Angry taxi drivers vented their frustration on a London office of e-hailing app Hailo, part of a wave of discontent surrounding apps such as Uber.
In response to planned changes in the service offered by Hailo, disgruntled taxi drivers headed to the app’s dispatch office near Waterloo in South London, with police attending the scene and graffiti sprayed on the building reading “Judas” and “Scabs.”
Hailo, a start-up co-founded by three London cabbies, enables you to order a taxicab — that’s a car driven by an individually-licensed driver — from their smartphone. But members of the service were up in arms when it was revealed that Hailo has applied for a Private Hire operator’s licence in London, which will add minicabs and executive cars — drivers that don’t hold individual licenses — to the service.
Taxi vs private hire
The difference between a taxi and a private hire vehicle isn’t clear in the minds of many passengers, but you’ll probably know them when you see them. Whether it’s a yellow cab in New York or a black Hackney carriage in London, a taxi is driven by a driver who holds a special license. In London, to qualify for that license you must complete the fabled training known as “The Knowledge“.
Because of the limitations in licensing, the FT describes licensed taxis in many cities as “cartels”, closed off to new entrants and resistant to change. But with individual drivers having invested substantial amounts in their taxi — the FT points to Paris and Florence where licenses and permits cost upwards of €200,000 — it’s no wonder their feelings run high.
Meanwhile a minicab, town car, executive car, limo or other vehicle is a private hire vehicle, which you book through a central booking office rather than hailing. Certainly in the UK, minicabs are traditionally seen as cheaper than taxis, but there is less regulation on private hire vehicles.
In London there are 25,000 black taxis and 65,000 minicabs. Hailo boasts 14,000 black cabs on its books.
By allowing you to find a nearby black cab on a map on your phone, Hailo allows taxi drivers to enjoy the same advantage that private hire companies enjoy: finding potential passengers without having to rely on the chance of driving past at the right time. This level playing field is threatened by Hailo’s plans to also offer private hire vehicles, but the folks at Hailo believe it’s a necessary step.
“A taxi-only app will get isolated and customers will take their money to services without any cabs on offer. It is already happening,” warns Hailo co-founder Ron Zeghibe in an open letter to London taxi drivers. “Passengers want a choice and if we don’t give them what they want, they will take their money to car apps that don’t offer taxis at all. We need to compete and make sure passengers can choose a taxi when they want one.”
“There is no point burying our heads in the sand,” says Zeghibe. “People want a choice and taxis need to be in the mix.”
‘Stabbed in the back’
Hailo already allows passengers in selected US cities to order limousines and private hire cars as well as yellow taxis. But the black cab drivers of London who have joined and promoted Hailo — sporting stickers and even painting their cabs in bright yellow Hailo livery — feel betrayed. “Hailo was built on the respectability and professionalism of the licensed taxi trade,” says Grant Davis of the 1,600-strong trade organisation the London Cab Drivers’ Club. “It feels like they’ve stabbed us in the back. We just feel really let down.”
Davis is keen to point out that the problem isn’t new technology. “People say black cab drivers are like the mafia or we’re dinosaurs who can’t move with the times… but with Hailo we embraced technology. I loved Hailo, because all of a sudden as I came into work I was getting jobs in Peckham, Forest Hill, places that used to just be the domain of the local minicab office. That’s the old (taxis) and the new (apps) coming together for London.”
“Hailo was great for drivers,” Davis told me. “It opened up London for us.”
Davis believes that the industry has been shaken up by the arrival of Uber. “Hailo has given black cabs a job, it’s promoted the cab trade. But when TFL allowed Uber to come in with their model, it looks like Hailo lost a lot of work to Uber and so investors are saying that if Uber is getting away with it that’s the way we’ve got to go.”
The disruption of Uber
Uber is possibly the best-known and most controversial e-hailing app. Although local authorities in various cities initially opposed Uber’s private hire service, it has now been widely accepted: for example, after initially clamping down on the service when it launched as start-up in San Francisco five years ago, California authorities changed their minds and created a new category of transport companies for services like Uber, Lyft and Rideshare.
In New York, Uber is now licensed by the taxi authority — andformer NY taxi commissioner Ashwini Chabra just joined Uber as Head of Policy Development and Community Engagement, focusing on “turning complex policy questions into smart answers.”
It hasn’t been a smooth ride everywhere for Uber: the service has come under fire for its controversial ‘surge pricing’ model of jacking up prices at different times, while the city of Brussels in Belgium recently banned Uber drivers from picking up private passengers.
But Uber is now live in 36 countries around the world and is valued at more than $3 billion.
Davis is now recommending GetTaxi to his members as an alternative to Hailo. GetTaxi, founded in 2010, is now live in 24 cities around the world and has tempted a large number of drivers away from Hailo in the past day or two by vowing to stick to just taxis. “We only partner with licensed black taxi drivers,” says UK CEO, Remo Gerber. “We hugely value the commitment they show to their passengers, through the safety checks and qualifications they undertake to become a world-famous black taxi driver.”
“At GetTaxi we have no plans to use Private Hire vehicles — full stop.”
“We believe black cab drivers are the best in the world,” GetTaxi’s chief marketing officer Rich Pleeth told me today. “They have The Knowledge — jump in a black cab and the driver will know where you need to go and they’ll know what roads are closed, so they’ll go the best way to get you where you need to be. Meanwhile a minicab will rely on a sat-nav.”
“We respect Hailo and its founders,” Pleeth insists. “Hailo says it wants to offer business a better proposition, and they believe they need private hire to do that. We don’t. If businesspeople want an executive car we upgrade them to a (Mercedes-Benz) Vito, which has a privacy screen, it can drive in bus lanes, and it’s driven by someone who has done The Knowledge.”
“We want to get businesspeople where they’re going on time. If they were relying on a minicab they’d have missed their multimillion pound deal.”
Although GetTaxi wouldn’t confirm the knock-on effect of Hailo’s plans, CNET understands that around 600 drivers have jumped ship since the announcement.
Following demonstrations against Uber by taxi drivers in France, the UK’s Licensed Taxi Drivers’ Association is planning a demonstration on 11 June. London cabbies recently demonstrated their ability to bring parts of the city to a standstill with a protest against taxi arrangements near the Shard skyscraper, blockading streets around London Bridge during the middle of the day.
Grant Davis is keen to stress that he is not against e-hailing apps themselves: the LCDC’s ire is directed against travel authority Transport for London. “The cab trade hasn’t got a problem with Uber; we’ve got a problem with TFL for licensing Uber,” he says. “We’ve had taxis in London for 300 years and minicabs since the ’60s, and they’re covered by laws in place to protect Londoners. But the way Uber works, they call it ‘disruptive licensing’: they turn up in a new area and says ‘Bang, this is how we’re doing it.’ And TFL has just bowed down to them.”
“For the first time ever, taxis and the private hire trade have both gone to TFL to say that there are laws in place and all we ask is that whoever comes into the market adheres to the law. TFL has let both sides down.”
Davis believes the Uber effect could have dire consequences. “If they decimate the cab trade and minicab trade in London and just have one tier of ‘taxi’ — which is actually just a car — and that’s the Uber tier, then what the public will get is price surges. When it’s raining, the cab you used to get home from the club will have doubled in price, but you have to pay what you have to pay because no-one’s left standing. Uber’s cleared the decks.”
But Hailo’s Ron Zeghibe argues that cabbies must embrace changes in the world of taxis. “The worst thing the taxi industry could do now is deny that things are changing and hold onto the past. Complaining is not a strategy.”