Flying the colors, building an Army

Today is the due date for new individual Passenger Vehicle Licenses (PVL). A PVL, or "taxi medallion" gives a person or company the rights to transport passengers by way of flaggers (passengers that hail on the street), county taxi stands, or pre-arranged reservation. In Montgomery County, PVLs are "owned" by individuals or fleets.

Fleet-owned PVLs:
There are four fleets -- Barwood, Regency, Action, and Sun. Each fleet has a distinct color -- blue, white, maroon, green. 2/3 of PVLs are owned by a fleet. Due to their size, a fleet is able to finance fleet activities including vehicle purchase, vehicle maintenance, dispatch center, personnel, etc..

Individually-owned PVLs:
About 1/3 of the county PVLs are owned by individual drivers. These drivers can apply for a PVL during a new PVL issuance or purchase a PVL on the open market (value approx. $60,000, currently).

A driver benefits from PVL ownership because he/she gains: highly reduced "lot fee" to join a fleet (and get all fleet benefits including dispatch, customer service, vehicle maintenance facility, etc..), equity in the PVL value, and can employ additional drivers.

Once a driver owns his/her PVL, he must purchase and insure a vehicle AND associate with a fleet. To associate with a fleet, the PVL owner must "fly the colors" of that fleet (Barwood Blue, Regency White, Action Maroon, or Sun Green). Their vehicle will look like any other vehicle in that fleet. They become a fleet warrior.

You can think of a taxi driver as an independent warrior. Each has certain skills that make him/her prepared for the field of battle (in this case, battle is taxi service). Some drivers have a book of personal clients, some have superior customer service skills, some are technologically savvy, etc.. The key to building an empire is recruiting and harnessing the skills that each warrior (taxicab driver) possesses. It is good to recruit the best warriors to drive your fleet cabs.

Of great importance is recruiting the warriors that possess their own horse (PVL and vehicle). These warriors have extra incentive to care for their horse/charriot because they own it. These guys/gals can defect an army (fleet) at any time so it's important to keep them happy. They generally end up on the most powerful army: with the most customers, the best customer service, the best driver service, the best deals.

taxipass, taximagic, cabulous, ubercab, joetaxi

There are some very cool and innovative companies that have sprung up to help deal with some of the issues facing the taxi world, namely: Taxipass, Taximagic, Cabulous, Ubercab, and Joe Taxi among others...

Here are the issues that these companies are helping the taxi industry with:

1. Dispatching: As a customer, are you sick of calling a rude dispatcher that gives you unreliable or false information and leaves you waiting for your cab for 45 minutes or more? This is a common problem in the taxi world. It is hard to manage a dispatching center and hard to get certain trips to certain drivers!

2. Credit Card Processing: As a customer, does it irk you that your driver claims that his credit card processing machine is not working? Or he gives somebody your credit card information over the phone? Or your driver flat-out rejects your trip because you are a business traveler that must pay using a credit card?

Enter some the tech-savvy and silicon-valley-hip....

Taxipass: Taxipass can dispatch a cab for you, and enables you to pay for said cab using a Taxi-Pass (a voucher that you give to the driver that displays your pre-payment). They also supply rear-seat technology options. They are located in airports and taxi markets. http://www.taxipass.com/

Taximagic: These guys are very tech-savvy and have a mobile app that can dispatch a cab to you. You can ever pay for your trip using your mobile phone. http://taximagic.com/

Cabulous: This Silicon Valley company networks you directly to your taxi driver and, using your mobile phone, you can see where your cab is located at any time, before - during - after the trip. You can see where a certain cab is a "hail" it using your phone. http://cabulous.com/
UberCab: Is actually a black car service, but enables you to make online or mobile reservations and pay using your mobile phone. They have standard low rates country-wide. http://www.uberapp.com/

Joe Taxi: This is a mobile app from kayak.com. It enables you to find a cab service, then once you are in the taxi, you can use your iphone accelerometer to create a profile on the driver. http://www.joetaxi.com/

As you can see, there's big stuff going on. Entrepreneurs are seeing the opportunity within the taxi world to "shake things up" to improve service. All these guys provide new solutions to your dispatching and credit card needs that cab companies have struggled with for so long.

Community: Sun Cab Drives the Silver Spring Thanksgiving Day Parade

Sun Cab is committed to community outreach and community service. As part of this commitment, we participated in the 13th Annual Thanksgiving Parade in downtown Silver Spring over the weekend!

We had two of our specially branded hybrids in the parade procession itself, helping to spread the good work about our groundbreaking hybrid taxi service. Sun Cab remains the only taxi provider in Montgomery County to have fleet-owned hybrid vehicles. In fact, Sun Cab has 30% hybrid vehicles and has committed to expanding to 60% hybrid vehicles by the end of 2011. Sun Cab is also participating in a Department of Energy program to equip our non-hybrid cabs with propane-fuel technology (another environmentally-conscious solution). We also strive to provide friendly, reliable service!

We like getting our name out into the community and participating in fun community events like the Thanksgiving Day Parade. Are you organizing a community service or community outreach event that could benefit from Sun Cab outreach or environmentally-friendly reliable cab service? Please give us a call at 240-485-2123!

For coverage on the parade, see here: http://silverspring.patch.com/articles/13th-annual-thanksgiving-parade-brings-the-holiday-spirit-to-town and watch us on TBD TV (previously News 8) on Thanksgiving Day. From all of us at Sun Cab, Happy Thanksgiving to Montgomery County!

