Connect with us

Uber, lyft and other taxis

With nearly half of Chicago cabs in foreclosure or idled, cabbies’ hopes riding on New York-style ride-share limits

Published

on

green cab

Struggling to survive in the age of Uber and Lyft, the Chicago taxi industry’s hopes may be riding on a legislative long shot.

Nearly half of the city’s 6,999 licensed cabs are in foreclosure or idled, leading to an increasingly desperate call for regulatory intervention — including a newly floated idea to cap the number of ride-sharing licenses in Chicago — to keep taxi fleets on the streets.

“Things are getting worse every day,” said Adrian Tudor, owner of Taxi Town on Chicago’s far North Side, whose fleet of 370 green cabs sits nearly one-third idle on most days. “It’s very difficult. I’m surprised we’re still alive.”

New York City approved a measure last month that places a one-year moratorium on new ride-share licenses. Support is growing among Chicago cabbies for a similar move here, which Tudor said would help the taxi industry compete, particularly on weekends, when part-time ride-share drivers flood the city looking for fares. Ald. Anthony Beale, 9th, and Ald. Edward Burke, 14th, have said they are considering such a proposal.

City officials, however, have no plans to cap ride-sharing services at this time, said Rosa Escareno, commissioner of the Department of Business Affairs and Consumer Protection, which regulates both the taxi and ride-share industries.

“It’s the consumers that are making the choice and the consumers that are driving the type of service that they need and demand,” Escareno said. “We have to listen to that. It was the consumers that drove the change that is here today.”

Tudor and other taxi owners are being overwhelmed by changing consumer habits and the nearly 66,000 active ride-share drivers in Chicago, a number that has grown fourfold in the last three years, according to the city.

While the number of taxi medallions in Chicago is capped, there are no limits on ride-share drivers. Uber and Lyft say that flexibility is necessary to meet growing demand. The taxi industry, which once had a monopoly on offering rides to strangers for pay, is looking for the city to limit the number of citizen cabbies.

“We are heartened by the developments in New York,” said Meg Lewis, a spokeswoman for Cab Drivers United, a union that represents Chicago taxi drivers. “There’s no one who benefits from tens of thousands of vehicles on the street competing in a race for the bottom.”

What is not in dispute is that Chicago’s taxi industry is running on fumes, with medallion foreclosures, declining revenues and a shortage of drivers making once-ubiquitous cabs relatively scarce.

Medallion transfer prices have plummeted in Chicago, dropping from more than $300,000 five years ago to as low as $30,000 in July, according to city data. Banks that financed taxi medallion purchases are aggressively foreclosing on a growing number of owners, who find themselves underwater and unable to make payments on the loans.

“It’s a pretty bleak picture right now for some folks who’ve invested their life savings in medallions,” Lewis said.

City data show that, as of late last month, 1,289 medallions were in foreclosure, and another 1,362 were in violation, a status which may also lead to foreclosure.

Lenders engaged in Chicago medallion foreclosures include Lomto Federal Credit Union, Medallion Financial, Bethpage Federal Credit Union and Capital One Taxi Medallion Finance.

Furqan Mohammed, an Elmwood Park attorney who has represented about 60 Chicago-area cabbies in medallion foreclosure lawsuits and renegotiations over the last 15 months, said Lomto and Medallion have been among the most aggressive in pursuing lawsuits.

“The medallion owners are in foreclosure because it’s simply not sustainable to pay off these huge loans with the income they generate,” Mohammed said.

Lomto, for example has filed 164 medallion foreclosure notices since 2016 in Cook County Circuit Court, according to court records.

Frank Andreou, an attorney representing Lomto, said the lender prefers to renegotiate rather than foreclose on the loans.

“Any lender will renegotiate,” Andreou said.

Medallion, a publicly traded New York bank that was built on taxi medallion loans, has filed 35 lawsuits since June 20 in Cook County against delinquent Chicago cab owners. The bank had 107 Chicago taxi medallion loans with an outstanding balance of $20.2 million at the end of 2017, according to Medallion Financial’s second quarter earnings report, filed with the Securities and Exchange Commission.

In addition, Medallion owns 159 Chicago medallions purchased out of foreclosure in 2003, which appreciated to about $370,000 in 2013, and are now valued at about $36,000 each, according to the report.

