Secret recording shows Uber's efforts to poach Chicago cabbies

April 24, 2014

AP/File
A Lyft car in California. Many cab drivers are leaving the taxi industry to drive for ridesharing companies, such as Lyft. Uber, another company, has aggressively marketed itself as a better option for drivers than the taxi industry.

For years, Chicago has struggled to recruit enough taxi drivers for the city. New competition from ridesharing companies is making that even harder. As the city looks to regulate those companies, it also seems to have abandoned its past policy of ensuring a robust corps of cabbies. Now, a secret audio recording reveals a newly aggressive push by the industry to persuade cabbies to become rideshare drivers.

WBEZ obtained the recording from a cab driver who attended a February information session at Uber offices in Chicago. The session was specifically to recruit taxi drivers to the company’s popular ridesharing platform, called uberX.  In it, an Uber representative pitches a room full of cabbies on the idea of dropping their cabs.

“As Uber grows – this is why we’re here today, is to teach you guys about the option that I think, quite frankly, is a little bit better for you guys in terms of your life and the cost,” he told them.

UberX drivers get fewer fares than taxi drivers, but the company representative played up the advantages of switching from cab-driving to rideshare-driving. First, cab drivers wouldn’t have to pay a weekly lease to use their vehicle anymore, because they’d be able to use their personal cars. Taxi leases run anywhere from $400 to $700 a week.

Second, drivers could cash in on “surge pricing” – that’s a term Uber uses for times of peak demand. The company hikes its fares during rush hour and when the weather’s bad, sometimes charging up to seven times their normal rates. The representative told cab drivers in that session that if they got one taste of surge fares, they’d want more.

“It seems difficult to not drive a taxi in rush hour when you guys are taking a fare to the Loop – but just try uberX,” he urged them, “and you’ll see that it might take a couple minutes longer to get that fare, but that fare will be at an increased rate.”

WBEZ spoke with several taxi companies that say they are losing drivers to ridesharing. The question is, are fewer taxis good for the city?

The mayor’s office wouldn’t comment. Oddly, neither would the city’s department of Business Affairs and Consumer Protection, which regulates the taxi industry. A spokeswoman said they don’t care about driver numbers.

But they certainly did before. Last year, the department head was very vocal about a shortage of cab drivers.

“We’ve seen it dropping down over the past five or six years,” said former Commissioner Rosemary Krimbel, at a Taxi Driver Recruitment Fair that the city co-hosted at Olive Harvey College last year. Krimbel said the city was short 2,000 cab drivers. She called that a problem, and said it was the city’s job to fix it.

“I think there’s a solution,” she said, “And I hope to increase the number of drivers and support them.”

But now the city says it has no role in keeping enough taxis on the road. Some say that’s not a wise position for the city to take.

“I definitely think it’s very important for the tourism industry to have outstanding taxi service,” said Charles Goeldner, a professor emeritus of tourism and marketing at the University of Colorado. Goeldner literally wrote the textbook on tourism, called “Tourism: Principles, Practices, Philosophies.”

Goeldner said cities that are serious about tourism actively support their taxi industries. He says taxi drivers are ambassadors for the places where they drive. They offer visitors knowledge and predictability.

“There has to be a trust element,” he said, “and the taxi industry has always been regulated and licensed and has to meet certain requirements for cities.”

Uber claims it holds its ridesharing drivers to high safety standards. It also talks a lot about promoting consumer choice in transportation. But if cab drivers heed Uber’s call and switch to ridesharing – making rush hour commutes more expensive than ever – isn’t that bad for consumers?

“The goal is not to surge at rush hour,” said Andrew MacDonald, Uber’s Midwest Regional Director. “But the pitch to drivers is ‘Hey, right now we are undersupplied at rush hour, and so the opportunity is good to be on the Uber system.’”

MacDonald said as more people, cabbies or not, sign up to drive for uberX, prices won’t surge as much. That might push some cab drivers back into the taxi industry.
But for now, it might be harder than ever to get a taxi in the Loop during rush hour.

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