The Uber Impact: Taxis Stall, Then Accelerate in San Francisco

Close to 1,000 people applied for an A-card license to drive a taxi in San Francisco in the fiscal year ended 2015, more than any other year on record.
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For San Francisco taxis, Uber Technologies Inc. has been more of a speed bump than a dead-end street.

When Uber revved up in its home town of San Francisco three years ago, taxis hit the brakes. The number of people applying for taxi driver licenses (called A-cards) and buying taxi car permits (called medallions) declined significantly.

Yet in the past two years, both have bounced back, according to records from the San Francisco Municipal Transportation Agency, which regulates the city’s cab industry. In 2013, medallion sales spiked. More people applied for A-cards in the fiscal year ended June 30 than in 2010, the year Uber launched in San Francisco.

Source: SFMTA and WSJ

Every driver must have an A-card

and every vehicle needs a medallion. But drivers for Uber and other on-demand ride apps like Lyft Inc. don’t need either. Uber owns no cars and employs no drivers.

The SFMTA is doing its part to fuel interest in becoming a cabbie. There used to be a $255 application fee for A-card permits, but the agency waived the fee in 2013. Medallions cost $250,000, and there are only about 2,000 available in San Francisco.

Source: SFMTA

What explains this resurgence in people entering the taxi industry? Hansu Kim, owner of the Flywheel taxi fleet, says for the first time he is seeing Uber drivers applying to become taxi drivers. He says they realize they can make a higher hourly wage driving cabs than Ubers.

“There is a stigma attached to taxi cab driving. But Uber and Lyft have created a lot more people who would now consider driving as a way to make money,” says Mr. Kim.

Uber didn’t respond to requests for comment.

Taxi drivers’ incomes are still down about 25% since Uber launched, but their incomes have started to stabilize, according to Mr. Kim. An experienced taxi driver in San Francisco makes between $150 and $300 in take-home pay a day, he says. Uber said earlier this year that its drivers earn an average of $19.04 an hour – but that excludes expenses that come out drivers’ own pockets, including gas, maintenance and insurance.

Of course some cabbies are also becoming drivers for Uber. 

Taxi drivers must have a medallion to operate in the city of San Francisco. There are about 2,000 medallions for the city.
Jerry “Woody”