Taxis have long worked at a disadvantage against rideshare titans like Uber and Lyft. The problem? Customers don’t know how much their cab ride is going to cost.
But as the taxicab industry continues to adapt, and slowly fight back against their app-based competitors, that will likely change.
Next month, San Francisco regulators are expected to weigh approval of a pilot program that would enable cab companies to give fixed-fare pricing to customers before they book a ride. Currently, fare estimates provided by taxi firms are not guaranteed. Prices often change to reflect what a cab driver’s meter calculates.
“This is a key feature, in my feeling, that will be really a game-changer,” said Hansu Kim, president of Flywheel Technologies, operator of an app platform for cab companies. “The biggest concern is the perception that taxis are more expensive. By going to a flat rate price, people will be able to compare very clearly that prices are getting equivalent.”
Without that assurance, Kim says passengers have “meter anxiety” that factors into them choosing Uber or Lyft. But due primarily to a driver shortage unable to meet demand, exorbitant rideshare costs are driving a flood of passengers to taxicabs for the first time in years.
Fixed fares are something cab companies have sought to implement but need approval from SFMTA, the regulator of city cabs. (State regulators oversee Uber and Lyft, formally known as Transportation Network Companies.)
The pilot would have fares determined by an algorithm using live and historical trip data. SFMTA also updated taxi e-hail requirements in May that require apps to provide customers the ability to select vehicle type, input locations, and estimates for fare and time needed for the trip.
YoTaxi SF, an app to book and track rides by Yellow Cab of San Francisco, already offers estimates so passengers have an idea of how much they’re in for. They also charge a flat rate of $35 from The City to San Francisco International Airport.
Now, the company is awaiting clearance to toggle the app to display set fares.
“We’re at the ready,” said Chris Sweis, CEO of Yellow Cab. “Whatever you see is the fare you’re going to pay.”
Sweis notes that drivers are somewhat familiar with the concept in the sense that they historically negotiate prices with passengers at or below the meter price. But now, the operations are more in line with the technology and convenient features consumers are used to.
“It’s just our desire to compete and provide value to our riders, Sweis said. “That’s something we’re eager to do.”