Wednesday, June 8, 2011

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 CabulousTaxi 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. 16th, 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.  


  1. Yellow and Luxor complain that they need more cabs because they can't pick up all the people that call them.
    It doe not take too much imagination to understand why they don't want a more effective system for delivering the product.
    I think there is a huge untapped market of riders that would get out of their cars if they though they could call and really get a cab but all almost everybody but Chris H. wants to do is put more cabs on the street.

  2. Luxor and yellow are full of s!it, what management fails to mention, is how un-

    Reliable their dispatch systems are, for example, at least from my experience,

    50% of my calls from yellow are nogos, and when I do not use the dispatch, I

    Drive around for at least n hour of my day empty, so I would love to have the

    OTA put In place, it would make everything more efficient, thus exposing the

    Lies and fraud of Luxor and yellow!

  3. Cheesh John, what a load of BS. You want "open taxi?" Get your checkbook out and pay for it, just like Luxor Cab has been doing for years. Why should my fees to MTA be used to buy "open taxi" for you?

    You and I are business competitors, remember? Why should the city take fees from me to provide a commercial service to your company for free?

    OTA is not dead. You can get a version of it for your cab right now at (which is advertised on your blog.) If you want it, just pay for it and stop complaining.

  4. all the calls in the city should go to one dispatch, and distributed by something like cabulous, or all calls that have not been answered in 7 minutes taken from regular dispatch companies and put in a giant pool, cab service would improve 100% joe public would be very happy.

  5. All Yellow and Luxor have ever wanted is more medallions, Poor service actually serves their ends because most of the public have a single idea about how taxi systems work: "I had a hard time getting a cab, so we need more cabs and that wd fix the problem". The drivers themselves have always understood that the problem was dispatch and have been calling for central dispatch (which has now evolved into something like OTA) for about 20 years, but no one in City Hall wd listen to them. Han has it exactly right.

  6. The larger taxi companies are blind or refuse to see the future which is already upon us. Clinging to their dispatch services and refusing to embrace the change which technology (Iphones and android operated phones) have already brought to the everyday citizen is short sighted and will eventually lead to a slow death. When the SFMTA is unable to stop companies like UberCab which unleashes unlimited Gypsy cabs into our industry, we better adapt or perish. Just look at Chevron as an example which is plowing billions of dollars into alternative energy development. They know oil will run out some day. And the day when people with a smart phone will stand in the rain on a Friday night hoping a cab will come along are fast disappearing also. When that tipping point comes in the near future, no driver will pay a $100 gate fee to drive around in circles all night and watch black cars with GPS enabled technology beamed to the users smart phone pick up all his fares.

    I hope this leads to the few remaining smaller taxi companies investing in their own smart phone applications GPS technology and attracting medallions away from the big three.

    The sad thing is, I have to leave this comment anonymous because small group of powerful elite who profit from stifling innovation can crush a smaller person in this business with vision.

  7. Charles Rathbone writes:
    "...You want "open taxi?" Get your checkbook out and pay for it, just like Luxor Cab has been doing for years"

    Well, the money used for this would be from our permit fees, which we've also been paying for years. The MTA would be putting these funds to use in a way that would benefit not just most taxi drivers who've already paid this money, but it will help the public get cabs also.

    It's too bad Luxor's willing to deprive drivers of this worthy use of their money, which will improve their income, and well as the riding public of this service. I suppose this backs up what John pointed out about cab companies not really being in the business of serving the public.

  8. Barry and others, it is not your permit fees alone but all kind of money which will be used
    to buy you OTA. Barry your cab I guess is in
    Royal cab now and Royal do have Cabulous. Royal
    is on Cabulous, is that not enough. Now you will say that oh,no, now I want OTA. Tomorrow you will
    say that is not enough, you need another service.
    Correct, get your checkbook out and buy it and
    enjoy the fruits. Tell all your friendly cab
    companies to stop their dispatch or share money
    pool and buy OTA, none of them will do it then
    why Yellow and Luxor should do it. John Han--
    are you really driver's representative. You came
    from the back door and is now trying to hang on.
    I have never seen one single person with you. Go and follow your fellow driver Tariq who must have
    spent thousand of dollars and enormous amount of
    time to revoulationize the drivers movement. What you have done ?? Was you sleeping when
    5 % credit card charge, back seat terminals and all other matters were passed. You could have used TAC forum and if necessary you could have gone to the drivers to inform them of what is going on in the industry. Don't steel from other people. Start telling these companies to pay
    for OTA and not by MTA where money belongs
    to all of us too.

  9. Anonymous on 6/10/2011 @ 12:55am

    Instead of spending your time acting critically ignorant, why don't you march

    To the muni drivers union and negotiate with them so drivers can make 70k a

    Year with benefits so you won't have to critisize people with blogs, at least,

    Unlike yourself, try to make a difference in a corrupt system.

    It is not to say, that I have critisisms of people too, but it seems your lashing

    Out at persons trying to help others is just plain wrong!

  10. This comment has been removed by the author.


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