Andrew Murstein, president of Medallion Financial, said in an email the surge in Chicago taxi medallion litigation reflects a “more aggressive approach on collections with the portfolio.”

Bethpage and Capital One did not respond to requests for comments.

One high-profile Chicago taxi owner facing plummeting valuations is Michael Cohen, President Donald Trump’s former personal lawyer, who paid $5.7 million to accumulate 22 medallions between 2009 and 2014, according to the city’s Department of Business Affairs and Consumer Protection.

While only nine of his Chicago medallions remain active, according to city data, Cohen’s entire taxi portfolio may be at risk after he pleaded guilty Aug. 21 to eight federal counts of tax evasion, campaign finance violations and bank fraud.

“Based on Michael Cohen’s guilty plea, we are reviewing the case in order to begin a revocation of the 22 Chicago medallions,” Escareno said.

Tudor, a 30-year Chicago taxi veteran who started driving an Evanston cab while in college, launched Taxi Town two years ago, in part to cut costs from more expensive affiliations with other companies.

Since then, the business has been in sharp decline, and he is actively renegotiating medallion loans with several lenders as he is forced to lower lease rates.

Cabs that he leased to drivers for $120 a day two years ago go for about $50 these days, Tudor said. And that’s still too high to lure enough drivers to keep his full fleet on the streets.

Most days, more than 100 of his distinctive green cabs are sitting in his West Rogers Park lot.

“There’s no drivers,” Tudor said. “Some of the drivers quit the business; some went to Uber.”

Uber has more than 30,000 active drivers who live and work in Chicago, while Lyft has “tens of thousands” of drivers plying the streets of the city, a ride-share fleet that dwarfs the number of licensed taxis.

Unlike taxi drivers, most of Chicago’s ride-share drivers chauffeur strangers as a side gig, working less than 20 hours a week, flooding the streets on weekends and evenings, the companies said.

“The majority of our rides — 63 percent — happen in off-peak hours,” Lyft spokeswoman Campbell Matthews said.

Ride-share drivers also tend to work outside of the Loop, the companies said, filling a transportation void in areas traditionally underserved by taxis, such as the South and West sides.

Uber and Lyft fought the ride-share caps in New York — the first enacted by a major American city — and are hoping Chicago won’t follow suit.

“It’s artificial, and it’s unnecessary,” Matthews said. “Wait times would really increase for people who need these rides, who’ve come to rely on them. Prices would increase and (drivers) wouldn’t be able to sign up to earn.”

Chicago passed a number of changes this year aimed at boosting the taxi industry, including extending the life of cabs by three years and reducing fees. Uber spokeswoman Molly Spaeth said the company supported those “thoughtful reforms” but would oppose any move by Chicago to cap ride-share licenses.

“An arbitrary cap on ride-share would restrict access to transportation options and earning opportunities for residents — particularly on the South and West sides — turning back the clock to the old system where only some parts of Chicago were served,” Spaeth said.

Tudor, on the other hand, would like nothing better than to turn back the clock for the taxi industry in Chicago, where cabs that once jammed Michigan Avenue are now few and far between and ride-shares rule the road.

Without some help from the city, he said, flagging a cab may soon be a lost art.

Source: http://www.chicagotribune.com/business/ct-biz-chicago-taxis-ride-share-limits-20180823-story.html

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Uber, lyft and other taxis

Lyft Is Another Step Closer to Driverless Ridesharing

Published

on

By

uber lyft

Ridesharing company Lyft (NASDAQ: LYFT) inched a little bit closer toward self-driving ridesharing last week when it said in a blog post that it’s adding Chrysler Pacifica hybrids to its autonomous vehicle (AV) testing fleet and opening a new self-driving vehicle test facility.

The new facility, located in East Palo Alto, California, will allow the company to increase the number of AV tests it can run. It will also let the company test how the systems do with different road configurations, including intersections, merging lanes, traffic lights, and similar challenges. The company said in the post that the new facility will let Lyft “further accelerate the speed of innovation.”

Lyft says that it’s driving four times more autonomous miles per quarter than it was just six months ago and has about 400 employees worldwide working on self-driving tech. That figure is likely to expand, considering that Lyft has more than 40 autonomous vehicle job openings listed on its website.

