Across the globe, the taxi or vehicle for hire business was in steep decline by 1989 when Durham, North Carolina where I still live asked me to launch my fifth and last destination marketing start up.
As I was beginning my fourth destination marketing start-up a decade earlier, the dispatch-owner centric model that had reigned for decades (showcased in the sitcom Taxi) was already showing signs of implosion.
I had worked a taxi for a few months during college when this system was in its hey day. Regulators had little to do then but help set fares.
But by the end of the 1980s, the taxi industry was descending into chaos. The cars began to age and in most cities when you could find one, cabs were often pretty grimy and smelly.
Soon cell phone technology meant you had to call each driver individually, which was a nightmare, and the few that would take credit cards griped about it incessantly.
Gradually, what had been a service culture gave way to an entitlement chip-on-their-shoulder culture.
As I’ll explain below, this is only the beginning of a revolution.
With these technologies, drivers and vehicles are pre-qualified and insured, and drivers who are closest to a requested pick-up bid on the fares. Through an app on their smart phones, passengers request a driver, instantly see the reviews of prior riders, and with a click on their smartphone, pay via their debit or credit card including whatever tip they choose.
Some taxis complain because these low overhead, low capital cost alternatives lack traditional inspections but other ways of ensuring this outperform the vast majority of traditional inspectors many of whom have grow unenergetic.
Taxis owners brought this on themselves. Instead of complaining, they need to either band together to adopt similar customer-friendly technologies or seek a tie-in with Lyft and Uber.
Local officials share the blame for being enablers of a dying and dysfunctional model rather than pushing drivers to adopt new practices and technologies faster.
This often happens when local governments forget who their real stakeholders are, such as resident and visitor passengers and the businesses whose patrons the taxies are meant to serve, especially restaurants, grocery stores and hotels.
Instead of pushing for continuing and never-ending improvement of service outcomes, comprehensive and speedy early adoption of new technologies such as credit cards and very strict codes of dress and vehicle maintenance, as well as requiring strict age limits of vehicles (many end run ordinances to use cars that are 15 years old,) officials have kept a dying business culture on life support.
There has always been a bit of whining in the cab culture but none should be tolerated regarding these new alternatives. Any tweaks to incorporate them should be rapidly incorporated by local governments.
Rather than seeing this as a threat, taxi owners and drivers should use this as a wake up call.
It makes sense for passenger for hire vehicles to be regulated but local governments also need to see these new alternatives as a wake up call and shake the cobwebs from enablers.
This includes airports, especially those in polycentric service areas who did away with cabs sorted by destination community because it was inconvenient for them and a way to make money.
There is no longer any excuse for arriving visitors to learn that their ride to their final destination is also the first for the driver. Airports serve as catchment areas of dozens of different communities and it is time to put the “local” back in cab services.
These new technologies make that easy.
For those of us irritated at disruption, this movement toward a sharing economy is not a one-off. It is symbolic of disruptions now revolutionizing the entire economy. In a two or three decades the commercial world as we know it will still exist but only as a remnant.
The revolution in taxis or vehicles for hire is just the beginning. In five to ten years, we will order driverless cars to pick us up wherever we are and take us to our destinations.
While we go about our errands or work appointments or enjoy a visit somewhere, the driverless vehicle will then return to home port for recharging or go on to another assignment.
When we need another, we’ll summon it via smartphone.
In the not too distant future, we may not buy cars except as a hobby. Instead of ownership we will rely on having access at a fraction of the cost including fuel and the miles of roadway used.
It isn’t too late but the new day for taxis is just beginning to dawn foretelling bright, sunshiny days ahead.