Rideshare vs. Taxicabs: The inside story

June 5, 2014

(WBEZ/Odette Yousef)
Saied Sarvinehbaghi has driven cabs on and off for 35 years in Chicago. He says the expense of maintaining his medallion – plus business lost to ridesharing competition – may soon drive him out of the business.

The best taxi drivers get to know hotel doormen.

“How you been, John? Everything good?!” shouted Saied Sarvinehbaghi out his window as he pulled to the front of the Hilton cab line on a recent morning. “You want me to stay here or back up? Stay here? OK. Airport would be nice, John,” Sarvinehbaghi chuckled.

A ride from the Loop to O’Hare could bring in more than $40 for a single fare. Chicago’s airports are one of the few places left in the city where taxicabs still rule the road. But elsewhere, the competition for fares is growing fiercer by the day.

Chicago recently passed rules to legalize ridesharing services, which let people use their personal cars to take paying passengers around. The debate over ridesharing has mostly centered on how the service differs from traditional taxis. So WBEZ spent a day with a cabbie, and a night with a rideshare driver to find out for ourselves.

The taxicab driver

Sarvinehbaghi started driving 35 years ago, soon after he came to the U.S. from Iran for college. At the time, he thought he’d only be driving cabs for a couple of years. As a passenger climbs into the backseat and directs him to O’Hare, Sarvinehbaghi reflects on why he’s stayed so long in the industry.

“This job is good to me because it’s exciting, because it’s not a boring job,” Sarvinehbaghi said. “It’s a very addictive job, actually. You get addicted to this job. If you get addicted, it’s hard to let go.”

Sarvinehbaghi is not your typical cabbie – he owns his medallion, which is a city license for a cab. He’s had it for about 15 years.

“I didn’t buy it,” he explained. “We had a great mayor called Harold Washington, and he’s the one who started giving medallions out instead of selling them, so I was one of guys who won it (in a lottery).”

Most taxi drivers don’t own medallions, and in recent years, they’ve gotten harder to buy. At times, medallions have sold for as much as $360 thousand. The majority of cabbies lease their cars, with the medallions attached, for $400 to $700 a week.

Sarvinehbaghi is glad he doesn’t pay a lease, but he said he still has expenses. According to city rules, he has to buy a new car every four years and pay for expensive taxi insurance. Despite all that he says he got by just fine until the road recently became more crowded with rideshare drivers.

The rideshare driver

At about the same time Saied usually ends his shift on a Saturday evening, Dan Burgess is driving into the city from his home in Downers Grove. Burgess, who introduces himself to passengers as “Trivia Dan,” has done this most weekends for the past year. He drives for ridesharing services UberX, Lyft and Sidecar.

“I like meeting people,” he explained. “I love the city and the pulse of the metropolis, and I enjoy driving people around and getting paid for it and having a good time. And I thought it would be a fun way to expose people to me and my trivia company and ask them trivia questions on the rides.”

Burgess receives ride requests through his smartphone. Almost as soon as his first carload of Lyft passengers – three young women going out for a dinner in Lakeview – squeeze into his back seat, he peppers them with trivia questions.

“Well, if you guys want to play trivia, I’ve got trivia questions ready…”

As Burgess ferries passengers around the city in his 2005 silver Hyundai hatchback, the same scene repeats itself all night.

When asked, passengers said they prefer ridesharing to cabs because of the convenience. They use their smartphones to summon cars without ever going outside, and there’s no hassle with cash or credit cards – the apps take care of the payment. When the ladies arrive at their destination, they just hop out.

“Alright, so, I just got a text already saying that was ‘50% Prime Time,’” Burgess said as the passengers exited. “Lyft has a promotion going on tonight, so I got time-and-a-half on that.”

Lyft and Uber frequently raise their rates at times of peak demand, or simply to entice drivers to use their app rather than the competition’s. Cabs, by contrast, can’t change the meter rate.

Different rules of the road

After roughly six hours with both Burgess and Sarvinehbaghi, it was clear that the essence of what they do is the same: they drive people places for money. So should they follow the same rules? Dan said ‘no.’

“This is a casual experience,” he said. “I might go a month without giving a ride. Nobody has a cab that sits for a month without being used. So why should I fall under the same strict rules as a real cab when I might only give five or ten hours a week, or sometimes even five or ten hours a month?”

“There’s rules and regulation,” counters Sarvinehbaghi. “It says if you want to transport people in the City of Chicago, you have to be registered, you have to have a medallion, you have to pay the fees and taxes, and have some kind of chauffeurs license, so they know who you are.”

Sarvinehbaghi said to get his chauffeurs license, he had to take a class; pass an English exam, a physical, an eye test, and a background check; and have a clean driving record. Uber, Lyft and Sidecar say they perform background and driving record checks, too. But several news outlets have reported cases of rideshare drivers with criminal histories.

“It’s about protecting the consumer in Chicago. People’s life is in our hand,” Sarvinehbaghi said. “I used to work night shift on the weekends, you won’t believe how many drunk people I take home, they pass out in the back seat. Young girls, older guys with Rolex (watches), girls with short skirt and practically no clothes on, and I take them where they want to go and I call their parents down and take them.”

But Burgess said ridesharing services weed out bad drivers faster than the city does, because the apps require passengers to rate their drivers after each ride.

“It’s actually more safe because of the rating system,” argued Burgess. “If there’s a problem, you can call support and report a driver, saying I was driving erratically or dangerously or I was under the influence or something. Lyft would turn off my account immediately.”

The cost of doing business

The other big difference between Sarvinehbaghi and Burgess involved their expenses. WIth frustration, Sarvinehbaghi pointed out that his 2014 Toyota RAV4 was only four months old. He bought it with a five-year payment plan, but the city will only allow it to be used as a cab for four years. He said that means in the fifth year, he’ll have to continue paying for it, but he won’t be able to use it as a taxi. In fact, he’d have to buy another new car to use as a cab,saddling him with two monthly car payments.

“This car, $33,000, I paid it. I’m paying the car payment,” he said. “I’m paying almost $600 a month (for) insurance...stickers, fees, taxes, gas – you add all this up, it’s costing me money to keep this medallion. You know, I work so hard, paying all these fees, and [rideshare drivers] come and do it without paying any fees or anything.”

After expenses, Sarvinehbaghi made roughly $11 an hour during the shift I observed.

Burgess has it easier. He uses his nine-year old car, which he paid off long ago. Unlike Sarvinehbaghi he is not required to pay for commercial liability insurance. Burgess just needs to cover gas, and pay Uber 15 percent of his earnings.

During my night shift with Burgess he made about $14 an hour after expenses.

He acknowledged that rideshare vehicles have been hard on independent medallion owners.

“I really feel bad for some independent cab owner who spent $300,000 on a medallion, yeah, I feel sorry for that guy,” he said. “That’s unfortunate, he made that investment. But it’s a new day, and people like getting around this way more than that way.”

Indeed, ride sharing’s growing popularity is one reason Chicago’s city council decided to legalize the service. Illinois may soon follow suit statewide. Sarvinehbaghi said he had planned to pay his sons’ college tuitions by selling his medallion, but now it’s likely to lose much of its value.

Still, he said if the state allows ridesharing, he may sell his cab and try it, too.

Odette Yousef is WBEZ’s North Side Bureau reporter. Follow her @oyousef and @WBEZoutloud.