In Fight Against Uber, Can Apps Give Boston Taxis A Lift?

Taxis lined up at a taxi stand on Boylston Street in Boston on Wednesday, Sept. 30, 2015. (Jesse Costa/WBUR)
Taxis lined up at a taxi stand on Boylston Street in Boston on Wednesday, Sept. 30, 2015. (Jesse Costa/WBUR)

The local taxi industry is hoping an app of their own will give cabbies a new tool in their fight against Uber and Lyft, though taxi advocates say regulations still keep them from a level playing field.

The first technology coming to the area is Way2Ride, a ride-hailing app for taxis that will roll out in Boston later this month. The app first launched in New York City last month and then Philadelphia, and will hit other major cities across the country over the next year.

The app will initially roll out to about 500 taxis in Boston with a goal of reaching more than 1,000 city cabs, according to Jason Gross, the vice president of strategy and innovation at Verifone, the company that created the app. There are currently 1,825 licensed cabs in Boston.

“I think what the last few years have shown us is that there’s real demand among consumers to be able to get a ride with their phone,” said Gross, who also co-founded the Way2Ride app. “What Verifone is doing is adding that convenience of hailing with your phone to the safety and security of knowing that you’re going to have a licensed and regulated cab pick you up with a professional license and insured driver.”

Legislation being considered on Beacon Hill would require ride-hailing companies to insure drivers and have state-issued permits.

Way2Ride allows users to hail a taxi, but it can also be used to pay fare if you hail a cab off the street. Customers can scan their credit cards to preset payment for their rides and then are automatically charged after the ride. The app also takes payment through Apple Pay and Google Wallet.

Unlike Uber and Lyft, Way2Ride doesn’t have “surge pricing,” in which prices increase based on supply and demand for vehicles. The Way2Ride app reads from the taxi meter and charges that amount. Gross said the company will eventually implement a flat $1.99 hailing fee, part of which will be shared with the driver. Way2Ride also gives customers the option of tipping their driver. That’s not an option with Uber, but is with Lyft.

Uber and Lyft declined to comment for this story.

Verifone already has a foothold in the taxi industry as a provider of the credit card payment systems located in the backseat of cabs. Gross said the company provides about 50 percent of the taxi payment systems in Greater Boston and will be rolling out its app “through our commercial relationships.”

The Boston Business Journal first reported on Way2Ride coming to Boston.

The Boston Police Hackney Unit, which oversees the city's taxis, has been working with Verifone, according to Lt. Tom Lema of the hackney unit. The department is also working with Creative Mobile Technologies (CMT), the city's other credit card payment system provider for taxis, which is also looking to bring a similar taxi app in Boston.

"Everyone in this industry understands the need for an app," Lema said in a statement to WBUR. "These two companies are now showcasing Way2Ride (under Verifone) and Arro (under CMT). Captain [Jim] Gaughan has had extensive discussions with both technology companies. He has been supportive of both companies and others."

Lema said the hackney unit has been discussing apps with the mayor's taxi advisory committee and the local industry is also looking at different apps, such as Curb and Flywheel.

A smartphone is mounted on the glass of an Uber car. (Rafiq Maqbool/AP)
A smartphone is mounted on the glass of an Uber car. (Rafiq Maqbool/AP)

In Search Of One 'Universal' Taxi App

While Verifone and CMT look to bring their apps to Boston, taxi advocates are working on implementing a “universal app” for drivers.

Over the last two months, the Massachusetts Regional Taxi Advocacy Group (MRTA), a statewide coalition of taxi owners and companies, has been testing out different ride-hailing apps for taxis. The idea is to find one app that can be widely adopted by taxi companies across the state.

“Everybody sees a need for this, so all these technology companies have been coming and bombarding taxi companies with their solution to the problem,” said MRTA spokesman Stephen Regan. “Rather than everyone doing this hodgepodge, the wise thing to do is just make sure everybody is using the same platform.”

MRTA plans to choose an app to recommend to its members, with a goal of rolling it out in December. But ultimately it will be up to the taxi companies to adopt whatever app the coalition selects, as it cannot be mandated, Regan said. He said his group has been working with eight different companies to assess their apps. Regan said they are aware of Way2Ride, but he is unaware of any direct conversations with the company.

While these current efforts to equip cab drivers with their own ride-hailing app are new, the concept of a taxi app isn’t all that new. Regan said several local cab companies, such as Boston Cab, have had their own apps. Taxi app Hailo also operated in Boston up until last year, when the London-based company shuttered its operations in North America.

“Who’s going to download 15 different taxi apps for the city of Boston when you can just do one?” Regan said.

If the taxi industry can unite around one app, it could help them compete with Uber and Lyft, Regan added.

But There's No App For Pricing And Jurisdiction

That is, at least in terms of giving customers the same easy way to hail rides. Because even with this technology, taxi advocates say there is still an uneven playing field, since cab drivers face stricter regulations.

“If you don’t have a smart app that has the same opportunities that Uber has, then how do you compete?” said Donna Blythe-Shaw, the spokeswoman for the Boston Taxi Drivers Association. "If you put a smart app out there and say, 'OK, now a customer can get on their smartphone and call a taxi,' well, that’s going to be great. But if they also find that taxi rate is twice as high as an Uber rate, how do we compete?"

Taxi drivers in yellow T-shirts sit together during a hearing on the regulation of ride-hailing companies such as Uber and Lyft, at the State House in Boston in September. (Steven Senne/AP)
Taxi drivers in yellow T-shirts sit together during a hearing on the regulation of ride-hailing companies such as Uber and Lyft, at the State House in September. (Steven Senne/AP)

For taxi advocates, there are two glaring issues that apps won’t solve: pricing and jurisdiction. In Boston, taxi meter rates are set by the city, and cab drivers are not allowed to pick up customers in other cities. Uber and Lyft can set their own prices and pick up customers anywhere.

Blythe-Shaw, who represents small taxi owner-operators and shift drivers, said she is aware of Way2Ride and “universal app” plans, but her group hasn’t been part of any discussions about them. She called the apps a move in the right direction, but said the industry’s “draconian regulations” need to change to give taxis the same flexibility as Uber and Lyft.

“Each day that goes by without 21st-century technology and without a change in the regulations, without change in the way the taxi industry business model works today and the cost of that meter and the cost of that medallion, it will be difficult to have a level playing field,” she said.

Regan agrees. He said the “universal app” idea his coalition is working on is one step in leveling the playing field, but the issues of pricing and jurisdiction can only be addressed by legislators and regulators.

“Isn’t that ironic? That when the taxi industry is looking to increase its technological capabilities for consumer benefit that we have to go through regulation,” Regan said. “Yet Uber and Lyft enter the market and say, 'We don’t care about regulations,' they just go and do it."

Customers, on the whole, are focused on their own rides -- and they're increasingly choosing ride-hailing services. In Boston, taxi ridership was down 22 percent in the first half of this year, compared with the same period last year, according to data from the city.

There are currently four bills to regulate ride-hailing companies on Beacon Hill. One bill, filed by Gov. Charlie Baker, has Uber’s support. Another bill, filed by Rep. Michael Moran and Sen. Linda Forry, has the taxi industry’s support. The four bills call for a variety of regulations for Lyft and Uber regarding driver background checks, insurance coverage and licensing, among other measures.

“Whatever comes out at the end of the day in those discussions, it’s very important that each entity get to operate under the same rules so that they can compete,” Regan said.


Zeninjor Enwemeka Senior Business Reporter
Zeninjor Enwemeka is a senior business reporter who covers business, tech and culture as part of WBUR's Bostonomix team, which focuses on the innovation economy.



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