Taxicab owners, drivers cry foul over unregulated upstart Uber-X

India Smith, Special to the Reporter
May. 30, 2014

For a solid hour last Thursday, the horns blared. In a planned protest of the unregulated operation of Uber-X and Uber-XL, the outfit that people call on a smartphone to summon a car or an SUV and a driver when they need a ride, 200 licensed cabs driven by members of the Boston Taxi Drivers Association (BTDA) circled the block in front of Uber’s office in downtown Boston. As the stream of cabs flowed down the narrow street near South Station, taxi drivers holding placards spoke to reporters and passersby about their concerns and demands.

“We want them off the streets,” said cabbie Cineus Jackson of Dorchester. “Uber out!” Members of the BTDA, an affiliate of the United Steelworkers Union, want the mayor and the police commissioner to order Uber-X (a car) and Uber-XL (an SUV) to suspend operations until their drivers can be licensed and their vehicles inspected.

According to longtime union driver Tibor Hangval, drivers for Uber-X do not need a taxi license, which means that their safety record is not scrutinized by the Hackney Bureau of the Boston Police Department, which doesn’t inspect the vehicles, either. “It could be anybody picking you up. You are getting in a car with a complete unknown,” said Hangval while holding a placard indicating that Uber has a poor safety record compared to regulated taxis.

Uber-X fares are also unregulated, but passengers and protesters alike believe they are lower than regular taxi fares. And that is the problem – and the reason why Uber-X has become wildly popular.
According to BTDA staff representative Donna Blythe-Shaw, a Savin Hill resident, conventional taxi business in Boston has dropped 30 percent since the inauguration of Uber-X in 2012, an estimate later confirmed by many drivers and several fleet owners.

Are Uber’s fares really lower?

“We don’t know,” said Blythe-Shaw. “Their fares aren’t posted the way regulated taxi fares are.”

But Uber riders can get a fare quote on the website. Once they place an order, they see a picture of the driver and the vehicle on their smartphone.

How did taxi fares in Boston get so high that Uber-X can make such a dent in the regulated taxi business so quickly? According to Blythe Shaw, it all goes back to the price of the medallion necessary to legally operate a cab in Boston.

Over the last five years, speculation in medallions has pushed the price to almost $700,000 each. The amount the owner needs to meet payments on the medallion determines the so-called lease, or shift fee, charged to drivers.

“And then the meter rate has to be high enough so that the drivers can cover the lease,” Blythe-Shaw said. Adds driver Tony Andre, “Uber-X drivers don’t have to pay a lease.”

Cabbies are clearly in a squeeze. They pay a lease fee of $100 or more to the medallion owner plus pay for gas, insurance, tolls, and a for a fee for radio dispatch. The driver then keeps the fares and tips, but it’s hard to clear a profit. Most drivers work 12 hours a day, six days a week. As ridership drops, it becomes impossible to make a living.

In 2012 drivers sued the fleet owners and the Hackney Bureau over the Uber-X situation and its effect on the taxi business. With old-fashioned radio dispatch services giving out fewer calls, drivers’ net earnings were dropping below minimum wage. “That’s a direct failure of the Hackney Bureau to regulate the industry,” Blythe-Shaw said. She and her membership believe a civilian commission, not the police, should be in charge.

Although Mayor Martin J. Walsh did not cause this problem, he is in a position to fix it, she said.

In a statement after the protest, Mayor Walsh stopped short of suspending Uber, but said the safety of the public must be protected. He has called for a task force, including drivers, to review the entire industry, including Uber-X and similar services such as Lyft.

“We’re not saying they shouldn’t be here. We’re saying they should be regulated,” Blythe-Shaw said. “And if you’re talking about competition, we’re saying it should be fair competition.”