Proposal On Taxi Service Improvements - Open Taxi Access (OTA). By John Han.

In short, Open Taxi Access (OTA) was a one year government subsidized pilot program that would allow for internet apps like Cabulous, Taxi Magic, or Uber to be installed as standard equipment inside of taxicabs.  The idea was to, “maximize the use of licensed, San Francisco taxi vehicles as a form of public transit by increasing the confidence of customers in the viability of taxis”.  (SFMTA “Request for Proposals for Open Taxi Access, Nov. 16^th, 2010.)

The way OTA would’ve achieved this idea would’ve been to allow potential customers to visually see available taxis on an internet map via website or smart phone app, hail the taxi driver directly, and should the driver accept, visually track the taxi driver’s progress to their location.  This would’ve bypassed a need to go through a company dispatch system.  

It would’ve also allowed the driver to visually see the passenger’s location via internet map, and enable two-way voice contact between drivers and passengers.  That's important because drivers often have the anxiety that when they get to a dispatched call, the passenger won't be there.  And passengers often have the same anxiety that the cab may not show up, and therefore, they should just as well hail a cab without canceling their order.  

Additionally, OTA would’ve enabled text/voice messaging throughout an entire participating fleet in the event of an emergency, crimes in progress or prevention, traffic congestion, etc. 

It was proposed as a voluntary measure.  However, according to SFMTA Taxi Services, the management of Luxor Cab has successfully lobbied to kill OTA, and the pilot program is currently stagnant.  The management of Yellow Cab, the City’s largest cab company, has also expressed opposition to OTA. 

However, the president and co-owner of De Soto Cab, Hansu Kim, publicly supported it. 

Misunderstandings Between Cab Companies And The Public Ridership:

In my experience, most passengers in San Francisco are not knowledgeable about the taxi industry, particularly around dispatch services.  The San Francisco Planning and Urban Research Association (SPUR), in 2001 gave this description of a cab company,

“Taxi companies are currently not in the business of carrying passengers. They might more accurately be described as vehicle leasing firms, rather than taxi companies. They derive revenue from leasing vehicles to drivers, for a flat fee per shift. It makes no difference to a firm’s revenues if the driver carries one passenger or fifty passengers during his or her shift, at least in the short run.  This means that firms have little interest in improvements that could help to boost overall taxi ridership. Marketing is virtually non-existent, and there is little incentive to improve efficiency, in terms of the percentage of time a taxi is carrying passengers, or performance.  Taxi companies do not compete for passengers. Instead, they compete to attract the individuals that hold the City-issued taxi medallions (permits), without which the firm cannot continue to exist.”

(San Francisco Planning and Urban Research Association SPUR, “Making Taxis Work”, 2001)

The taxi industry generally understands this, but the public generally does not.  The public generally thinks that when they call a cab company, the company regards them as a valued customer of the company, since the public typically has to call through to a company to get a cab.  But this is an illusion. 

Taxi companies are said to be “medallion management firms”, and essentially operate more like niche car rental services, claiming their primary “customers” as the taxi drivers themselves, not the passengers. 

This structure may be inherently flawed for the purposes of service volume demands, as cab companies are only interested in expanding their businesses by increasing the number of medallions that they may lease to drivers, and not necessarily in increasing the volume of public rider-ship or maintaining service quality.   

With regards to this, the SPUR report suggests,

“Poor availability does not necessarily mean that there are too few taxis on the streets.

Availability is not the same as supply, because both supply and distribution determine

availability.  Poor availability in some parts of the city may be due to taxis clustering at more lucrative locations such as the airport or downtown hotels, rather than to a shortage of cabs. Dispatch technology, the number of taxis handled by each dispatch service, and the incentives for drivers to accept radio orders are other important factors that affect availability, but not the overall supply of licensed taxis.”

(San Francisco Planning and Urban Research Association SPUR, “Making Taxis Work”, 2001)

Therefore, the manner in which taxi services are being ‘distributed to the public' should be given serious consideration by the MTA and its Board of Directors.  The Directors of the agency should consider the distribution of services as equal in importance, and parallel to the supply of medallions.  This is especially true since the MTA is currently considering issuing new medallions.  

In my opinion, the only flaw in OTA is that it was proposed as voluntary.  

OTA should be mandatory.  

Because taxi firms, or should I say niche car rental services, do not directly depend upon service volume in the public rider-ship as a primary measure of profit and loss.

It is therefore unfair to the public rider-ship to have to access reliable taxi service almost strictly through these cab companies…  companies that are not financially dependent upon the assurance of their customer service and satisfaction. 

The public rider-ship should be able to access taxis through a Central Dispatch system not affiliated with any particular color scheme.  This is also true since the anecdote is that most passengers are not necessarily particular about which company they ride with.  They mostly wish for a cab to be reliable, and the driver be courteous and competent.  And that is all... mostly.  

But if Centralized Dispatching is too controversial, then passengers should be able to access drivers directly through the Open Taxi Access program, which would be the second best thing.  

Not allowing this is a disservice to drivers and to passengers, and only serves to shield the special interests of larger companies such as Yellow and Luxor.