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).

Carpool is a Public Transportation Option that makes Carpool Car-cool!

An important part of this blog is the discussion of public transportation issues and public transportation options. Today I want to focus on carpooling as a form of public transportation. The goal of public transportation is to get people around in an economical, efficient, and safe way. Carpooling keeps vehicles off the road by filling the empty seats of cars that are on the road (as of 2006, there were 251 million registered passenger vehicles in the USA for a population of 291 million).

Check out the chart comparing US population to number of vehicles and number of drivers. Certainly, less cars on the road means more economical, efficient, safe transportation.



Vehicle and Population Ratios (from wikipedia)


Zimride is a revolutionary carshare service that creates carpool groups within companies and institutions. It is also a very cool start-up located in Silicon Valley and rumored to actually be profitable.

Here is what Zimride does: Zimride is a customizable website where drivers can list openings in their cars for any length trip (to work, to a concert, to a vacation, across the county, back to school, etc..). Riders can also create a listing of rides that they need. Hopefully (and usually), the driver and rider can connect. Another option is the interface that Zimride has with Zipcar (Carshare), where a couple riders who cannot find a driver can rent a car together splitting the hourly rate.

Why is this awesome? Let's say you are the University of Maryland or Wal-mart. Instead of building ANOTHER student or employee parking lot, additional roads, and running more shuttles, you get a customizable website that your people will actually use that will reduce transportation costs for your students/employees, reduce your institutional transportation costs, and contribute to a societal good (there must be some financial/marketing/tax incentive for that somewhere).

It is also awesome because the idea of carpooling is as old as transportation itself, and it exists in some form everywhere in the world. In fact, in some developing nations the only form of transportation is hitching a ride with someone else (carpool). Good for Zimride for making Carpool car-cool!

A peak at the Zimride website at http://www.zimride.com/

See Zimride at http://www.zimride.com/

Gas-efficient Vehicles Part 1

Sun Cab is both green in color and green in spirit! That is, we strive to be as environmentally-friendly as possible by adding gasoline-electric hybrid vehicles that get a drastically higher mile per gallon (MPH) ratio. The Toyota Prius Hybrid, Toyota Camry Hybrid and Ford Escape SUV Hybrid are examples of such vehicles.

Of our 44 associated fleet cabs, we have: 11 Toyota Prius Hybrids (48 MPG), 2 Ford Escape SUV Hybrids (34 MPG), 1 Toyota Camry Hybrid (34 MPG city). Compare that to the typical cab which is a Ford Crown Victoria (18 MPG), Mercury Grand Marquis (18 MPG). With the amount of miles a cab travels in a typical day (approximately 150-200), the benefits of an improved MPG ratio are many.

For ease, let's compare the Crown Vic and the Prius. This will be a little numbers-heavy, but let's say gas is $3 a gallon. In a cabby's day, a Crown Vic costs $30 worth of gas to operate. Driving the same amount of miles, the Prius costs $12. That savings over a 6-day week is $180 minus $72 equals $108. That over a year is 108 times 52 equals $5616. Over the life of a car of 7 years, that is $39312. This more than makes up for vehicle purchase price, increased maintenance spending, depreciation values.

Initial investment to buy a Prius ($14000 used) instead of a Crown Vic ($6000 used) is difficult for a small fleet or independent cab driver. In that case, there are favorable lease terms available. That, and more and more jurisdictions are mandating hybrid vehicles. Regulation and common sense math used above should convince a fleet or independent driver that gas mileage alone will make up for any increased cost.

What are other advantages of a hybrid vehicle? A better-looking cab that drives better and carries a positive message will mean more customers, meaning more fares, more tips, and more incomes to drivers and fleets. Fleets will be in better favor with regulators and will receive more permits to increase their fleet size. Morale of drivers and customers improve. Hybrids do get an edge over their competition.

I strongly believe in a future of all-hybrid fleets: through common sense math; a pulse of the needs of our customers; and, effective, smart regulation. Cab fleets are also the perfect place to implement even more forward-thinking environmentally-friendly and innovative solutions like electric cars and cars powered by other alternative fuels: propane, natural gas, bio-diesel, e-85 (more on the availability, opportunities, and grants available for such technology in a future column...).

"Hiring" and Training Drivers

This column is about the process we go through to get drivers into cabs in MOCO. We don't say "hire" because these ladies and gentlemen behind the wheels are independent contractors (and we don't want to make it sound like they are employees which they are not).

