush hour. . . .[Vans] often serve bus routes with long lines,. . .have courteous drivers, are convenient in bad weather,. . .[and] can be more passenger sensitive than large buses. It is not uncommon for vans to drop off and pick up passengers at their residences. . . .[M]any riders perceive [public] transit as a poor alternative."
http://www.ij.org/ny-vans-background

Dub919
Dub919

So, if the number of permits are capped, wouldn't a better solution be to insert a limit on the number of permits one entity can control?  Or, make it an owner/driver medallion system instead of a company having control?


I'm genuinely asking as I don't know what the solution is...

jmckee3
jmckee3

The simple fact is that Yellow Cab effectively has a monopoly and uses that monopoly to abuse customers and I'm sick of it. I was with a large group on Friday for dinner and Uber came up and it was the same story, all of us 30 somethings had stories about Yellow Cab being down right abusive and several of us had stories about being kicked out of cabs that refused to accept credit cards even though they are required by city code to accept them. An annoyance that was underscored when one of the members of our group was struggling to come up with a few dollars cash to tip the valet and it turned out none of us was carrying any cash, just cards. The same thing happened at a condo meeting with Kingston, I was not surprised to see how many of my neighbors across the age spectrum were big fans and users of Uber, actually I would say that I see Uber serving the building as much if not more than taxis.


The solution is clear to me, Yellow Cab is the problem, their monopoly should be broken up. If they don't find that acceptable (They of course won't) then allow Lyft and Uber to serve those of us that are unhappy with the service or lack there of that Yellow Cab provides. That and Uber and Lyft seem to be doing an okay job at self-regulating but I would like to see the code amended to put in city background checks in place and requiring the ride sharing companies provide a minimum level of liability insurance that extends to anyone driving with them. Actually let me add another thing, the ride sharing companies that wish to offer service in Dallas should be licensed as well and fees paid for them should be used to put in a city oversight and arbitration for disputes with a specific agreement that the ride sharing companies can not act punitively against the users if a dispute is decided in their favor, I find myself a little afraid to rate drivers under 5 stars.  

ThePosterFormerlyKnownasPaul
ThePosterFormerlyKnownasPaul topcommenter

"But this was not a meeting about changing rules; it was about learning the ins and outs of the current rules."

Does anyone see the irony in this situation that our city council has to be informed of what it has done?  After all, these rules would not be in place unless the city council implemented them.

Forget it Eric, it's Chinatown.

P1Gunter
P1Gunter

It always amuses me how politicians flip flop on De - regulation based on the depth of corporate pockets. We had to De - regulate electricity "because it was good for consumers and the free market is vital" and prices have soared but we need to regulate cabs "to protect jobs because free market can't be trusted."

Just follow the money.....

claytonhenry
claytonhenry

Even if the old rules worked for communities across the US in days gone by, now with new technologies our citizens demand greater freedom of choice and access to these new technologies. We want competition to be our watch word and guide, not government meddling in the marketplace, nor the abuse of bureaucratic protectionism. 


We will see if our politicians and city staff - particularly A.C Gonzales, assumed heir to Mary Suhm and at the very heart of the mis-handling of this entire situation - will realize a new day has dawned, change is good, and acting on the will of Dallas' citizens is a better path than to once again succumbing to the dark side of protectionism and good 'ol boy politics.

MaxNoDifference
MaxNoDifference

Gee, I wonder whose pocket my esteemed councilwoman, Madam Hill, is in?

TheCredibleHulk
TheCredibleHulk topcommenter

@ryan762 

Two questions:

How long are the lines of novel-writers at DFW?

Will I have to pay extra if I soil the pages?

jmckee3
jmckee3

@AverageDallasite Consider yourself lucky that they even took you, I regularly attempt to take cabs from the gayborhood to Uptown and at around 2-3AM most of the cabs will refuse the fare, sometimes they will ask you where you are going before they let you in the cab but often they will kick you out if you are already in it if you are going to Uptown. Oh and forget using a credit card, that isn't happening.


Also the "fuel surcharge" is punitive for sorter rides, it's nothing on a longer cab ride but it can make up a huge percentage of a short ride.

ThePosterFormerlyKnownasPaul
ThePosterFormerlyKnownasPaul topcommenter

@Montemalone 

It is because the city cab ordinance prevents cabs from being hailed from the side of the the street or dropping off someone at streetside.  Cabs must be dispatched to an address and must drop off the passenger at an address.

Deelio
Deelio

@Leshabs77 There is also Uber X, which I think has discounted rates. I know I've taken several rides in the $30-40 range, inclusive of tip.


sversky
sversky

@Leshabs77The minimum for Uber is 15 Uberx is 6 and Lyft is 5.  There are more options out there besides the black car Uber.  Uber is known to surge their rates and you will get the $50 minimum.  They do this a lot.  


