Uber and Lyft make threats to leave Minneapolis. Could taxis fill the gap in their wake?
Updated: 5:06 p.m.
Gov. Tim Walz wants parties to come together for a statewide solution that would prevent the loss of rideshare services in the city of Minneapolis, which recently passed an ordinance that would increase rates for drivers. Multiple rideshare bills are pending to address this issue in the Legislature, and a Minneapolis city council member will introduce a notice to reconsider the ordinance.
Meanwhile, the number of taxis licensed in the city of Minneapolis has dropped precipitously in this age of Uber and Lyft. The Star Tribune’s Dave Orrick has been looking into this and he shared more with MPR News host Tom Crann.
The following is a transcription of the audio heard using the player above, lightly edited for clarity.
The numbers are pretty stark. Give us the numbers in the last decade of taxis in Minneapolis versus today.
Orrick: It looks like the high watermark for the number of taxi cabs in Minneapolis was in 2015 when there were 1,385. Today, there are 14. I mean, it’s just a complete collapse, almost complete collapse.
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And I think it’s safe to say that that’s happened all over the place. It’s happened all over the country in anywhere but the largest American cities with the advent of Uber and Lyft.
A lot of the drivers who drove taxi cabs just started driving for rideshare services — is that fair to say?
Yeah, we’re pretty confident that that’s been the lion’s share of what happened — a lot of migration over. Initially, when Uber and Lyft came onto the scene, a lot of cab drivers appreciated the flexibility that they had.
Drivers for Uber and Lyft are, essentially, legally considered independent contractors. They’re just self-employed people. You can sign on to the app to make yourself available for a ride whenever you want and you can sign off whenever you want.
And back when these companies started, there was a great demand for the convenience of being able to order one of these rides from your phone. [So] these drivers could actually make quite a bit of money if they hustled because of the way the price structure and the amount of the fares they kept was structured.
What happened to the taxi companies and cabs?
A lot of the companies disappeared. There used to be 38 or 39 companies at its peak. Now, there are nine, which is a surprisingly high number.
You know, the Twin Cities always had a sort of diffuse cab industry. There were several really large companies but there were a lot of small companies that had just a few vehicles. Some were family owned but theoretically it can be scaled up very quickly.
How quickly could it be scaled up?
A driver who’s got all their paperwork in order can potentially file to get a cabbie license and walk out the same day at city hall with that license — and the same for his or her vehicle.
Now, exactly how that would work in practice, we really don’t know. Anecdotally, I’ve heard that there’s been some inquiries into city hall already from drivers who are interested in reactivating old cabbie licenses. But again, we’re gonna have to see it on a massive scale, if taxi cabs are going to replace Uber and Lyft.
As a reporter covering this, what are you watching for next?
I’m watching for everything. I mean, one of the big stories is a lot of companies — the list keeps growing every day — are coming in saying, ‘We’re going to replace Uber and Lyft. We offer similar app-based, ride-hailing services.’
And some of these companies are completely out of the blue, some are established in other cities, some have business models that are not taxi and not quite rideshare. And they plan on coming in without a license. We will see how that works with regulators in the city.
And let’s not forget, for those of us who want to get rides, the simplicity of the current system is that there are basically two apps to use. The cab companies didn’t really have good apps. That’s another reason for their failings. So, there’s a lot of cyber infrastructure that the public is going to have to deal with. Even if it can get scaled up and is reliable enough.
In the meantime, of course, there’s the regulatory, political side of it, which is that the state could come in and do something that, in short order, causes the companies not to leave or to return fairly quickly. That remains to be seen.