By Daniel Flatley
WWR Article Summary (tl;dr) Across the “rides” industry, the number of independent contractors has grown by 174 percent in five years, compared with only 21 percent for cab company drivers, according to a Brookings Institution analysis.
Taxi companies across the U.S. waged a bitter, high-profile battle to keep Uber Technologies Inc. and Lyft Inc. from bringing the sharing economy to cabs.
Now the cabbies are adopting a if-you-can’t-beat-them, join-them-strategy.
Pittsburgh Yellow Cab, for example, rebranded itself last year as zTrip. A century-old fixture in Steel City, it launched an app and offered a hybrid of services: accepting cash along with credit cards, letting rides be hailed from a corner or scheduled online and forgoing Uber’s controversial surge pricing during peak periods.
“The pie’s bigger,” said Jamie Campolongo, the company’s president. “So why not get over in that segment?”
Campolongo was able to do that, in part, because of regulatory changes the ride-sharing companies championed.
Uber and Lyft have spent millions of dollars to win approval for their web-based business model in nearly all 50 states. In many cases, this allowed them to escape more onerous regulations put on cab companies, such as background checks with fingerprinting and requirements to carry commercial insurance.
The effort changed both industries. Across the “rides” industry, the number of independent contractors has grown by 174 percent in five years, compared with only 21 percent for cab company drivers, according to a Brookings Institution analysis. Along the way, as in other industries disrupted by technologies, the ride-sharing services drove some old-line taxi companies into bankruptcy while clearing the way for others to compete with them head-to-head.
“A perfect example for us was the last home Steelers game,” Campolongo said. ZTrip had 300 of its cabs out along with 126 independent contractors to ferry football fans around. “We would have never had 426 cars on the road. The ebb and flow of this business allows the company to kind of expand and contract.”