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Walker could never imagine driving a taxi. Neither could Kwame, an UberX (Uber's lower-cost option) driver from Douglasville who started using his personal vehicle to pick up passengers three weeks ago. He's already considering buying another car to grow his own personal fleet and moving inside the Perimeter to be closer to customer demand.
"This is the way forward," he says. "Uber, Uber, Uber."
Of the rideshare startups, Uber was first in Atlanta, arriving in mid-2012. UberX arrived in September. Last August, Lyft began linking drivers and passengers in Atlanta. The company's business model is based more on the so-called "sharing economy" where there are no fares, only "donations." And yes, you can give the person who just took you home from the bar no cash.
Uber and Lyft contend that they're not transportation companies — they merely connect people with licensed commercial transportation providers or people with an open seat. The San Francisco-based companies are hybrid travel agents/taxicab services. Uber doesn't own any cars used by drivers, which the company considers independent contractors. Both companies skim a 20 percent commission off total fares. On an average night, one driver says, a dedicated Uber partner could make $120 in Atlanta. On New Year's Eve, it could be as high as $600. Drivers set their own hours and keep 80 percent of the total fares, which are all handled via the app.
For a passenger, Uber's setup is simple, sleek, and jibes nicely with the lives of tech-savvy twenty- and thirtysomethings. Uber's reliability and perceived exclusivity are big parts of its appeal. Download an app, upload a photo, enter your credit card information, and with the press of a button, you can get a ride. Uber's rates are calculated from a base fare plus distance and time. When business picks up, it also factors in something taxis cannot: demand.
When demand is high, so are estimated fares, as some passengers famously discovered when they were charged hundreds of dollars on New Year's Eve. Uber says the so-called surge pricing ensures cars are always available. If you want to be picked up pronto at the same time as other people, you'll have to pay a premium for it. That's in contrast to Atlanta's taxis, which by law can only charge a set amount. Passengers will wait when it's busy, but they will pay a set rate.
While neither Lyft nor Uber would release specific details on how the businesses have fared in metro Atlanta, "In the past few months alone, tens of thousands of Atlanta residents and visitors have used Uber," company spokeswoman Nairi Hourdajian says. Anecdotally, things have been good. Walker says she's referred as many as nine people to sign up as Lyft drivers. Open up either app at any time and you'll see a car available.
For Atlanta's taxi industry, the infusion of new, unregulated vehicles was a shock. The path to becoming an Atlanta taxi driver is not an easy one. Men and women who want to drive cabs must pay a $75 application fee and $20 for fingerprints and a background check to be approved for a permit. They must also complete an annual daylong training session that includes a review of the city's taxi ordinance. On top of that, they must already be partnered with a city-recognized taxicab company that owns a Certificate of Public Necessity and Convenience, or what's commonly known as a medallion. Basically, a license to operate a taxi.
The city has created 1,600 medallions, nearly all of which have been sold. The city possesses the final 46 and plans to hold them because it considers there to be an overabundance of taxis in Atlanta. You're more than welcome to buy one on the open market. The current going rate is around $65,000, a steep price, albeit a fraction of what you'd pay in New York City where they can run closer to $1 million. Most people lease the medallions, which, depending on what type of company they choose to work for, can cost as much as $775 a month. Full-service companies, which provide and maintain the vehicle, can charge as much as $600 a week.
Cab drivers are required to get their fingerprints checked every year. Vehicles must be inspected twice annually. After expenses, Hewatt says his "worst driver can make $40,000 a year." According to a 2012 Atlanta taxi industry study commissioned by Central Atlanta Progress, drivers that lease their vehicles from taxi companies can earn more $30,600. Drivers who focus only on the airport can earn $16,000.
While Uber's town car service is restricted to licensed limo drivers with commercial insurance, potential UberX and Lyft drivers have it relatively easy. They must submit to in-person interviews as well as background checks, which are handled by a private firm, however, not the police. Insurance is verified by the companies, they say. But the taxicab and limo company owners of the world, who are watching some of their drivers and revenue jump to Uber and Lyft (and in some cases, not come back), are skeptical, as there's no independent oversight.
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