First a driver has to get a Montgomery County Facecard or taxi driver's license (I got mine about a year ago so I know the process). That involves a criminal background check and fingerprints, driving record review, application, and quiz. It costs about $75 to get the license, depending on how many times you have to take the test (Drivers, please go to 51 Monroe St, 5th Floor Taxi Office or call 240-777-5800 for more information). The county taxi office has a standard for who can drive a cab.

At Sun Cab, like at many companies (but not enough of them!), we raise the bar even higher. We do our own more stringent driving record review. We have them fill out an application and complete another driver test on our company policies, procedures, and guidelines. We send them for a drug test (and do so regularly) and we give them a "first-day orientation." In our three year history, we have always had a long waitlist of drivers.

Another important element of our new driver process is our customer service and safety training classes. Each driver attends this class that is held monthly (at some of our larger companies, these classes are held 2-3 times per week because driver turnover is high). What happens during these classes? Taught by charismatic current and past drivers, we have a time-tested curriculum based on experience on the road and subject research. It includes important traffic and safety rules and guidelines, with relatable stories. The classes involve a powerpoint, handouts, and engaging discussion.

We strongly believe that our superior customer service and solid safety record is owed to our driver training, driver support, and driver "hiring."

Credit Card Processing

A major nuisance of most cabs is that try as you might, a driver will not take your credit card. The driver will take you a mile out of your way (and not charge you for the extra mile) just to bring you to an ATM and take your cash. Drivers always seem to size you up and reject you when you suggest such a thing as using a credit card. It seems like the drivers always have the ability to take your credit card but for one reason or another, their credit card processing equipment "just broke." Believe it or not, it is a loaded issue!

Reasons drivers will not take credit cards (that I have come up with):
1. Unable to determine if the credit card is good: If a driver accepts a bad credit card as a form of payment, they won't get paid for the trip. It is costly for fleets to install the equipment that automatically authorizes credit cards. Even if they install it, the driver may not get a good signal. It is a pain to call a dispatch operator to get an authorization number over the phone.
2. Drivers have a cash-only mentality: Often, the cab driver is a person who prefers cash in their hand. Perhaps it is because the do not trust banks, or credit cards, or they need the cash immediately. It is simply the culture.
3. Drivers have to pay credit card fees: Usually fleets charge drivers a flat rate or percentage of each credit card trip. It can be as high as 15% of the fare. Drivers don't want to pay their company or their bank if they don't have to.
4. It creates a record: Yes, an all cash business makes it easier for income to go unreported. Enough said.

Certainly, the drivers that survive in the business and the people on the business end want to enable customers to pay with credit cards. We want to please customers, create a record, and we know that cashless payment is the way of the future. Here is what we do to encourage that drivers take credit cards:
1. Reduce credit card fees: We need to cover our costs too, and we are willing to share that cost with drivers.
2. Improve and/or install credit card processing equipment: The equipment is costly (sometimes as high as $10,000 per cab), the radio frequencies are costly, the maintenance is costly, but slowly companies and regulators are understanding that credit card processing and its reliability is the way of the future. Often, it requires regulation standardizing credit card processing for the technology to be implemented.
3. Educate drivers through training: Training and education can show drivers that they will get more trips and higher tips if they take credit cards thereby decreasing idle time, dead-heading, and making up for any costs and fees.
4. Create incentives/discipline: Reward drivers that accept a lot of credit card trips, discipline those who do not
5. Communicate to customers/drivers: Something as simple as putting a "Credit Cards Accepted" sticker on a cab can go a long way. Also, marketing, websites, ads can communicate this message.

Here's an article that talks about how much NYC cabbies like their CC processing equipment: http://www.yellowcabnyc.com/nyc-taxi/yorks-cabbies-credit-cards

Some info about the implementation of CC equipment in NYC cabs: http://www.nyc.gov/html/tlc/html/passenger/taxicab_serv_enh.shtml

A couple companies that have some cool cab technology that enables CC authorizations:
Taxipass: http://www.taxipass.com/travelers.htm
Ridecharge: http://www.ridecharge.com/
Verifone: http://www.verifone.com/industry-solutions/taxi.aspx
DDS what we use: http://www.digital-dispatch.com/ (more on our technology in a future column...)

The Sales Blitz

Sun Cab has a sister-company in Baltimore. Today I had the pleasure of participating in the seasonal Sales Blitz in which the staff members visit big customers to deliver treats, seek feedback, update information, and generally show a positive presence.

