Sacramento Hyatt signs deal with Yellow Cab, ousts independent taxis

Sacramento’s taxi wars heated up again this month, as Hyatt Regency Hotel officials signed an exclusive deal with Yellow Cab that excludes the independent cab drivers who have serviced the hotel.

Under the new deal, hotel employees will summon only Yellow Cab company drivers when a hotel guest asks for a taxi. Hotel general manager Scott VandenBerg said the deal with Yellow Cab, the city’s largest and oldest taxi company, will improve what has been uneven and at times inadequate service.

“We were finding inconsistencies, broken door handles, trunks with dirty rags in them, ripped car seats,” VandenBerg said. “Some didn’t take credit cards. Some refused to take short trips, which we just can’t have.”

The deal strengthens Yellow Cab at a notable moment for Sacramento taxis. Yellow Cab, now owned by Metro Cars of Michigan, has been aggressively positioning itself to compete with ride-sharing giants Uber and Lyft for a slice of the downtown Sacramento market.

The new Golden 1 Center arena, opening later this year, followed by a hotel and other entertainment venues, is projected to draw millions of people annually downtown. Many of them are expected to want to avoid the hassle of driving and parking.

The city also is pushing to build 10,000 downtown housing units in the next 10 years for residents who may also choose to get around without a car. Taxis, ride-share companies, transit and bike-share programs are expected to play a bigger role in that emerging downtown, city officials say.

“Sacramento is upping its game,” Yellow Cab executive Victor Caballero said. “This small town is becoming a big city.” Caballero said his company is not in talks with other downtown hotels, “but I would not turn anyone away.”

Uber and other ride-sharing services already have in the last two years made a big impact on the taxi industry downtown, siphoning anywhere from 30 percent to 50 percent of the traditional taxi service customers, according to various taxi industry representatives.

Uber recently opened a first-of-its-kind “activation center” in Elk Grove, where drivers can go to get vetted and signed up as Uber drivers. Uber’s Sacramento area general manager Jay Gierak said the company sees downtown and midtown Sacramento as the core area for its regional services.

“We see tremendous (business) growth in Sacramento,” Gierak said. “It is driven by activity in the downtown and midtown area.”

The ride-sharing companies also pick up customers frequently at the Hyatt and other hotels – summoned by customers via smartphone app – although the companies do not have a formal relationship with the hotels.

Uber has an agreement with the Kings that allows patrons of Sleep Train Arena to summon an Uber ride using the Kings’ team smartphone app. Uber’s Gierak said he hopes to continue that relationship when the Kings move downtown.

Sacramento International Airport last year signed deals with Uber and Lyft allowing their drivers to pick up rides at the airport. Uber and Lyft drivers still must wait off airport grounds to be summoned by a client. The airport only allows SITOA, a coalition of taxi owners, to wait for rides on site.

The losers in the Hyatt deal and airport arrangement are the dwindling number of independent cab owners who previously lined up outside the hotel waiting for customers. Kazman Zaidi, a spokesman for the independent taxis, complained that the city is squeezing the small operators out. If other hotels follow Hyatt in signing exclusive deals with Yellow Cab, independent taxis will disappear from the scene, he said.

“Yellow Cab is eating the small fish,” Zaidi said. “Within a couple months, you will not see any private cabs.”

City officials have said they are not trying to push small operators out of business. However, responding to complaints from hotel operators and customers about poor and sometimes rude service, city officials two years ago established a new set of taxi regulations to upgrade the local taxi industry.

The rules require drivers to take exams that focus on English language skills, proficiency in counting change and knowledge of Sacramento geography. Drivers are required to dress professionally, accept credit cards and drive vehicles that are less than 8 years old.

Ride-share companies like Uber are not regulated by the city or county, but are overseen by the state Public Utilities Commission.

Tony Bizjak: 916-321-1059, @TonyBizjak