In addition to the new facility, Lyft said that it’s adding Pacifica minivans to its AV fleet, which is the same vehicle that Waymo, Alphabet’s self-driving car company, uses for its public self-driving ridesharing project and AV tests. Lyft said that, “The minivan’s size and functionality provide our team with significant flexibility to experiment with the self-driving rideshare experience.”

Why does all this matter for Lyft’s autonomous-vehicle future? Because to have a successful, public self-driving ridesharing fleet in the coming years, Lyft needs to lay the groundwork right now.

Isn’t Lyft already doing AV testing?

Lyft is, of course, already working on AV testing. The company’s original self-driving test facility has been up and running since early 2018. The company also started a partnership with Waymo earlier this year to test autonomous ridesharing. Additionally, Lyft also works with Aptiv, an AV tech company, and together they’ve created “the largest publicly available commercial self-driving program in the country” and have completed more than 75,000 rides through the partnership.

But the recent announcements by Lyft show that the company is taking its AV focus a bit further. The Pacifica minivans have been used by Waymo’s AV ridesharing program in Phoenix for more than a year now, making them a proven choice for shuttling around ride-hailing passengers. Lyft may not be ready to launch a wide-scale autonomous ridesharing service just yet, but testing out these vehicles likely means that it’s moving past earlier stages of AV testing and is now looking at how its next-generation self-driving tech can handle new vehicles.

Why this matters for Lyft

Lyft and other ride-hailing companies, including Uber, are keeping a close eye on self-driving developments and testing out the technologies themselves because it could eventually become an integral part of their business model. Research from Intel predicts that the AV ridesharing market could be worth $3.7 trillion by 2050.

Additionally, as regulations surrounding ridesharing drivers continue to increase, Lyft is likely looking to AVs to eventually replace some human drivers. Just a few months ago, the state of California introduced a bill that could pave the way for independent contractors, including Lyft’s drivers, to be reclassified as employees. If a version of the bill becomes law and other states follow California’s lead, it could significantly increase operating costs for Lyft. That could be bad news for the company, which is unprofitable right now and hoping to be in the black just two years from now.

While Lyft’s announcements may not seem all that significant right now, investors should know that these baby steps moving the company closer to AV ridesharing could have huge results in the coming years. For now, investors should be pleased that Lyft is beefing up its own AV testing. Each move the company makes now means that it’ll be much more ready for a self-driving ridesharing future.

Source www.nasdaq.com

By Chris Neiger

Continue Reading

Uber, lyft and other taxis

Uber fined $650 million by New Jersey over driver classification

Published

on

By

money

New Jersey is the latest state to say Uber’s drivers should be classified as employees rather than independent contractors. The state’s Department of Labor and Workforce Development said that because of this misclassification, the ride-hailing company owes it roughly $650 million in unemployment taxes and disability insurance, according to Bloomberg Law.

The Department of Labor reportedly has been trying to get unpaid employment taxes from Uber going back as far as 2015, according to documents obtained by Bloomberg Law. It said the company owed the state $523 million in overdue taxes along with another $119 million in interest and penalties for the last four years. Uber disputes these findings.

“We are challenging this preliminary but incorrect determination,” an Uber spokesman said in an email. “Because drivers are independent contractors in New Jersey and elsewhere.”

Driver classification is an issue that government regulators have been taking a closer look at over the past year. California passed a law in September that could require Uber and other on-demand companies to reclassify their drivers as employees instead of independent contractors. The law is set to go into effect Jan. 1. New York, Oregon and Washington state have considered similar legislation.

Uber, Lyft and several other tech companies have vowed to fight the California law, collectively putting more than $90 million behind a ballot initiative that’ll take the issue to voters next November. Many drivers have said this move is a slap in the face as they struggle to earn a living wage.

Uber’s and Lyft’s business models depend on bringing aboard hundreds of thousands of independent contractors, whose labor is typically cheaper than that of employees. That’s because Uber and Lyft drivers supply and maintain their own cars and also pay for their own health care and benefits, such as sick days or overtime pay.New Jersey is the latest state to say Uber’s drivers should be classified as employees rather than independent contractors. The state’s Department of Labor and Workforce Development said that because of this misclassification, the ride-hailing company owes it roughly $650 million in unemployment taxes and disability insurance, according to Bloomberg Law.