Being a premier transportation provider in the city, our big customers include hotels, hospitals, businesses, and schools. An institution or entity is considered a customer if they themselves pay for the transportation trips or if they provide an area as a cab stand for their own employees or guests. We often provide an on-site "starter" that helps these employees or guests find and enter the cab.

Front-line personnel at these hotels, hospitals, businesses, and schools form a city-wide network of smiling faces -- security officers, doormen, bellhops, drivers. They feel the pulse and tone of the city at any one time. It is our priority to both please the front-line personnel (making their jobs easier) and their back-office managers. It is in turn our responsibility to feel and understand this same citywide pulse. It is our own front line people (drivers), driver managers, office and administrative staff that maintain this connection and high quality service.

It is very important to have these "corporate account" customers. It enables us to get feedback on our service. It gives our drivers a steady stream of work. And it gives us a means to control our drivers (meaning, the driver takes the customer from a hotel and we bill the hotel for the trip. The driver is forced to come to the taxi office to receive any payment. That's right, sometimes drivers do go rogue, for a variety of reasons, and don't show up at the taxi office to check-in).

Accessible Vans and the Cab Fleets

In Montgomery County, every taxicab fleet is obligated by the County Taxi Code (see later column...) to have a certain percentage of wheelchair accessible vans. Sun Cab has three such vans -- retro-fitted Dodge Caravans or similar models. Needless to say, the wheelchair accesible van rule is a "public good" so we at Sun Cab happily support the program (and we're happy to pick you up anytime)!

The down-sides: Caravans are more expensive than Crown Vics, Grand Marquis, or Toyota Prius and the retro-fitting is expensive too. Gas mileage is worse, driver training is time consuming and expensive, and insurance is more expensive. Also, trips cost the same as a normal cab. It is the cost of being a taxicab fleet operator because it is much more expensive to run. There is also healthy debate as to whether there are enough wheelchair trips in our county that such a County Taxi Code requirement for wheelchair accesible vans exist. Please call us anytime with your wheelchair needs because we have expensive equipment and well-trained drivers here to help you!

Check out some Sun Cab wheelchair accesible van pics:

Driver Supervisor Bannerman in a Viewpoint Mobility Wheelchair Accesible Van

Driver Smith at Wheaton Station waiting for a wheelchair pick-up

Shiny Sun Cabs



Check out http://www.viewpointmobility.com/ for more info on our wheelchair retro-fit



The Hybrid Look: Sun Cab has the most fleet-owned Hybrids of any DC-area fleet

Sun Cab donated a hybrid cab to Temple Beth Ami Nursery School on Truck Day 2010. Sun Cab has 15 environmentally-friendly hybrid Toyota Prius and Ford Escape SUVs, the most fleet-owned hybrids of any fleet in the Greater Washington DC Area.

Sun Cab at Beth Ami Nursery School Truck Day 2010

Here are some more sweet pics of our hybrids in action:



Sun Cab Driver Mr. Hizkael poses in front of Sun Cab 5727 



September Driver of the Month Ayelew Debebe poses in front of our Hybrid SUV 5917



A lean, green, and never mean Toyota Prius Hybrid





The Almighty "Medallion" in NYC and MOCO

In Montgomery County we have Passenger Vehicle Licenses (PVL), our equivalent to New York City's taxi medallion. The taxi medallion is a form of pseudo-property that gives its owner the right to pick up passengers. It can also be worth close to one million bucks in New York City. In this column, I will talk about why they can be so pricey, who sells (issues) them, and who buys them...

Why so pricey? Let's start with the basics. The medallion owner has the right to put a taxi on the street and pick up passengers. A medallion owner buys a car and has it retro-fitted to be a taxi. The medallion owner leases out his cab to a driver for a flat rate of $200 per shift. The driver hits the mean streets of NYC and picks up 40 fares in a 12-hour shift, bringing in about $400. The driver gets $200, the medallion owner gets $200. Multiply that by two shifts per day, six days per week, 52 weeks per year, and the medallion owner rakes in $200 x 2 shifts x 6 days x 52 weeks = $124,800. Factor in some expenses, but suddenly a million bucks doesn't look too bad for the rights to the medallion.

Back to home -- certainly a Montgomery County cabbie does not get forty $10 fares in a twelve hour shift. They probably get a couple longer airport trips and 7-8 trips around town, taking in about $200-$300 per day for fares, on both shifts. A Passenger Vehicle License holder in Montgomery County can turn around and charge the cabbie a flat rate of $80-$120 per day depending on the arrangement. But, we also have to account for costs that include the vehicle, its maintenance, the company fixed and variable costs (like a mandatory dispatching center). I will let you do the math, but we certainly could not sell the rights to our medallion for a million bucks.

