Phone Apps to Challenge Taxis for Commuter Dollars

Taxi businesses say not afraid of 'unreliable' ride-share networks

By Kristina Skorbach
Epoch Times Staff
Created: July 18, 2012 Last Updated: July 30, 2012
Related articles: Canada » National
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Lyft, a San Francisco-based rideshare application, provides users with local travel options. Lyft will soon be available in Canada. (Courtesy of Zimride)

Lyft, a San Francisco-based rideshare application, provides users with local travel options. Lyft will soon be available in Canada. (Courtesy of Zimride)

TORONTO—There is a future on the horizon where GPS-enabled smartphones will sync with a social network that connects drivers with empty seats to passengers who want to go in the same direction.

It’s a revolution that has some predicting a death blow to the taxi industry, where many new Canadians carve out an unpredictable income working long hours driving other people’s cabs.

With dozens of rideshare apps in operation and many more entering the market, the revolution is now underway. Smartphone applications like SideCar, Lyft, and Amovens are building a culture of social media users who can use their phones to catch a cheap ride across the city to anywhere at any time.

An attractive selling point is that payments for rides through the applications are donation-based. Riders can see price suggestions for similar rides and can choose to pay directly from their phones. Typically saving the riders 30 percent off regular taxi fare could make the applications a threat to taxi businesses.

The CEO of Coventry Connections, a corporation that operates 17 taxi fleets across Ontario and employs over 2,000 drivers, says he wouldn’t be worried about rideshare applications entering the market if it wasn’t for their lack of regulation.

There are worries, and the worries are from a safety point of view.

— Hanif Patni, Coventry Connections

“There are worries, and the worries are from a safety point of view,” says Hanif Patni.

Although he agrees that we need to accept the changing trends in technology, he says the GPS-enabled technology has been used by the taxi company since 1995, which makes these applications an imitation of an already existing service that is closely regulated.

“Are we creating an alternative system with an alternative regulative body?” Patni asks.

Patni compares an open ridesharing application to Internet dating, “The problem is you really don’t know who you’re dealing with,” he says. “There are vulnerabilities involved.”

While ridesharing, which is already popular for longer distance travel, is unregulated and undependable, taxis are safe, efficient, and reliable, he notes.

One way the ride-share applications try to tackle the issues of safety is by providing information, including photos of the driver and the car. Some applications, like Lyft, do background checks and in-person interviews before the driver can sign up. There is also a ranking system that the drivers and riders participate in.

Mohan Kang, president of the B.C. Taxi Association, agrees that the taxi industry is a more reliable resource for transportation needs within the city.

“The taxi industry has accountability, their drivers are professional, their drivers are accountable … their company is liable,” he says.

He says the donation-based compensation principle creates a “grey area” where the money transfer can be viewed as illegal activity.

“When they say donations, it’s another way of saying they would be charging.” It is illegal for an unlicensed vehicle to charge for transportation in Canada.

“They’re creating a new competitor, but it’s an unfair competition,” Kang says.
There are approximately 4,000 -- 5,000 taxi drivers registered with the B.C. Taxi association, according to Kang.

Apps ‘Revolutionizing Local Transportation’

Although most of the rideshare apps are just now appearing in the U.S. and some parts of Europe, there is no denying that these apps will be welcomed by Canadians soon. San Francisco-based Amovens made a deal with a company in Montreal in May to bring their service north of the border.

Lyft’s co-founder and COO John Zimmer wrote in an email that the company’s application is “revolutionizing local transportation with a community oriented, high quality and affordable transportation option.”

It allows people to reduce their costs of car ownership while providing a valuable service to their community.

— Lyft COO John Zimmer

“Lyft is like your ‘friend with a car’ on demand… It’s magic,” he wrote.

Zimmer launched Zimride in 2007 and in May 2012 he created Lyft, a local version of the long distance Zimride application. Within weeks of its introduction, thousands of users signed up for the Lyft app.

Zimmer had to consult a legal expert to confirm the company is not violating the law by running a donation-based ridesharing service.

“We believe that any form of ridesharing reduces road congestion and carbon emissions and brings people closer together. It allows people to reduce their costs of car ownership while providing a valuable service to their community,” Zimmer wrote.

With congestion reaching endemic proportions in cities like Vancouver and Toronto, empty seats in commuters’ cars represent a massive untapped resource. Putting more people in fewer cars is seen by many ride-share advocates as a way to deal with inadequate road space and transit systems.

Zimmer said Lyft works in conjunction with taxi services and provides people with “another great affordable, fun, and community oriented option” for travellers.

Another popular rideshare application is Amovens with some 50,000 users in the U.S., Spain, and Sweden.

Jef Cozza, Amovens director for the U.S., said anyone with a Facebook account can sign up for Amovens and the process takes a couple of minutes. Although some may be uncomfortable with the idea of getting in a car with a complete stranger, the company provides ways to communicate with the driver or rider before the trip.

“We literally never have a problem with people,” Cozza said.
One way users can find out more about other users is by looking at their rank or comments, which is what keeps everyone on their best behaviour, he said.

The applications are a means of helping someone cover the costs of traveling, explained Cozza, not necessarily to provide a source of income which makes the idea of carpooling with locals seem like supporting a good cause.

The driver can, for example, ask for half the amount of gas for the trip, or ask the rider to drive for part of the way during a long ride.

Cozza said that for an app like Amovens and others in on the same market to be on par with a taxi service is really a matter of response time. “It certainly has the potential,” he said.

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  • Alan Clayton

    In some ‘modern’ countries it is still perfectly possible for people with criminal records to obtain taxi licenses. So taxis are less safe, in real time, than a rideshare app like Avego for example. The rideshare app knows where you are (unlike being at the mercy of a taxi driver); and you can filter out ‘low rated’ drivers or riders in advance, just like dodgy Ebay traders. And women can opt to just travel with women.


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