The Department of Labor reportedly has been trying to get unpaid employment taxes from Uber going back as far as 2015, according to documents obtained by Bloomberg Law. It said the company owed the state $523 million in overdue taxes along with another $119 million in interest and penalties for the last four years. Uber disputes these findings.

“We are challenging this preliminary but incorrect determination,” an Uber spokesman said in an email. “Because drivers are independent contractors in New Jersey and elsewhere.”

Driver classification is an issue that government regulators have been taking a closer look at over the past year. California passed a law in September that could require Uber and other on-demand companies to reclassify their drivers as employees instead of independent contractors. The law is set to go into effect Jan. 1. New York, Oregon and Washington state have considered similar legislation.

Uber, Lyft and several other tech companies have vowed to fight the California law, collectively putting more than $90 million behind a ballot initiative that’ll take the issue to voters next November. Many drivers have said this move is a slap in the face as they struggle to earn a living wage.

Uber’s and Lyft’s business models depend on bringing aboard hundreds of thousands of independent contractors, whose labor is typically cheaper than that of employees. That’s because Uber and Lyft drivers supply and maintain their own cars and also pay for their own health care and benefits, such as sick days or overtime pay.

 

“New Jersey is sending a message that the state’s labor laws aren’t dictated by corporations,” Bhairavi Desai, executive director of the New York Taxi Workers Alliance, said in a statement. “It’s a stinging rebuke of the architects of the gig economy, and we hope it permeates across other sectors.”

Even if Uber’s drivers were determined to be employees rather than independent contractors, Uber said the $650 million New Jersey tax fine would be too high — particularly if it’s based on what the company has earned in the state. Uber didn’t disclose the revenue it generated in New Jersey over the past four years, but its combined revenue for all the markets where it operated in 2018 was $11.3 billion.

 

 

 

Source www.cnet.com

By Dara Kerr

Continue Reading

Uber, lyft and other taxis

Adams Clinical removes hurdle to clinical trial participation

Published

on

By

uber

How Adams Clinical increased retention and streamlined operations by switching to Uber.

One of the hardest parts of conducting a clinical trial is identifying willing participants. Once a participant is identified, strict qualifications and an often-lengthy time commitment limits who can participate, and a lack of access to transportation can make it difficult for participants to commit to and complete the study. To help improve recruitment and retention rates, Adams Clinical offered taxi rides to their participants. However, this solution became a burden on operational efficiency since taxis were only accessible to participants who lived close by and required the staff to pay at the end of each ride.

Finding the perfect transportation solution with Uber Health

To expand their transportation offering, Adams Clinical became an early beta partner with Uber in 2016. The team started using Uber’s web dashboard to arrange and pay for rides for participants with just a few clicks. Over the three years of this partnership, the switch to Uber Health simplified operational management, while reducing time spent on recruitment with increased retention rates. The easy-to-use Uber Health dashboard tracked all the rides and processed payments from one centralized interface, allowing the staff to arrange rides without the hassle of paying at the end of each trip. This flexibility, plus the extensive reach of Uber driver-partners in the Boston area, provided Adams Clinical with the transportation solution needed to successfully manage their participants in need of rides—which removed the headache from recruiting and retaining their study participants.

The result: Improved retention rates, simplified financial records, and an overall lift in team morale

By teaming with Uber Health, Adams Clinical enjoys a number of key benefits including:

• Expanded Recruitment—Using Uber Health cut down the length of enrollment by providing a larger pool to recruit from, resulting in a 5 to 10 percent reduction in recruitment time over the last two years. 

• Centralized Billing—All rides are charged to one company credit card, which is then processed at the end of each month to streamline the amount of administrative effort required.

• Reliable Service—Each ride is tracked in the dashboard so the team knows when the participant will be arriving to help keep the rest of the study on schedule.

• Improved Retention—In the first two years of the partnership with Uber, Adams Clinical estimated up to 20 percent fewer people dropped out of a trial when transportation was arranged to and from the clinic.

• Financial Accountability—Details for each ride are available in the dashboard, and can be downloaded to a spreadsheet, offering convenient management with trial-specific reporting per participant.

• Easy to Use—Using Uber Health has been easy for both staff and participants, even among populations without smartphones or passengers new to Uber.

 

by Kendall Brown

Source uber.com

Continue Reading

Trending

TransportationVoice