Who issues the medallions? In New York City, medallion numbers hovered around 11,700 for sixty years but then surged to 13,200 medallions by 2009. The need for new medallions was determined by the city taxi department  in the 1990s through an intense process of politicking, researching, lobbying, etc... At a city auction, initial sales from 400 new medallions netted $100 million in revenue to the city.

In Montgomery County, our Passenger Vehicle Licenses also get issued by the county based on need, researching, politicking, lobbying, etc.. Instead of sold at auction, these PVLs are issued to specific drivers or specific fleets (an additional level of regulation). But the owners or fleets can still buy and sell the PVLs that they have been issued by the county taxi office (with county approval).

Who buys them? Medallions and PVLs may be bought and sold by the local drivers, by local fleets, speculators, investors, etc... There is almost always a demand because regulators keep the number of available medallions or PVLs at an artificial low (regulators consider their available number to be a sweet spot based on sound research), there is always an abundance of passengers in need and drivers seeking work. Interestingly enough, as the overall economy gets worse, there are more laid off workers looking to drive a cab, so the fare rates and shift rates increase thereby driving up the cost of the medallion or PVL (but more on that in a future column).

Here's a couple relevant links:
Montgomery County Taxicab Unit: http://www.montgomerycountymd.gov/tsvtmpl.asp?url=/content/dot/transit/taxi_reg/taxi_user.asp
NYC Taxi and Limosine Commission: http://www.nyc.gov/html/tlc/html/home/home.shtml

Our Prices

Last week, a blog reader made a comment about our confusing taxi rates. Well, they are confusing! But rates are regulated meaning we are unable to change rates, we are obligated to charge the county rates, and we cannot compete based on lowering rates.

Where do taxi rates come from? Typically, to establish rates there is a long drawn-out process that involves: demographic and population research; company, drivers, and customer feedback; costs associated with vehicles, maintenance, and fuel; and, general economic research. Lawyers and lobbyists often get involved -- it's messy. With so many interest groups involved, the rates end up a little messy too.

What's also messy is the whole traffic time/distance confusion, and makes it tough for the company or customer to estimate the cost of your trip. This is where most of the questions that I receive come from. So, you get into a cab and the meter starts at $4. For each quarter-mile, the meter goes up by 50 cents, or $2 a mile. You would assume that a 5 mile trip would cost $4 + ($2 x 5 miles) = $14. But what if you sit in traffic for 30 minutes? Cabs are obligated to charge $28 per hour for traffic/delay time. This is sitting in traffic, or sitting and waiting for you at the Rite Aid. This burns more fuel, takes up a driver's time, depreciates the car, etc, etc.. Now you are up to $28 times 1/2 = $14. $14 plus your initial $14 puts you at $28. Even though you still traveled 5 miles.

Why are taxi rates regulated? The best answer I have come up with is that taxis cannot compete based on price because service levels and customer safety will deteriorate (yes, even more so than now, for all you nay-sayers..). Transportation can be lucrative, so companies or drivers will continue to undercut each other to get all that business. In the process of undercutting, there will be less money available for drivers and companies to keep cars safe, buy new cars, and develop the business. Companies may undercut, establish a monopoly, and jack up rates. Rates would probably fluctuate until they hit a sweet spot where price, safety and customer service all made sense. But the regulators say that they are better able to come up with that price.

Please remember is that it is not the taxi companies that set the rates and all the companies are obligated to charge the same exact rates. Our meters are inspected regularly to make sure all cabs in the jurisdiction charge exactly the accurate distance and time-based rate. I have attached a rate chart below that is reproduced on each of Montgomery County's cab fleet websites and cabs.

Driver Appreciation Day

One way to encourage good behavior and improve overall morale is to host a driver appreciation day. I had the opportunity to attend such a function yesterday at one of our sister-operations. Close to 75% of the drivers attended this lunch under a tent in a local state park. A Virginia State Park with about 150 taxis parked along the road is quite a sight!

Lunch was an ethnic dish served buffet-style that fit the preferences of the majority of the drivers. There was also Popeyes for anyone else. We sat at rows of picnic tables. The company executive made a speech about the important of safety and then each driver that had no tickets or accidents in the year was called up individually and honored before the entire group with a certificate and a photo-op.

