SF cab companies brace for winter

With the ever-exponential growth of Uber, Lyft and similar ride services, taxi drivers in The City keep warning their own end may be near. Could this winter — traditionally the slowest season for the for-hire transportation business — be that final blow to the long-suffering cab industry?

It's unlikely, but taxi companies are bracing for the worst.

Last winter was the first time cab companies saw a “significant drop-off” in drivers — about 20 to 25 percent, according to Hansu Kim, president of the 206-vehicle DeSoto Cab Co., the third-largest fleet in The City.

“I'm afraid of guessing,” he said of this coming winter. “My fear is that it could be worse than last year.”

Summer is the busiest time of the year for taxi drivers, and even so, 20 to 25 percent of shifts are not being filled by drivers this year, Kim said. Not being able to fill shifts, in fact, is his biggest fear this winter.

Some 2,200 cab drivers are out on the streets, he estimated, and adding 7,000 to 10,000 drivers with transportation network companies like Uber means more than 12,000 could be competing for business during the low season. In turn, driver incomes could be diluted.

“I think the taxi industry is going to hit a low point this winter,” Kim said.

The grim outlook comes on the heels of an eye-opening report on the industry's vitality, presented by Kate Toran, director of Taxis and Accessible Services, at last week's San Francisco Municipal Transportation Agency board of directors meeting. The average trips per taxi plummeted from 1,424 per month in March 2012 to 504 this past July, a 65 percent decline.

Nazeer Sadiq, 58, a Yellow Cab driver for 21 years, foresees a 20 to 25 percent drop-off in drivers this winter. The former engineer said he has sent three of his four children back to his home country of Pakistan because he could not afford their education in the U.S. One daughter is still here due to a scholarship.

The anticipated dwindling of drivers has caused Khaing Myo, fleet manager for 64-vehicle fleet Fog City Cab Co., to tell his medallion holders to be on standby to fill shifts. Some drivers return to their home countries, such as Brazil, to escape the cold weather and slow business in San Francisco. Driver income during the winter traditionally drops 30 to 50 percent, he said.

“If there's a driver shortage, [medallion holders] have to cover it,” Myo said. “Otherwise, we're going to have a big, hard time.”

Toran said the SFMTA is looking at various avenues to support the taxi industry, including relaxing some regulations, and hopes some can take effect in time for winter.

“We're marching along. I'd like to take some amendments to the board very soon,” she said. “But we have a process, so we have to kind of balance speed and the process.”

The hope, according to some taxi-industry veterans, may lie in e-hailing apps like Flywheel, which says it has 80 percent of The City's taxis on board, or roughly 1,480 cabs.

Flywheel, from the end of summer 2013 through last winter, grew from having 40 percent to 80 percent of vehicles on its network, Chief Product Officer Sachin Kansal said. In addition, the number of rides and users from September 2013 to March grew by more than threefold, he said.

“I think the reality of the taxi industry and their tech adoption is a lot better than the perception is, and that's the perception we're trying to change,” Kansal said. “The way to get a taxi is not what it used to be.”

The taxi industry will make it through this winter, said Charles Rathbone, assistant manager at Luxor Cab, the second-largest taxi company in The City with about 220 vehicles.

“We're anticipating a difficult winter. I would be lying if I said otherwise,” he said. “But that's not to say that we're expecting a disaster. Everybody in the taxi business is having to tighten our belts this year and we are, too. It's a necessary response to changing business conditions.”

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