In the past, we used to hail a taxi cab by either waving our hands while standing on the side of a street, or by calling a local telephone number that (sometimes) sent out a ride. Now, a substantial number of Americans get their rides by simply looking at their smartphone and ordering an Uber/Lyft ride. Yesterday, we saw the first major consequence of the incredible surge in the use of ridesharing technology, rather than the yellow taxis we have been accustomed to.
In San Francisco, California, the largest taxi company is in the process of filing for bankruptcy, citing competition from Uber and Lyft. Perhaps not surprisingly, Uber was founded and is currently headquartered in San Francisco. According to reports by the San Francisco Examiner, Yellow Cab Co-Op is preparing to file for Chapter 11 bankruptcy, according to a letter to shareholders that the Examiner obtained.
The letter was dated December 10, 2015 and Yellow Cab Co-Op president Pamela Martinez indicates:
We are in a midst of serious financial setbacks. Some are due to business challenges beyond our control and others are of our own making. Today we are faced with fiscal obligations that far exceed expected income.
The letter goes on to suggest that the documents for bankruptcy were being prepared, and the process would move forward “within a month.”
In a clear swipe against ridesharing companies, Pamela Martinez writes:
We must get more paid shifts and more drivers paying them. This our principle source of our income. For that to happen we need to have not just more drivers, but more drivers who are happy to be behind the wheel of a Yellow cab because we offer the best opportunity to make a living in a taxi.
Both Uber and Lyft have taken dramatic steps in order to recruit drivers, often handing out large bonuses to new drivers of over $500.
We have seen efforts from the taxi industry to introduce technology to their offerings, with taxi companies in New York City finally introducing app-based ordering in 2015. However, it seems as though it may be a little too late as ridesharing has firmly entrenched itself into our daily lives, replacing the dependence on taxis.
What are your thoughts on the possibility that we may not see taxis in some major cities in the future?
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