When he was 50 years old, Larry Bowles was a disgruntled car salesman who didn’t see eye to eye with his boss. After getting into a heated argument with his superior, he quit his job in a fury and whipped out of the parking lot, nearly hitting a taxi cab as he pulled onto the road.
As he drove off, the image Bowles had stuck in his mind wasn’t the close call—it was the phone number printed on the side of the cab. Bowles took the near-miss as a sign, and decided to take the advice of his uncle (a D.C. cab driver) to get into the taxi business. His outgoing personality and familiarity with cars made him a perfect fit for the job, and he’s been doing it ever since.
Bowles has now been a taxi driver for 15 years, putting over 400,000 miles on his 2005 GMC Yukon XL Denali for Yellow Cab of Charlottesville and rising to the position of driver manager.
“I think the taxi cab business is a good business,” Bowles says. “You can really make good money and you just drive. I don’t know where you can make this kind of money and all you got to do is drive.” And yet, Bowles, like other taxi drivers in the city, often hears this question: “So what do you think about Uber and Lyft?”
The growth of ridesharing services in Charlottesville over the last five years has posed an unprecedented threat to the taxi industry. Mobile apps, a flood of new drivers, and a young generation drawn to accessibility has allowed companies like Uber and Lyft to corner a significant chunk of the market and begin to render the traditional taxi cab obsolete.
Uber made its way to Charlottesville in 2014, and Lyft followed two years later, both quickly becoming the top choices of UVA students and visitors to the area. This left many local taxi companies scrambling to stay afloat; they lost both customers and drivers to the ridesharing services and were forced to revisit their business models. But five years after Uber first came to town, local taxi services have shifted their focus and adopted new approaches to the business. It’s a seismic change that’s occurred as a result of the reshuffle in priorities among different players in the transportation industry.
Prior to the ridesharing companies’ debuts, transportation businesses typically focused on one of three areas: taxis, limousines, or paratransit services. Each was profitable and there wasn’t much overlap, allowing all three segments to thrive in their individual markets. But when Uber siphoned off a majority of local taxi drivers’ cash-based trips, their dispatchers were forced to broaden their view.
“The industry is far more diverse than it ever has been,” says John Boit, executive vice president of the Transportation Alliance trade organization (formerly the Taxicab, Limousine & Paratransit Association). “Basically, if it involves moving people around from A to B, these companies are looking at everything. Whereas 30 years ago, taxi companies would’ve just said, ‘Well, we’re just going to run taxis and pick up people who hail us on the street or call us directly for a ride.’”
When Will van der Linde got into the taxi business in 2012, he bought out a company still stuck in the analog era. The Charlottesville native had never worked with taxis before, but alongside partner Mark Brown, he sought to help Yellow Cab catch up to the 21st century. The partners ditched ham radios in favor of a digital GPS-based dispatch system and added credit card machines in all the company’s vehicles. They also launched an app, called Taxi Magic, that they used for about a year.
Van der Linde, who’s a member of the Transportation Alliance, says he saw Yellow Cab experience tremendous growth in his first few years as part-owner. Even after he bought out Brown and his other investors in 2015, the taxi company remained profitable thanks to its contracts with UVA and social services, particularly by providing non-emergency medical transportation. It’s since merged with eight other Virginia taxi companies to form the Old Dominion Transportation Group.
But when Uber and Lyft began to erode his customer base, van der Linde became weary of the restrictions preventing his company from competing with the ridesharing services.
“The thing that we’ve always petitioned for is either deregulate us as a taxi business or regulate them,” van der Linde says.
In order for a taxi dispatch service to operate in Charlottesville, it must first purchase Virginia operating authority registration and license each vehicle as a taxi with the state, which requires specialized license plates. Before you can install those plates, however, each vehicle must be insured through 24/7 commercial liability insurance. This is an expensive policy that requires the company to cover a significant amount of damages regardless of whether or not a customer is in the car. (….)
As taxi services continue to try and adapt to the ever-changing landscape of the transportation industry, their biggest focus is staying ahead of the technology. Uber and Lyft took advantage of a lack of forward-thinking among the thousands of taxicab companies around the world. Now that they’ve shifted their approach in favor of new business models, taxi services are hoping to change the narrative around ridesharing services’ control of the transportation industry. Perhaps when riders get into Uber and Lyft vehicles, they’ll start asking a new question.
“So what do you think about taxis?”
- Will Van der Linde: “The thing that we’ve always petitioned for is either deregulate us as a taxi business or regulate them.”