D.C. Taxis Must ‘Innovate or Die’

As the city regulates rideshare services, taxis try to compete with uberX, Lyft and Sidecar.

Uberx is a low-cost option on the Uber app. It is one of many rideshare services that are directly competing with D.C. taxis. (Rob Stewart/GW Today)
November 05, 2014

By Brittney Dunkins

A 12-1 D.C. Council vote last Tuesday to regulate rideshare services in the city brings competition to a head between taxi drivers and a new generation of vehicles for hire.

Mobile app-based car services uberX, Sidecar and Lyft have grown in popularity because they allow riders to request a vehicle from their smartphones and rate their experience. However, rideshare models have allowed nearly anyone with a car to become a driver without the licensing process required by the D.C. Taxicab Commission. The lack of government regulation has caused concern over their safety.

The Vehicle-for-hire Innovation Amendment Act of 2014 addresses public concerns by requiring a background check and insurance for drivers. Additionally, the bill mandates inspection of cars within 90 days of beginning service and a zero-tolerance policy for drug and alcohol use and discrimination, among other measures.

In response to the changing industry, the D.C. Taxicab Commission has scheduled a hearing on Thursday for the proposed “One City, One Taxi” app that would allow riders to request a taxi from their smartphones. If passed, the bill would require all taxis in D.C. to use the app.

The George Washington University School of Business Professor of Marketing Donna Hoffman is the co-director of the Center for the Connected Consumer. She said that the new legislation is forcing taxis to become more appealing to tech saavy customers.

George Washington Today reporter Brittney Dunkins spoke to Dr. Hoffman about the rising popularity of rideshare services and their future in D.C.

Q: Who are typical rideshare users? Why do they choose rideshare?
A: Typical rideshare users are largely urban men and women with smartphones who need to get around quickly and efficiently in something other than their cars or using public transportation. Rideshare users also have the means to pay via credit or debit card. This cuts a wide swath. I haven’t seen any detailed statistics on users, but based on my observation, I think these kinds of folks choose rideshare because they don’t want to worry about getting from point A to point B, they just want to get there. Rideshare takes most of the friction out of the travel equation.

Q: How important is the “convenience factor” of app-based rideshare services in attracting customers?
A: The convenience factor absolutely cannot be underestimated. There are a number of reasons that app-based rideshare services are so popular, but a big one is that they make the process of grabbing a ride pretty seamless. You open the app, request a car, and the car shows up. Then you tell the driver where you want to go, and she takes you. And you can follow the journey on the app. Billing is done automatically in the background.

Rideshare services eliminate a lot of the stress of the process—whether you can find a ride when you need one, the anxiety of over-tipping or money changing hands or whether the taxi will take your credit card or is trying to cheat you by taking the long way.

The new app-based rideshare services have done a great job of filling demand for a clean, safe ride with no hassle.

Q: What do you predict about the future of rideshare use in D.C.? Taxi use?
A: These services put control back into the hands of users. That control starts when you open the app and call the driver. As you wait for your ride to arrive, you can see the rating of your driver, the make and model of the car and the license plate number.  Once the driver arrives, you can verify the driver and get in the car. Then you can use the app to navigate and after you arrive at your destination, you simply exit the car. Then you can view the cost and rate your driver on the app. It’s elegant in its simplicity.

In the Internet age, people are used to being in control of information.Taxis will have to innovate or die. Competition is a good thing, and it’s here because of app-based ridesharing services.