Since its debut on the streets of Los Angeles, Uber's innovative approach to ride-sharing has posed a challenge to the traditional taxi cab. However, new legislation is rolling out in that may level the playing field by requiring a similar app to be used by Los Angeles-based taxi drivers.
In a vote Thursday, the Board of Taxicab Commissioners voted to require the use of an "e-hail" app by Los Angeles taxi drivers. Any driver found not to comply with the order could be fined $200 a day starting August 20th. The details are still in the works, but cab company representatives voiced no opposition to the idea so long as they are allowed to participate in overseeing the app's creation. If implemented correctly the new system could revive the city's failing industry, where current restrictions and difficulties make hailing a cab difficult. The app's ability to close in on a user's GPS location would prove valuable for riders and drivers alike.
Since being released on the Los Angeles streets roughly three years ago, Uber has grown in appeal, especially among the younger and tech-savvy generation of users. While typical taxi fares in LA start at $2.85 a ride plus $2.70 a mile, Uber competes by charging 80 cents a ride with $1.10 per mile. By labeling itself a "ride-sharing service," it has attempted to bypass many of the licenses and specific requirements required of the taxi companies. Due to its aggressive strategy and marketing, Uber has faced bans and restrictions in Nevada, Thailand, Spain, France, Germany, and New Delhi. It has routinely been sued for violations of city laws, but often chooses to pay the fine rather than cease business in the cities wherein it operates.
Currently, Uber is involved in lawsuits with the cities of Los Angeles and San Fransisco for allegedly misleading customers about its background checks on drivers. Since its introduction in Los Angeles, taxi companies have seen a huge drop in business. In 2014 alone, LA's nine licensed taxicab companies suffered a 21% drop in rides. Come August, we will begin to see the effects of this policy being implemented. Time will tell whether the new policy will cripple current taxi drivers or lead to a competitive advantage.
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