Uber and other upstart ride-share companies have been gobbling up an increasingly large slice of the taxi market in Sacramento over the past two years by offering rides at the touch of a smartphone app.
Now a century-old name in the taxi game is battling back.
Yellow Cab Co. of Sacramento, the city’s largest and oldest cab company, this month rolled out its own smartphone service called Curb. People who load the app on their smartphone can summon a cab with a few quick taps. Representatives of the company, sporting old-school yellow cabbie hats, have been out promoting the app at farmers markets, bars, nightclubs and around the Capitol.
“We’re just trying to let people know Yellow Cab is still very prevalent in the city, and let people know they have an option,” said company representative Isabel Matick.
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Yellow Cab’s effort to compete with Uber, Lyft and other ride-share services comes at a pivotal moment in downtown Sacramento. The new Golden 1 Center arena now under construction – along with other planned entertainment venues – is expected to draw millions of people annually. Many of them won’t want to deal with the hassle of driving and parking.
The city this week also announced an initiative to build 10,000 new housing units in the central city in the next 10 years for residents who may also choose to get around without a car. Taxis and ride-share companies are expected to play a bigger role in that emerging new downtown, city officials say, along with mass transit, car-sharing programs and bike-share.
Downtown City Council representative Steve Hansen said he’s pleased but not surprised to hear that Yellow Cab, under new ownership, is stepping up its game technologically.
Sacramento’s 98-year-old Yellow Cab Co. was purchased last year by Metro Cars, a Michigan-based transportation company that has been aggressively expanding its profile in Sacramento. The company still offers traditional phone dispatch service, but two weeks ago launched use of the Curb app. Curb, a national brand formerly called Taxi Magic, is used by cab companies in 60 cities.
“It’s a smart move by Yellow Cab,” Hansen said. “The (taxi) industry has fallen behind. Its ability to serve customers was so poor that the industry’s reputation has suffered. We hoped they would modernize. There is a lot of room for growth.”
Saying it wants to professionalize taxi service, the city of Sacramento enacted stricter taxi regulations a few years ago, including an exam that tests for English proficiency. The city rules include driver background checks for criminal history and drug and alcohol tests. The city ordinance also requires taxis be newer model cars.
That ordinance applies only to traditional taxi companies, however. Uber, Lyft and other ride-sharing programs, which rely on private citizens using their personal cars as taxis, are not regulated by the city.
Uber officials this week said they welcomed Yellow Cab’s efforts. “Competition is good,” said spokeswoman Laura Zapata.
Zapata said the San Francisco-based ride-sharing company, which has gone from upstart to national industry giant in five years, is ratcheting up its presence in Sacramento as well. Uber recently hired a local general manager, a sign that the company sees Sacramento and the Central Valley as a growth market. It also announced last week it plans to open a Sacramento office.
It is unclear how much ride-sharing companies such as Uber and Lyft have cut into traditional taxi businesses in Sacramento. Sacramento city officials say they have no way of keeping count. Yellow Cab officials in Sacramento say they estimate the ride-sharing companies may have siphoned off 20 to 30 percent of former taxi business.
But the app-based companies aren’t just wooing existing taxi customers. They are credited with being catalysts in creating a growth market, especially among people in their 20s and 30s, who like summoning drivers at the touch of their smartphone.
Victor Caballero, director of operations for Yellow Cab of Sacramento, said his company his eager to tap into that youthful market. “Technologies are moving at 100 miles per hour,” he said. “We need to be there, too.”
He said his company’s marketing will emphasize Yellow Cab’s history of service, and the fact that his company is tightly regulated by the city. Taxi drivers have been vetted for safety by the city regulatory process, he said, but drivers for ride-sharing companies like Uber have not.
Ride-sharing companies like Uber and Lyft are categorized by the state as Transportation Network Companies, and fall under the jurisdiction of the California Public Utilities Commission. Those TNC companies have generally resisted regulation. Recent state law, however, requires the ride-sharing companies to provide drivers with vehicle insurance. Assemblyman Jim Cooper, D-Elk Grove, has introduced a bill that would require TNCs to participate in the Department of Motor Vehicles driver check process that traditional taxis already use.
The arrival of ride-sharing companies in the local market appears to have created a sea change in the industry. Some independent taxi drivers in Sacramento lament that they are being squeezed out, overwhelmed by the ride-share companies as well as larger traditional cab companies, notably Yellow Cab and the Sacramento Independent Taxi Owners Association, an organized group of taxi drivers that has an exclusive contract with the county to pick passengers up at Sacramento International Airport.
The dozens of independent cab drivers who line up daily downtown at hotels in hopes of catching a fare say those customers are increasingly being scooped up by ride-share cars, Yellow Cab and SITOA.
Kazman Zaidi, an independent driver, said it’s causing independents to drop out of the business, unable to capture enough fares to pay for city fees and deal with city regulations, notably the test the city now imposes, that includes testing English language skills.
“We are really, really suffering,” Zaidi said. “The city is not giving us any help. The city, they want to kick us out.”
City officials counter that they are not trying to push any cab drivers out, but are committed to requiring taxi drivers meet standards for professional service.