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Uber-like app Flywheel will kick half of SF taxi fleet off its platform

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Taxis wait along Fourth Street to load passengers outside the Marriott Marquis Hotel. (Kevin N. Hume/S.F. Examiner)

Flywheel, the Uber-like app used to electronically hail traditional cabs, will kick half of San Francisco’s taxi fleet off its platform on Sunday, the San Francisco Examiner has learned.

The move may see as many as 1,053 taxi medallion holders locked out of using the app, more than half the taxis in The City, according to the San Francisco Municipal Transportation Agency. Flywheel Technologies disputed that number, and said 800 out of 1,500 taxi drivers using the app would be barred from it.

The move reflects a growing schism over which taxi company will lead the future of the industry in The City, as cab companies maneuver to regain ground lost to Uber and Lyft, said John Lazar, former owner of Luxor Cab Co.

“It’s a war starting,” Lazar said.

In a notice sent to taxi drivers this week that was obtained by the Examiner, Flywheel wrote “ATTENTION TO ALL DRIVERS,” and said in order to ensure a “superior experience” for drivers and passengers in San Francisco that Flywheel will be “suspending all orders to drivers” who do not drive for a partner of Flywheel.

Those partner fleets include Flywheel Taxi, SF Super Cab, Lucky Cab, Max Cab, Fog City and Eco Taxi. Fleets whose drivers will no longer be able to seek passengers on the Flywheel app include Yellow Cab Co-Op, Citywide Taxi, Luxor Cab Co., National/Veterans, and 11 other cab companies.

Flywheel Technologies was on the verge of closing but was purchased in late 2017 by Hansu Kim, he told the Examiner. Kim also co-owns Flywheel Taxi, the cab company that sports the logo of the app on its cabs, which was formerly DeSoto Cab Co.

Kim and the new owner of Yellow Cab, Chris Sweis, have different visions for Uber-like apps to draw riders back to taxis. Yellow Cab’s current offering, YoTaxi, is branded with Yellow Cab colors, which some insiders said may confuse riders of different-colored cab companies.

Sweis, the owner of Citywide cab, recently purchased both Yellow Cab and Luxor Cab, among the largest cab companies in The City. Flywheel Taxi is its largest rival.

Kim said the cab companies Flywheel barred from using its app were operating under-par in a variety of ways: Vehicles did not have proper insurance, drivers cleared to use Flywheel were sharing the app with unlicensed drivers, and some taxi companies refused to sport Flywheel logos on their vehicles.

“We’ve had drivers provide a poor level of service to the passenger,” Kim said, “We’re trying to force the industry to abide by certain service standards.”

But Sweis, the owner of Yellow Cab, said he’s “worried” that Flywheel is breaking its promise to “unite the entire industry.”

“It’s more a move for them to dominate the taxi industry,” Sweis said. He added that Yellow Cab is creating a new app, yet to be released, that he is considering turning into a “universal app” that would serve the entire local taxi industry — and become a rival to the Flywheel app.

Kim said despite the lack of drivers, service on the Flywheel app would not be affected.

“It’s important to say, Flywheel software was going to close their doors at the end of last year” before he bought the company, Kim said, adding this is the first time he has publicly revealed that information. “We decided that the taxi industry is not dead, that it can still survive if it has the right technology and right strategy to compete.”

Still the move was met by public confusion and anger from taxi drivers, who already face hardships finding fares amid the rise of ride-hail companies Uber and Lyft.

The SFMTA, which regulates taxis but not ride-hails, also voiced worry over the sudden decision to bar companies from the app.

“While we were not informed about this step, we intend to follow up and discuss potential concerns to get a better understanding about what this means for those taxis that don’t fall under Flywheel’s Color Scheme,” said Kate Toran, head of SFMTA taxi services, in a statement.

“We hear from a lot of taxi customers that the Flywheel app works well for them, which makes this move even more surprising. Flywheel might have a transition plan in place and we will ask them to address such concerns,” she said.

Importantly, Kim said companies are not permanently shut out of the app. Should they come into compliance with Flywheel’s new terms, drivers can once again join Flywheel.

“We have big plans in making it a universal (taxi) app,” Kim said. “They just need to follow the rules.”

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