I did try to get a taxi recently from the Oaklawn area to Downtown.... $25 bucks!  Granted this was during the ice storm.   Yeah I ended up using Lyft for a 6 dollar rate.  Uber was charging 4.5x's their rate that night along with the Taxi companies apparently.

rexbarron
rexbarron

@Leshabs77I use Uber all the time..all over the country..I've never once had a charge as high as 50!  You're making that up.  Most of my rides have been fairly long and they have ranged between 25-35.00 max  And running around town has cost me as lost 11-18 dollars.

xmantx
xmantx

@Leshabs77 You have obviously haven't used the service. You have no clue. $15 min and cheaper for UberX or Lyft. Try again.

jmckee3
jmckee3

@Leshabs77 The minimum is $15 which is higher than a ride from Uptown to the gayborhood or downtown in Uber costs which is just a few dollars more than a cab ride.

fredgarvinmp713
fredgarvinmp713

For what it's worth, I've ridden Über a few times and I've paid less than $50 on some occasions, and a little over $50 the other times; not sure what your $50 minimum refers to.

That being said, though, Über IS the answer for a growing consumer base. The cars are nicer and cleaner, and the drivers courteous. It won't replace cabs, as Über's level of service costs more and many aren't willing to pay.

Yellow Cab wants to make money on trips back and forth to DFW, so as others have noted on DO, you may not get them to drive you half a mile from the bar to home. Anytime I've ever used Über, they were there in <5 minutes, and the app allows me to hop in and out seamlessly.

No more calling a dispatcher, waiting 30 minutes, then having the cabbie pretend his cc reader doesn't work, claim he doesn't have change, etc. etc. I'll pay Über's premium any day.

pak152
pak152

@Dub919no caps, the caps are designed to restrict competition

markzero
markzero

@ThePosterFormerlyKnownasPaul @Montemalone  What was the rationale behind that? If taxis were allowed to pick up casual fares the system surely could support a lot more drivers, and a cap either wouldn't be needed, or could be much higher. Competition would also tend to lower the fares.

WylieH
WylieH

@sversky This is what I implied, in another post, but should have stated directly.  Yellow Cab also "surges" their rates during ice storms, etc., but they do it an illegal, opaque manner, by shaking down individual customers.  In contrast, Uber makes it easy to see what you will be paying in advance.

sversky
sversky

@rexbarron@Leshabs77This is real stuff.  Uber constantly jacks their rates up.  Read up about it.  She is not making it up. The weekend of the ice storm we had.  They had a 4.5x surge on their rates.  Ridiculous!

sversky
sversky

@xmantx@Leshabs77Uber does in fact have a reputation of surgeing their rates.  They do it all the time.

Leshabs77
Leshabs77

@jmckee3 I read on Twitter when Uber first hit Dallas that the minimum charge when you get an SUV was $50 and that Dallas was only going to be getting SUV's. No sedans. Obviously this has changed in the last few months. My friend and his wife were charged $115 to go from Northwest Hwy to the American Airlines Center. It was icy that day. Maybe that was the reason for high charge. My cab ride that day was $45 and I was coming from farther away. 

Deelio
Deelio

@sversky I don't mind it. I know exactly what my ride will cost, and I know when the person will arrive to pick me up. Compare that to cab companies: you're lucky if they show, and you're luckier still if you can pay with a credit card. Ask them to tell you what your rate will be?


WylieH
WylieH

@sversky When they surge their rates, you can choose whether or not to use them.  You are, of course, free to use Yellow Cab.  Unfortunately, however, you will find no cabs available.  In other words, you have two alternatives:


1)  Uber - rapid availability at much higher than normal rate.


2)  Yellow Cab - no availability at standard rate.

Deelio
Deelio

@WylieH @sversky In all fairness to the cabs, when it's icy, the cabs (who don't use AC) get very cold. When the inside of the cab is ice cold, you can't smell the usual urine/vomit aroma common in most cabs. Why shouldn't they charge a premium if the cab doesn't smell like a portapotty?


WylieH
WylieH

@sversky Uber surges rates when high demand exists, in an effort to maintain availability.  During the ice storms, for example, Uber surges rates, but you can easily get one at a higher price.  Yellow Cab does not (formally), but good luck getting one... if you DO manage to get a Yellow Cab during an ice storm, the driver will frequently attempt to shake you down for more money beyond the legal fare by becoming verbally abusive and physically intimidating.

Guesty
Guesty

@Leshabs77 @jmckee3 Uber has had sedans in Dallas for the entire time it has been active here.  I usually pay between $15-$25 each way, but my trips are relatively short (e.g. Uptown to Greenville Ave.).  

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