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Better taxi service

Making taxi companies subordinate to both drivers and customers


Many cities have long regulated the taxi cab industry in order to limit the number empty taxis on the streets and ensure customers for drivers. However, the process used has been poor, resulting in lower pay for drivers and poorer service to users.

Taxi companies in Portland and elsewhere have historically been allowed to have an arbitrary number vehicles each. In addition, they have been able to treat drivers as independent contractors and charge them the cost of running the company. This means that their revenue and size (and direct competition size) is fixed, ans as a result have had no incentive to do better.

Poorly run taxi operations have also discouraged customers and kept use down. Companies can get away with poor customer service (such as when taking calls), and high fixed fees charged to drivers along with few benefits mean better employees go elsewhere. In addition, poor service from both the company and drivers results in fewer customers, which further limits driver revenue and the pool of potential employees.

See Preliminary Findings, Taxi Driver Labor Market Study: Long Hours, Low Wages from the City of Portland's Office of Management and Finance


Separate the dispatch function from the individual taxi companies, and create one that's centralized and independent, handing out rides regardless of company. Recognize that taxis are seen as a commodity as fares are regulated, and treat drivers as the independent contractors that they are.

The dispatch could be overseen by a board of half or all drivers, the people who depend on it for income. Any remaining positions would be appointed by City Council to represent customers and the public. Taxi companies would continue to provide vehicles and services to drivers, and would compete for their business.

This would allow customers to get the best (based on location, seniority, customer service history) cab regardless of company using one app or phone number. The percent of time drivers spend running empty would be reduced, benefiting both their income and the environment. For instance, a person in a neighborhood could be assigned to a driver who just happened to be dropping off someone from downtown, even though they might think to call a different company. Those who prefer a specific company would still be able to request them.

A centralized dispatch would also provide insight on the actual demand and proper number of taxis there should be. Instead of arbitrarily limiting fleet size, it could be ensured that rides are first given to established drivers, and steady income streams could attract better ones. Bad drivers could be rooted out (and given less rides) by asking customers to rate their ride on a good/acceptable/bad scale upon trip completion.

While Uber and Lyft have implemented some of these strategies, they exist to suck money out of local economy.

At least a portion of surge pricing goes to the company, yet their cost to run the app should be roughly the same regardless of usage. Increasing price and pay may be a valid solution to handle increased demand, but having them set the price is a conflict of interest. In addition, it can be argued that some (say, low-paid night service workers) deserve it less than others (those going out on the town).

They have also had little care for regulations. For instance, they've argued that drivers are only covered by the company's insurance and other polices while having a passenger actually in the vehicle. Taxis, on the other hand, are regulated the entire time the vehicle is out on the road.

Furthermore, their rating system can unfairly punish drivers, as they may be removed for getting a 4.5-star rating while many customers may be fine with that quality of service.

By Jason McHuff,