The drivers got a real kick out of it and seemed to feel really great about themselves and about being part of the community of drivers. By the way, this same operation has a driver lounge complete with games unique to the culture of the drivers, televisions, and places to pray. It is no wonder with this kind of treatment that this operation has one of the best safety records, happiest drivers, and cleanest, safest cars! It is also not a stretch to say that the bottom line is rewarded handsomely for these efforts...

System on-System off and Geofencing

Today I learned another reason why your taxi may not show up on time, or at all. And here's how to combat it...

Normally, you call dispatch and dispatch sends you a cab. The dispatcher uses their system to offer the trip to a driver and after accepting your trip, the driver starts making his way toward you, the passenger.

However, on the way, maybe the driver sees another passenger on the side of the road surrounded by luggage hailing a cab. The cab driver considers you -- the trip he has already accepted from the dispatcher (which is short...) -- and weighs it against this probably airport trip (which is long). He pulls over and takes the passenger to the airport (remember: longer trip = higher fare = more $$ in driver's pocket). And YOU keep...on...waiting...

So what do companies do? The can "geofence" (only allow drivers to turn on their meter within a certain distance of the original scheduled pick-up. They can "time set" (drivers must have their meter on for above a certain time limit). The can provide incentive, discipline, but it is tough to control completely.

"System on - system off" is an interesting game a driver may play, which is: The dispatcher can tell that the passenger has been picked up because the driver turns their meter on in the "geo-fenced" vicinity (if they company is savvy enough). The dispatch loses track of you, the original trip, if the driver turns their meter on, then off (system on system off) and the original trip disappears because the system recognizes it as "picked up."

In this case, the driver is playing games and hurting the cab company in order to get a better fare and money into his own pocket (at the company's expense). He is hurting the company because every time someone does not get picked up, they stop using a particular company, maybe write a scathing review, maybe complain, maybe tell some friends. Depending on how you look at it, of course, the driver is only choosing to hurt the company because of the situation he is in. That is, he's an independent contractor that is obligated to pay a certain amount every day regardless of his performance or income (many sides to the issue...).

"Uniformed Drivers"

This morning, after a couple casually-dressed drivers came into the office, my office manager asked me: "Why don't we make uniforms mandatory for drivers?" Certainly she was thinking that a uniformed driver is more professional, and is more likely to provide a increased level of service. In general, it would make us seem like a "higher end" type of transportation provider, making our customers happier, thereby generating more business.

Here's the issue: Independent Contractor rules and legal precedent. In almost all taxicab companies nation-wide, the drivers are independent contractors. The drivers pay the companies for use of the company vehicle, the company dispatch, company insurance plan, etc, etc and bring home the difference between total fares and total expenses. (There is a fair amount of push and pull among employee/independent contractor set-ups across industries. Which often seems like a grass-is-greener struggle. More about that in a future column...)

Drivers, then, do not have the protection or obligations of employees. That means, drivers have an increased amount of freedom to do what they want, wear what they want (within reason, without breaking company rules -- company rules that do not go outside independent contractor rules), and importantly, EARN what they want. Drivers can refuse dispatched trips, drivers can wear a tank-top, etc..

Cab companies are able to claim that they have uniformed drivers only when they provide enough incentive, bonus, or well-formulated argument for a driver to wear such a uniform. What do we do? We give the drivers a gift card if we catch them in proper attire. We can also provide free uniforms or have a shoe-shine available. We can also convince them that they will get more "flaggers" and more tips if they look better. Some of they guys are convinced, some just want to more comfortable for 12 hours sitting in a car.

So, would you wear a uniform?

Blog Goals

I have grappled with the notion of blog-writing for years. But here's what I've come up with:

1. People in management roles should probably be more accessible:

It's become increasingly clear to me in the post of general manager of a taxicab company that a certain level of transparency and accessibility is essential for any person in a managerial position. I hope this blog serves as a gateway to my customers and colleagues on decision-making processes.

2. The taxicab business often gets a bad rap, when it is rapidly becoming much more professionalized, technology-oriented, and sustainable!

Those who manage, drive, and own taxicab companies or transportation companies often get a bad rap -- for good reasons and not-so-good reasons. I intend to explore this notion and offer exciting developments in new transportation practices, technology, and regulation.

3. Public Transportation discussion is essential:

Taxicabs, as a part of public transportation, are part of the fabric of city life and suburban and rural landscapes. Negotiating how people can get around is an ongoing dialogue and discipline with fascinating implications. These discussions and debates should be more transparent.

I hope you enjoy my blog! Please make comments.