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Business Brief: Without 'Sharing Economy' Regulation, Taxis Transform

Yellow Cab Boulder's new zTrip car
Yellow Cab Boulder

Jacksonville taxi services are rebranding themselves and stepping up their tech game to compete with app-based Uber and Lyft.

The makeover is part of a backlash against what’s called the “sharing economy.”

It looks like a classic case of if you can’t beat ‘em, join ‘em. Jacksonville’s Yellow Cab and Gator Cab, both owned by parent company Transdev, are rebranding to zTrip, what they’re billing as a hybrid of the app-based ride companies, like Uber and Lyft, and a traditional cab company.

Transdev will be spending $2.8 million in Jacksonville to make that happen, and they have announced identical initiatives in other cities such as Tampa, Orlando, Boulder, Austin, Kansas City and Pittsburg.

The company says its new business model combines the best of both worlds – the convenience of app-based ride hailing and more rider safety, with drivers who are fingerprinted and background checked, as well as 24-hour service that you can schedule ahead of time, and standard fares at all times, offering protection against the price surges that can result in skyrocketing fares for Uber passengers.

Bill George, CEO of zTrip, says the safety factor should help customers choose his company.

“We spend a lot of time telling our kids, ‘You never get in a car with a stranger,’ and now there’s a system out there that they encourage it,” he said.

Danger is a common theme taxi companies have used to push for more regulation of their app-based foes.

In Jacksonville, a City Council committee studying those regulations met for months, and essentially decided to punt to the state Legislature. Conventional wisdom is cities in Florida want the Legislature to set statewide regulations.

There’s a growing chorus calling for Uber and Lyft to be regulated more than they are, to provide background checks, vehicle safety checks, and more insurance protection, to make more of a level playing field with the cab business.

Of course, Uber and Lyft maintain their main advantage: cheaper rides for the most part and an overall favorable rider experience. In some cities, the Uber has taken away half of cabs’ business, but in Jacksonville, George says Gator and Yellow Cab lost less than a quarter of their business since the advent of the app-based services.

He says zTrip’s business model will win passengers back.

“We think with that the formula that we’ve put together, not only can we regain the business back that we lost initially but actually take advantage of this growing pool of market share,” George said.

Transdev is an international company with a tremendous amount of experience in the transportation business, and it’s clearly spending money to find a way forward.

In the larger picture, what is very clear is more regulation is coming, for Uber and Lyft and others in the sharing economy. Think Airbnb, which has been subject to complaints from people in neighborhoods who say their neighbors running unregulated hotel businesses and breaking zoning laws.