Coming soon: Tidal wave of cabs, cars for hire in Las Vegas
In a matter of weeks, a tidal wave of cars for hire will be moving people from place to place on the city’s streets.
There will be taxicabs, 3,000 strong, hovering around the resorts, the airport and the convention centers. Ride-hailing companies Uber and Lyft are expected to join the party by early November. Who knows how many of them there will be? Uber applied for an unlimited number of licenses in its initial request to the Nevada Transportation Authority. That means a minimum 7,000 cars in the state, a fraction of which will be operating in Northern Nevada. Some say there aren’t 7,000 people out there who would drive for Uber. Others say 7,000 is just the tip of the iceberg and that 10,000, 15,000 or 20,000 is a more accurate estimate.
Ask Uber representatives how many drivers they expect to have in Southern Nevada, and they will say “thousands.” The company knows how many applicants and potential drivers it has; it just chooses not to disclose it.
Then, there’s Lyft, Uber’s rival, which also wants a piece of the pie. Lyft has filed an application with the state to license 2,500 cars in its first two years of operation.
In all probability, a high percentage of the transportation network company drivers on the streets will be part-timers — college students and shift workers who figure they can make a couple bucks by driving a few hours a day.
But some of them will be hard-core, 12-hour-a-day grinders, some of them former taxi drivers who believe they will be better off as their own bosses, setting their own hours. It’s a risk to cast away health insurance, retirement plans and paid vacation, but some of the good drivers should be able to make a better living for themselves despite devaluing their personal cars, maintaining them themselves, buying additional car insurance and paying their own taxes.
Coming tsunami
For those drivers who stick with their cab companies, there is genuine concern about what the tsunami of for-hire drivers and their cars means for them.
“I don’t know how they’re going to be able to fill the cabs,” Western Cab driver Phil Rodman said. “At first, it’s really going to suck for me and for the cab companies. They’re going to be shocked at how many drivers they lose. They’ve totally underestimated Uber.”
Actually, several cab companies saw problems on the horizon last year when Uber attempted to elbow its way into the market illegally. Company workers worked with the Transportation Authority to set up stings to catch Uber drivers.
Once Uber officials determined they would lose in court, they backed off and launched a multimillion-dollar lobbying campaign instead to get transportation network companies legalized in the state. It was even too strong for the well-established taxi and limousine industry lobby, which had two former governors, Robert List and Richard Bryan, leading the charge to block entrance.
The wave was strong, and legislation was approved. Lawmakers saw an opportunity to please their constituencies by approving a new transportation system that already had swept much of the rest of the country. When the affirmative votes came in on Assembly Bills 175 and 176, which established the framework for transportation network companies, the taxi industry had no choice but play defense.
When it became apparent that Uber and Lyft were coming, the taxi industry responded with a plan in July to make more cabs available to compete with the overwhelming number or ride-hailing cars they’re anticipating.
Opening up competition
Jason Awad, owner of Lucky Cab, offered a proposal to the Nevada Taxicab Authority to remove all time and geographic restrictions on medallions and allow taxis to operate around the clock.
To operate, cabs are required to have a “medallion,” a metal tag that is like a small license plate. Most medallions can be used 24/7, but to balance the competitive landscape, some medallions were time-restricted — they could only operate on certain days of the week — or geographically restricted — they could only operate in certain locations.
The taxi industry already had been mandated by the Legislature to lift geographic restrictions by the beginning of 2016, but the Awad proposal was to take all restrictions off immediately.
The Taxicab Authority approved the proposal unanimously, so 1,224 cabs were added to the mix. On top of that, the Authority board approved an additional 20 unrestricted medallions per company, 10 immediately and 10 on Nov. 1. That’s an additional 320 cabs.
For the cab companies, it was a pretty good deal and gave them some breathing room against the flood of competition. For the drivers, not so much.
The Taxicab Authority equates more cabs with better service.
“We lifted the restrictions to allow for the taxi industry to better service the riding public and to enable the drivers to service where the need is,” said Ileana Drobkin, chairwoman of the Taxicab Authority.
‘Tough for cabdrivers’
But instead, the drivers are expecting a disaster.
“It’s going to make it really tough for cabdrivers,” said Michael Friedman, a cabby for five years and a driver with the Frias Cos. since May.
“There are going to be long lines of waiting cabs everywhere. That may be good for the customer, but for the drivers, it’s a big problem.”
It’s a problem because with more cabs on the streets, plus Uber and Lyft, a finite number of potential rides is going to be split more ways.
“I don’t know how much Uber and Lyft are going to take out of it,” added Joseph Gottlieb, a three-year Desert Cab driver in Las Vegas who drove taxis in New Jersey for 15 years before relocating.
“It’s already flooded as it is, and we haven’t even seen Uber and Lyft yet. We kind of figured the cab companies were going to figure out some way to get their cut. They’ll get their money one way or another.”
Some cabdrivers have taken the path of planting doubts in the minds of the public by saying ride-hailing companies, the contracted drivers and their vehicles don’t get the same regulatory scrutiny as cabs. A national safety campaign sponsored by the Taxicab, Limousine and Paratransit Association called “Who’s Driving You?” routinely calls attention to any negative incident involving a ride-hailing driver.
Gottlieb, Friedman and Rodman predict that when Uber and Lyft get underway, a high percentage of cabdrivers will defect. Local cab companies already have turnover rates as high as 80 percent.
“The cab industry as we know it is a dead man walking,” Rodman said. “They just don’t know it yet.”
Possible silver lining?
The one silver lining he sees is that when things get really dire for the cab companies, he thinks management may be more accommodating to drivers, possibly offering better pay, a cut of fuel surcharge revenue the companies charge or advertising revenue off the signs the cabs haul.
“I’m hoping they’ll treat us more like partners when they see what’s happening,” he said.
To some extent, that is what the Awad proposal was designed to do. With more cabs available, he said, there would be better flexibility in scheduling. Instead of requiring drivers to take 12-hour shifts, some could work less and work better hours.
Rodman said he has heard some drivers are thinking about signing up for both Uber and Lyft and work for them simultaneously. If drivers have both apps running, they would just turn off the other app when they get a hail.
Representatives for Uber and Lyft say they have no policies prohibiting anyone from working for both companies simultaneously.
One cabby who asked not to be identified said the sea change in the local cab industry may result in him quitting his job.
“I love driving a cab,” he said. “And I’m pretty good at it. But the way things are going, I may have to quit.
“Our market share will never be the same, and I will never be able to make much money. I think the cab industry didn’t see this coming and really, really screwed up.”
Contact reporter Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Find @RickVelotta on Twitter.
