Nov. 6 2015 01:12 PM

Arrival of Uber means fewer cabs, cab drivers

LANSING — Uber may be a household name, but the entrepreneurial ridesharing company reached Michigan only two years ago, tacking Detroit and Ann Arbor onto its momentum for global popularity.

Since then, the service has expanded to Grand Rapids, Lansing, Flint and Kalamazoo.

Meanwhile, many taxi companies, including ones in Michigan, have struggled to keep up with the technology and new business model Uber offers.

And they face setbacks.

In Grand Rapids, for example, the number of taxi drivers with active licenses is down 22 percent since last year, according to the city clerk’s office.

According to Ann Arbor city records, only 28 taxicab plates are in use, down from 107 taxis registered last year, and 139 in 2013 when Uber started serving the city.

That’s an 80 percent, two-year decrease in registered taxicabs for Ann Arbor.

“We never lost a driver to Uber but we have lost the capability of hiring new drivers because of Uber,” said Valentino Hernandez, owner of iCab in Lansing.

There is no data that suggests one way or another how Uber has directly affected taxi companies, says Randy Hannan, chair of the Greater Lansing Taxi Authority.

“But in terms of head-to-head competition between Uber and taxis, I would be shocked if there wasn’t some impact on the taxi industry because Uber has been relatively successful here,” Hannan said.

The state allows Uber Technologies Inc. and its leading rival, Lyft, to operate without a limit on the number of vehicles and drivers, or insurance requirements that traditional taxi companies must adhere to.

Lyft operates in five cities, all Southeast Michigan: Ann Arbor, Detroit, Farmington Hills, Troy and Warren.

Both companies use their own mobile apps, allowing customers to order and pay for rides with a smartphone. A request is routed to nearby Uber and Lyft drivers, who work as independent contractors and use their own vehicles.

Leor Reef, a communications associate for Uber based in Chicago, declined to comment on how many Uber drivers operate in Michigan, or plans for expanding into other communities in the state.

Taxi companies and state legislators are pushing back for a more level playing field, Hannan said.

“The Michigan Legislature has been grappling with regulation of what they call transportation network companies. They’ve been going back and forth about how much control to give to local units of government and what the state’s role should be.

“But they haven’t had any success in changing the statewide outlook in regulating the industry,” he said.

One local government teamed up with Uber by giving jurors Uber credits up to $20 each way for rides to the Macomb County Circuit Court Building and back for the first day they are on jury duty, according to the county clerk’s office. The pilot project started in late June and is still continuing.

The jurors are not the only ones benefiting – Uber drivers in Macomb County still get paid for driving the jurors, and the program frees up parking near the courthouse in Mt. Clemens.

“The right to a jury of your peers is fundamental to our democracy, and Uber is helping Macomb County put innovation into the justice system to safeguard this right,” Carmella Sabaugh, the county clerk, said in a statement.

Local taxicab companies were asked if they were willing to donate their services, but none offered free rides, said Todd Schmitz, the chief deputy county clerk. So the clerk’s office approached Uber instead.

Hannan said that some taxi fleets are incorporating their own back-end technology to keep up with Uber and Lyft’s consumer demand.

For example, iCab uses GPS to dispatch its closest cab drivers to a waiting customer, ensuring quicker response times rather than assigning the driver who’s waited the longest for a customer.

iCab’s Hernandez said, “Uber has directly affected the taxi industry in Lansing. From 2012 to 2014 we had a large growth, but when Uber was introduced into the area we’ve had quite a decline in the amount of service that we provide.”

AMELIA HAVANEC

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