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Taxi service adapting in response to ride-hailing industry

Taxi service adapting in response to ride-hailing industry

January 21st, 2018 by Philip Joens in Local News

Mark Wilson/News Tribune Tom Landwher, owner of Checker Cab, at his business Thursday. Landwher's business saw revenues decline by 13 percent after Uber and Lyft came to Jefferson City in April.

Only a few weeks after ride-hailing services Uber and Lyft moved into Jefferson City last spring, Checker Cab owner Tom Landwehr felt the crunch.

Revenues declined, Landwehr cut a position, and the taxicab company overhauled its dispatching system, all in an effort to cut costs and stay afloat.

"It's business," Landwehr said. "When you're in business, you suffer through these changes and you adapt and you try to overcome, which is what we've done."

Across the country, owners of taxi companies know all too well the effect ride-hailing services can have when entering a market. So Landwehr got in the app business to win over tech-savvy millennials.

The Jefferson City Council amended the city's code in March to allow ride-hailing companies to begin operating within city limits. Uber began operating that day; Lyft started five days later. A statewide law allowing ride-sharing companies to operate statewide took effect Aug. 28.

Over the first eight months after Uber and Lyft entered the Jefferson City market, Checker Cab revenues declined 13 percent, Landwehr said. During the first two months especially, Checker Cab saw sharp revenue declines.

"It's like when a new restaurant rolls into town," Landwehr said. "It's new, and you have to try it."

Since then, the local cab company's revenues have stabilized. Landwehr thinks he has a loyal base of customers, some of whom are wary of using ride-hailing services.

If he can't beat them, though, Landwehr wants to join them by making Checker Cab a company that emulates the tech giants eating into its profits.

After Uber and Lyft came to Jefferson City, Landwehr cut a dispatching position from his Jefferson City office. A Kansas City company now dispatches all of Checker Cab's drivers remotely.

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That company also offers an app called NexTaxi, which allows riders to hail taxis remotely via a smartphone app. The app pinpoints users' location to determine what taxi company to dispatch to any given area in the country.

Landwehr said the NexTaxi app does not require users to enter credit card and other personal information. This, he said, makes it safer than using ride-hailing services.

Checker Cab had 100 people use the app in November. Last month, that grew to 500 users, and Landwehr said he hopes it will become a bigger part of his business.

Motor oil runs through Landwehr's veins. He entered the taxi industry in 1979 and has guided Jefferson City's lone taxi company ever since.

Classic car memorabilia lines Landwehr's office/garage. In one corner sits a blue fuel pump next to a case full of car knick knacks, and vintage car signs from decades ago line the walls. The crown jewel, a restored cream-colored 1959 Plymouth car with a Chevrolet Corvette engine, sits less than a yard from his desk.

Under city law, cab companies must operate around the clock. Because of this, Landwehr sees his company as a service for the community. He wonders how elderly women who use Checker Cab to get to church each week will get there if Uber and Lyft one day force him out of business.

Landwehr hopes it won't come to that and acknowledges he's a long way from facing that decision. Still, if one day the numbers don't work, Landwehr said he won't hesitate to pull the trigger.

In the taxi industry, Landwehr's story is not unique. Taxi rides in Chicago decreased from 2.3 million in January 2014 to 1.1 million in January 2017, according to USA Today. In March, 42 percent of Chicago taxis were not in operation, according the newspaper.

The Los Angeles Times reported in 2016 that taxi trips decreased by 30 percent in the city between 2012-15.

Uber and Lyft drivers around Jefferson City also see driving as a service for their community. Phillip Rutledge, an emergency medical technician who also drives for Uber, said a group of drivers around the city monitors a Facebook page and helps people find rides at odd hours.

Uber spokeswoman Charity Jackson declined to say if ridership numbers in the area met the company's expectations. Jackson also declined to specify how many Uber drivers work in Jefferson City, other than to say the company has "hundreds" of drivers in the area. Lyft spokesman Scott Coriell did not respond to requests for comment.

Drivers around the area disagree over whether there are enough riders around Jefferson City. Rutledge said rider traffic can be slow, especially during the winter. He and other local drivers attributed much of this to a glut of drivers coming in from areas like Rolla, the Lake of the Ozarks and Columbia at otherwise busy times.

"Unfortunately, the statewide law made it a bit more crowded as a local driver," Rutledge said. "Reasons like this are why most drivers don't attempt driving Uber as a full-time job."

Nathan Hays, who sells cars full time at the Jefferson City Autoplex, also said this hurts business.

"You'll see some unfamiliar cars," Hays said.

Still, he said he thinks it's fairly busy for part-time drivers. He said many people locally still don't know Uber exists, though. Uber advertises nationally, but Hays spent his own money on local Facebook ads to get the word out. He said many people also may not be comfortable using a ride-hailing app.

"I think that people know what Uber is, but they wouldn't know how it worked," Hays said.

With Landwehr's company now more nimble, he and ride-hailing drivers think there's a place for both services. In the end, Hays thinks ride-hailing companies are just another mode of transportation.

"Consider ride-sharing as another player of public transportation," he said.