Los Angeles to require taxis to use Uber-style mobile apps

By Reuters

Jan 16, 2015 03:14 AM EST

Taxi drivers in Los Angeles will be required to use an Uber-style app allowing riders to hail cabs from mobile phones, city officials decided on Thursday, in a move to help licensed taxis compete against ride-sharing services.

The so-called "e-hail" app requirement is the latest response to the shockwaves sent through the taxi industry by the growing popularity of ride-sharing services like Uber, Lyft and Sidecar that often have cheaper fares and more efficient customer service.

"It's probably not going to be a panacea but it's going to improve things," said Los Angeles Board of Taxicab Commissioners President Eric Spiegelman. "At the very least, it's a gigantic first step."

Los Angeles cab companies, which operate 2,300 licensed taxis, reported a 21 percent drop in rides last year and complain that they are bound by regulations on issues such as safety and fare structure that do not apply to ride-share companies.

A taxi app could be particularly popular in Los Angeles, where it can be difficult to hail a cab from the street. Except at Los Angeles International Airport or major hotels, riders usually must call a dispatcher and often face long waits.

In a vote on Thursday, the five-member Board of Taxicab Commissioners opted to begin an app program on Aug. 20 and could impose immediate fines of $200 a day on drivers who do not use an "e-hail" app.

But some details remain to be worked out, including whether to include flexible fares instead of current fixed rates, whether to build a new app or use an existing one, and whether to use one or multiple apps for different companies. Certain fare structure changes would also require Los Angeles City Council approval.

Cab company representatives voiced no opposition to the app concept at the board meeting, but asked to be included in a working group that will make recommendations on app features.

"We're not against it," said Jano Baghdanian, general manager of MTS Management Inc, which operates several cab services in Los Angeles. "It's just the practical question of how does that make it a change, how does that make it a level playing field?"

While popular for its ease of use, Uber has faced scrutiny in the United States and other countries because of concerns over passenger safety. The district attorneys of San Francisco and Los Angeles said last month they had filed a lawsuit against Uber for misleading customers about its background checks on drivers.

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