Disruption: Ride-Sharing Upstarts Challenge Taxi Industry by Nick Bilton (July 21st,2013)

Last week, when I arrived at the Los Angeles airport on a flight from San Francisco, I made my way to the taxi stand and waited 10 minutes for a cab. Just as I was about to hop in, the driver and the dispatcher began fighting over whose job it was to put my suitcase in the trunk. After a few minutes, I dealt with the bag myself. We then drove off in a filthy taxi that smelled like cigarette smoke and had suspension so old that it felt as if it had square wheels.

This made me think once again: the taxi industry is ripe for disruption.

Several companies in Silicon Valley — like Uber, Lyft and Sidecar — are acting on that very thought.

Uber, like the other services, does not have its own fleet of cars. The company teams with existing luxury car services and acts as a digital dispatcher for people booking a car through its mobile app.

Although Uber determines price the same way taxis do, calculating fares by time and distance, the service can cost 50 percent more than a normal city cab. Another service offered by Uber, called UberX, offers passengers a lower-cost ride in hybrid cars and is comparably priced to traditional taxis.

But companies like Uber are continually confronting the obstacle of entrenched government bureaucracy, resistant unions of taxi drivers and dispatchers, and overlapping and sometimes conflicting systems of state and city regulation.

The latest roadblocks have come up in Los Angeles, where Uber began offering its service in March.

Travis Kalanick, the company’s co-founder and chief executive, said it received a cease-and-desist letter from the city of Los Angeles, “even though this is not under their jurisdiction.” He added, “The taxi industry feels it is getting disrupted and they are doing whatever they can with their lobbying relationships to try and stop us.”

The letter, issued by the Los Angeles Transportation Department, says that Uber is “operating an unlicensed commercial transportation service” in the city. Jonathan Hui, an agency spokesman, wrote in an e-mail that it was working with the mayor’s office “to determine ways to address ride-sharing companies,” but he declined to comment further.

William Rouse, general manager of Yellow Cab in Los Angeles, one of the largest taxi companies in the city, and president of the Taxicab, Limousine and Paratransit Association, a trade group, said that making sure taxis were officially licensed was a matter of public safety.  Read the rest at… http://bits.blogs.nytimes.com/2013/07/21/disruptions-upstarts-challenge-the-taxi-industry/?_r=0

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