From: San Francisco Chronicle
To calculate fares, taxis have long relied on meters — clunky and expensive devices that are prone to breakdowns. They are a hulking analog reminder on every dashboard of a difference between taxis and their new tech-focused competitors.
Flywheel, the San Francisco startup that has tried to help taxis keep up with an e-hailing app, now has devised a 21st century alternative to the meter: a cloud-based system for calculating fares and handling payment, navigation, dispatch, entertainment and advertising. It all runs on an Android phone with a credit-card reader attached.
On Tuesday Flywheel said that California regulators have approved the technology, called TaxiOS, for statewide use. The thumbs-up from the Division of Measurement Standards follow a two-month pilot of TaxiOS in about 50 cabs in San Francisco run by Flywheel Taxi, a cab company so enamored with Flywheel’s app that it adopted its name.
“TaxiOS is more reliable, smarter and can be updated to add new features quickly,” said Hansu Kim, owner of Flywheel Taxi. In February he re-branded DeSoto Cab, San Francisco’s oldest taxi company, as bright-red Flywheel Taxis to underscore their affiliation with the Flywheel e-hailing app. “When I look at the traditional taxi meter equipment, I see cobwebs and hear crickets.”
Taxis have seen their business ravaged by upstart rivals Uber and Lyft, whose smartphone hailing and cashless payment appeal to consumers. Taxi drivers complain that looser regulations have created an unequal playing field for the new competition.
“In one fell swoop, we are modernizing the taxi industry and bringing it on par with everything the on-demand cars have,” said Flywheel CEO Rakesh Mathur.
TaxiOS will enable several features to rival those of Uber and Lyft, he said.
• Ride splitting: TaxiOS will allow unrelated passengers picked up at different times to split a fare, similar to UberPool and Lyft Line.
• Dynamic pricing: Taxi prices are regulated and cannot rise above the set rates — or surge, in Uber parlance. However, taxis are free to reduce prices to lure passengers.
• Last-mile deliveries: Rakesh said some San Francisco taxis are already delivering products for e-commerce companies. Such mobile logistics are considered key to Uber’s future. In San Francisco and a few other cities, for instance, Uber now offers UberRush for package delivery and UberEats for lunch deliveries.
• Seamless payments: Riders can pay with cash, credit cards or credit cards stored in the Flywheel app.
• Navigation: Google Maps and GPS are built into TaxiOS.
On the driver and cab company side, other advantages include quicker hand-offs of cabs between drivers, and the ability for drivers to work shorter hours, Mathur said.
“We can do a split meter system, where drivers no longer pay a lease for the vehicle, but pay a percentage of each transaction,” Kim said. Typically cab drivers pay a daily gate of over $100 to lease a medallioned vehicle for up to 12 hours, meaning they have to put in many hours behind the wheel to cover that rent and then turn a profit. Having drivers instead pay a percentage of fares to the cab company is the same economic model used by Uber and Lyft, which rely on citizen drivers in their own cars.
Kim said TaxiOS’s GPS system also improved the e-hailing experience for passengers. Traditional taxi data refreshes cab locations every 15 to 20 seconds, while the smartphone has a 6-second or faster refresh rate. That means passengers awaiting a cab they’ve summoned will see better real-time updates of how close it is, he said.
TaxiOS maintains cabs’ ability to be summoned via street hails and telephone calls, as well as through an app.
Flywheel provides the new systems for free and makes money by collecting a percentage of each transaction processed, “the same industry-standard 3.5 to 5 percent as Verifone,” said Mathur. It also charges a monthly fee for phone calls dispatched through the software. (Verifone, based in San Jose, processes electronic payments through point-of-sale devices at stores, gas stations, hotels, doctor’s offices and a range of other industries.)
Flywheel Taxi is now converting all 240 vehicles in its fleet to TaxiOS, Kim said. While so far that is the only announced deal, Mathur hopes that California’s approval eventually will lead to all 40,000 cabs in state running TaxiOS.
The Flywheel app is now in more than 80 percent of the cabs in San Francisco, Flywheel said. It hasn’t given statewide figures but says it has good adoption rates in Los Angeles, San Diego and Sacramento. Curb, formerly called Taxi Magic, is another e-hailing app for cab drivers that’s widely used in California and nationwide.
“TaxiOS opens up all sorts of new opportunities which taxis never had before,” Mathur said. “We are replacing a complex, expensive chain of components with a simple, streamlined device.”