Uber brings hope to Orlando taxi drivers, fear to their bosses

July 12--Bulldozers and backhoes working on Mears Transportation's new $20 million headquarters are grinding to a halt as nervous executives put the project on indefinite hold. The reason: Uber, a smartphone app that threatens to cut deep into taxi-industry profits.

Taxi drivers, meanwhile, are wondering whether it could mean a better life for them.

It's been only five weeks since Uber brought its UberX service to Orlando, offering app users the option to summon a driver in a personal vehicle to give them a ride for a fee often lower than what Mears and other taxi companies charge.

But those few weeks have been long enough to shake things up. Taxicab-company owners wonder how they'll stay in business -- and if they do, how much business will be left.

"Uber is an existential threat to the legacy taxi industry," said Paul Mears Jr., chairman of the 75-year-old company. "Whatever hit we take will be a pretty substantial hit to us. We're going to lose 30 to 40 percent of our business."

But taxi drivers, who ferry around some of the nearly 60 million people a year who visit Orlando, aren't nearly as concerned. In fact, they think the Uber revolution could improve their lives.

Several cabdrivers who lease their cars from Mears or other taxi companies told the Orlando Sentinel they want to switch to Uber because they think they can make more money.

"If Uber opened up right now, then all the companies are going to be without drivers. If you talk to 1,000 drivers, 950 will tell you they are going to go to Uber," said a Quick Cab driver who has driven in Orlando for the past six years. He and other drivers spoke on the condition of anonymity, fearing recriminations from taxi companies.

Both the drivers and the taxi companies are waiting to see how City Hall handles Uber's entry into the market.

Orlando heavily regulates its taxi industry, requiring permits for both drivers and vehicles; police background checks; commercial insurance; and fare meters, among other things. But Uber ignored the city's regulations when it came to town, arguing that the city's rules didn't apply to a business model it describes as "ridesharing."

Mayor Buddy Dyer and Uber executives have since met and pledged to work together on new regulations that would allow the company to operate legally. A competitor, Lyft, has also met with city officials about its plans to serve Orlando.

In the meantime, the city has cracked down, ticketing 14 Uber drivers in the past two weeks and towing their cars.

Uber has promised to reimburse the drivers. Still, fear of tickets and towing has so far kept most taxi drivers from signing up with Uber.

"Let Uber come here. It's going to be good for the customer and the driver," said a driver for City Cab, a Mears company.

Drivers complain that it's hard to make a living behind the wheel of a cab in Orlando. There are six companies permitted in Orlando; Mears has about half the permits. Drivers aren't employees. They are independent contractors who lease a vehicle from one of the companies.

Leasing a car ranges as high as $129 a day, depending on the company, the type of car and what permit it carries. It costs more to lease a car with a permit allowing airport pickups, for instance.

Drivers keep the fare -- rates are set by the city -- but must pay for gas and credit-card fees.

"We can't make any money," said a Quick Cab driver waiting for passengers outside the Amtrak station. "Sometimes you don't have anything left after you pay for the car."

An Uber executive, not speaking specifically of Orlando, recently said the traditional taxi companies' way of doing business keeps drivers "trapped in a cycle of poverty." Uber takes 20 percent of what its drivers collect.

Both taxi companies and Uber hold out the promise of good wages. On its website, Mears advertises that drivers could make $700 to $1,200 a week, which translates on the high end to as much as $62,400 annually. Uber's ads say drivers in Orlando could make $60,000 a year.

The reality could be much different, with lower pay for those who don't spend far more than 40 hours a week behind the wheel. Salary.com reports the median salary of an Orlando taxi driver is about $31,000.

Mears said losing drivers to Uber would hurt the company "badly," at least initially. But UberX drivers are using their personal cars, he said, and they aren't factoring in wear and tear on vehicles driven so much they'll need frequent oil changes, new tires and costly repairs.

"Under Uber's model, they're theoretically putting tens of thousands of miles on their vehicle, so at some point their transmission is going to go out, and they're going to have that cost," Mears Vice President Roger Chapin said.

Vehicle upkeep is such a big part of the taxi business that Mears' plans for its new headquarters included a 53,500-square-foot maintenance garage, in addition to a two-story, 56,600-square-foot administration building; a fuel station; vacuum bays; a carwash; and parking for its fleet of vehicles.

Construction is stopping because company officials don't know how much business they'll lose to Uber. With fewer taxis, the company may need a smaller garage, less office space, less parking.

Mears is also fighting back, recently updating its own smartphone app to better compete with Uber. And the company commissioned a survey that concluded that Uber would not serve as many as half of the people in the Florida cities where it operates -- Orlando, Tampa, Miami and Jacksonville -- because they don't have both a smartphone and a credit card.

Even so, an Uber driver predicted so-called ridesharing companies are here to stay. Passengers prefer the clean, late-model cars that arrive when they open their Uber app, he said.

"Every person who gets in my Prius complains about the taxis: They wait forever to get picked up; they're unsanitary; the credit-card machines mysteriously don't work," said a driver who asked to remain anonymous because he signed a confidentiality agreement with Uber.

How it shakes out hinges on whether City Hall changes its regulations -- and whether companies such as Uber and Lyft follow them.

For taxi and limousine companies, it comes down to the cost of doing business. Mears and the rest don't want to pay the cost of the city's regulations -- permitting costs, commercial insurance, airport fees -- if Uber doesn't have to pay, too.

"What we advocate is not that Uber go away, but that all of us play on the same field," Mears said. "Our industry pays the airport $10 million a year in commercial-lane fees. Uber pays nothing. You have to ask yourself: Where is that money going to come from? But I'll tell you one thing: If Uber isn't going to pay it, we're not going to pay it."

[email protected], 407-420-5417 or Twitter @MarkSchlueb

___

(c)2014 The Orlando Sentinel (Orlando, Fla.)

Visit The Orlando Sentinel (Orlando, Fla.) at www.OrlandoSentinel.com

Distributed by MCT Information Services