Washington Adventist Hospital Gala and Corporate Accounts

Sun Cab is the preferred vendor for taxi service at the Washington Adventist Hospital in Takoma Park. That means that patients call us first when they need a ride from the hospital. We have installed direct-to-dispatch phones at the main entrances and we have an account whereby we will bill the hospital regularly instead of having each customer pay for each trip.

"Corporate Accounts" are a nice feature for companies, hospitals, hotels, schools, and municipalities because they can track trips, receive preferred service, get special loyalty rewards, get connected to the business community, and have more oversight (this list goes on...). And it's good for the taxi company because our drivers get more trips and the taxi company creates a better record of these account trips.

The Washington Adventist Hospital Gala featured awards to hospital Management and Physicians and a sneak peak of the new Washington Adventist Hospital in White Oak, Maryland. This state-of-the-art hospital will build upon the alread-100-year history of Adventist Hospital in the DC-area (In fact, Takoma Park was the world headquarters of the Seventh Day Adventist Church for a time). There were at least 500 supporters that showed up to help fundraise for the hospital foundation.  

The Trade Show

The Taxi Limousine and Paratransit Association has an annual convention and trade show. This year it was in Los Angeles at the JW Marriot downtown. It's always at a cool venue and always features the coolest new technologies, most hip vehicles, and lots of eclectic and sharp minds. They say it's only the top 10% of cab companies that have the budget (or they choose..) to send their people to the show. It's a place to meet the big players in the industry and get a sense of where the industry is going.

Where is the industry going? I am happy to report that this year there was a great emphasis on environmentally-friendly vehicle replacement and improved dispatching and payment technology. Large and small companies are taking it upon themselves to bring hybrid vehicles into their fleet, citing the gas savings that more than pay for the entire vehicle price (I learned that the "hybrid mandate" introduced by Mayor Bloomberg has actually been struck down in a lawsuit, but the cab owners themselves are going ahead with hybrid vehicles anyway). Companies are receiving DOE grants that pay for natural gas and propane fuel conversations. Electric car cabs are actually moving into the picture. Really exciting stuff. It seems like regulations and incentives for conversion or hybrid-updates are still sparse... bummer!

Read about the TLPA here: http://www.tlpa.org/ TPLA is a non-profit trade association for the private passenger transportation industry.

Electric Cars with Better Place in "Transportation Islands"

Here's a cool transportation company: Better Place -- The Global Provider of Electric Vehicle Networks and Services. Better Place is a worldwide team of automakers, battery manufacturers, energy companies, and governments that are creating a reliable and financially reasonable alternative to gasoline powered cars.

A problem with electric cars now is that the cars cannot travel long distances without several lengthy re-charge sessions. Better Place's answer: they have better batteries that they will swap out for your battery in a quick session.

Here are the pros:

1. Subscription Battery Replacement Service: It's like a cell-phone service where you can pay a monthly rate to use their network and replace your battery.

2. Vehicle to Grid Integration: Renewable *good* energy is inconsistent (the wind stops blowing, the sun stops shining) so their batteries can store that *good* energy and contribute back to the electric grid.

3. Branded Drive-tones: Again, like cell phones. Electric cars are silent, so drivers will need to customize the noise that their cars make for safety purposes.

How does this apply to the taxi world? It's tough to set up a network of battery swap station across a large rural area (like much of the USA), so Better Place focuses on "transportation islands" (like Hawaii, an isolated county like Israel, or a taxi service area). A taxi service area is a "transportation island" because taxis typically pick up or drop off at a particular location within a restricted geographic area. Some taxis only pick up at airports, meaning they are perfect candidates for a battery swap at regular intervals between trips.

Thinking of a taxi operator as confined to a "transportation island" makes alternative forms of energy seem more reasonable -- whether it is an electric grid like Better Place, or another alternative form of fuel (propane, e-85, bio-diesel) located at an airport, taxi dispatching center, or central location.

How to Grow your (taxi) Business

As a taxi company, it's tough to grow the business because of the high level of regulation. That is, you have to somehow acquire a permit to put an additional taxi out on to the street. There are a few ways to do this:

1. Apply for a permit during a Government Issuance: At regular and established intervals, a regulator will offer up permits. Companies and individuals can apply for the permits and the regulator will have criteria that they use to decide who is most fit to receive another permit.

2. Buy a permit during a Government Auction of Permits: Regulators may sell permits during an auction. There is almost always a value to these permits so the local government can earn revenue from these auctions.

3. Buy a permit from a private permit-holder: These permits may be owned by individual drivers, companies, businessmen, companies, etc... meaning you can buy the permit from them.

4. Attract a permit-holder to your company: Often an individual driver with a permit can choose which fleet to which they want to affiliate. With favorable terms, this permit-holder will come to your fleet, increasing your fleet size.

5. Acquire a company: This is sort of like buying a permit, but you are also buying their book of business, their drivers, cars, dispatching systems, etc..

Why is it good to increase the fleet size? With a larger fleet, you can service a larger area with more corporate clients and make more customers happy. Economies of scale always help your business become more efficient and more profitable (for a discussion of economies of scale see a future post...). And typically, it is very difficult to cover all your fixed costs as a very small transportation company (under 40 cabs).