Friday, May 15, 2015

The Uber Effect: Long Beach Allows Taxis to Charge Lower Fares

Long Beach officials loosened restrictions on local taxi fares Tuesday, a move aimed at keeping cabs competitive with the flexible pricing models of ride-hailing services like Uber and Lyft, reports The LA Times.

At its meeting in downtown Long Beach on Tuesday evening, the City Council voted, 9-0, to allow Long Beach Yellow Cab, which holds the city’s exclusive franchise agreement, to charge passengers less than the metered fare. The company will now be able to offer discounted rates and free rides. Uber has been destroying the government created taxi cartel. L.A.’s nine licensed cab companies reported a 21% drop in trips in the first half of 2014 compared with the same period the previous year, the steepest decline on record.

The vote makes Long Beach the first major U.S. city to eliminate the price floor that prevents taxi drivers from providing free or discounted rides.

“Taxicabs have had no opportunity to experiment and fail, or experiment and succeed,” said William Rouse, the general manager of Long Beach Yellow Cab Cooperative Inc. “Most people know it’s illegal for drivers to charge more than the meter, but it’s just as illegal to charge less than the meter. For a long, long time, we’ve known there’s been a need to address this imbalance.”


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