In the wake of a startling chapter 11 bankruptcy announcement by San Francisco’s largest taxi company — Yellow Cab Co-Op — many across the nation asked whether upstarts Uber and Lyft have driven the taxis out of their hometown.
“Uber’s First Casualty?” read a headline from Forbes. News reports from the Washington Post, National Public Radio and Guardian UK asked similar questions.
The story on the ground in San Francisco, however, is more complex.
In the years since Uber and Lyft rose to prominence, The City’s two largest cab companies — Flywheel Taxi and Yellow Cab — pivoted to compete against rideshares in two vastly different ways.
“One is more incremental and closely aligned with the existing taxi business, another is more disruptive in nature but different, too,” said Susan Shaheen, co-director of the Transportation Sustainability Research Center at UC Berkeley.
Shaheen is a leading expert on the emerging tech-ride economy of Uber, Lyft and others.
The incremental approach she described is Yellow Cab’s. The iconic company moved to improve its dispatch system and promote its own app, which is now called YoTaxi.
YoTaxi only summons cabs from Yellow’s own fleet.
Cabbies on background described the company as a historic taxi leader — and perhaps hesitant to give up that dominance by adopting apps which may also hail cabs from other cab companies.
The more “disruptive” approach, Shaheen said, was Flywheel Taxi’s.
The company was originally called DeSoto Cab Company. Its co-owner, Hansu Kim, was an early enthusiast of app-based taxi software like Cabulous, which is similar to Uber and Lyft.
Seeing the release of a new app that summoned taxis from many different companies — Flywheel — Kim moved to adopt Flywheel’s color scheme for his fleet of cabs in February 2015.
“And DeSoto was a strong brand,” he told the San Francisco Examiner. “People criticized me early on.”
Giving up DeSoto’s iconic blue paint-job seemed tantamount to business suicide in an industry where the recognition of a cab’s color scheme can translate into good business. He took the risk anyhow.
DeSoto was rebranded Flywheel Taxi, and the cabs roll down the street in the same red color, and name, as the app.
Yellow Cab did not return messages to speak to the Examiner for this article. But when the Examiner spoke with company executives earlier this week, they said the company has 530 medallion-holding drivers. Typically, three drivers will drive one cab throughout a week, Kim said, meaning Yellow Cab may have as many as 1,500 drivers.
Kim said Flywheel Taxi, by comparison, has about 250 medallion holders and about 750 drivers. But that’s expanded from the 300 drivers he had in 2011 when he took over the company.
Flywheel Taxi is expanding, despite Uber and Lyft’s competition.
Barry Korengold, a taxi driver from the San Francisco Taxi Workers Alliance, said some cabbies worry Flywheel is trying to capture too many fees from drivers.
“I suppose Flywheel is moving ahead,” he said, “but there’s an argument that they’re turning into [Uber and Lyft].”
The two taxi companies also differ in another key way. Yellow Cab has more “gas and gate” cabs, and Flywheel Taxi embraces an “owner-operated” cab approach.
The systems are complex but basically differ in this way: Medallions are distributed by the San Francisco Municipal Transportation Agency and license drivers to operate taxis. In a gas gate system, medallion-holders allow cab companies to find and charge drivers to use them and the company takes a cut.
In an owner-operator system, the medallion-holder directly finds and charges drivers for use of the medallion. Cab companies provide insurance, the use of the color scheme and other benefits for a fee.
Drivers said the owner-operator system of Flywheel offers more autonomy, like Uber and Lyft drivers enjoy. But it also entails more work on the part of the medallion holder.
Shaheen said it’s too early to say which methods — Flywheel Taxi or Yellow Cab’s — are the right road for cabs competing against Uber and Lyft.
At least one cabbie agreed with Flywheel’s new direction. William Wong drove for Yellow Cab for 18 years, but jumped ship to Flywheel Taxi in 2015 and said he appreciates his new company’s aggresive moves to stay relevant in the new transportation economy.
When he left Yellow Cab, “They didn’t say anything,” he said, “like they didn’t care.”