sfgate.com | Dec 13th 2012
While smartphone ride-sharing services like Uber, Lyft and SideCar have grabbed the spotlight running up against state regulations and cabdriver opposition, one local cab app startup called Cabulous has quietly built alliances with taxi drivers.
On Thursday, the San Francisco company is renaming itself Flywheel and releasing a revamped smartphone app as part of a new marketing push to grab some of that spotlight.
Chief Executive Officer Steve Humphreys believes Flywheel has a smoother path ahead because it doesn't face the same regulatory hurdles as Uber, Lyft and SideCar.
"We're part of the fleet infrastructure; we work completely within the regulatory framework," Humphreys said. "I don't know if you need to break the laws in order to provide a service."
Uber, SideCar and Zimride, which offers a service named Lyft, have all been hit with $20,000 fines by the state Public Utilities Commission, which contends they have violated regulations that govern taxis, limos and other commercial "charter-party carriers."
But the tech companies are appealing the fines, saying they believe they are complying with current regulations that are too outdated to keep up with the latest innovations.
Indeed, the PUC is set to open a six-month review process to determine how these new technologies can be accommodated while still protecting the safety of riders and drivers.
It's an issue that has been debated in other cities. Last week, the City Council in Washington, D.C., approved legislation that allows Uber and other smartphone transportation services to continue operating.
Meanwhile, cab drivers have complained that these services are taking money out of their pockets. Uber, SideCar and Zimride offer different services, but each uses a smartphone app that locates and arranges for on-demand rides, either from a participating cab or limo driver or a noncommercial driver's private vehicle.
Two-year-old Flywheel, meanwhile, has gone a different route, securing deals with taxi companies that operate about 2,000 cabs in several cities across the country, including about one-third of the cab fleet in San Francisco.
Flywheel's other cities include San Diego, Miami, Houston, San Antonio, Seattle and Cleveland. The service, which has about 50,000 active users, has also expanded to Barcelona, Spain.
"The fleets are actually very pragmatic business people," Humphreys said. "We haven't found any resistance when we give them a good economic value proposition. We're rolling out as fast as we can."
San Francisco cab driver Mark Gruberg said the app is bringing him about four new fares per shift.
Gruberg, a co-founder of SF Green Cab, is an outspoken critic of Uber, SideCar and Lyft, which he said have "been so disdainful of the regulatory process that they've gotten a lot of press. It's free publicity when people write a lot of articles about how those disruptive companies are changing the industry."
Yet, startups like Flywheel, Taxi Magic, GetTaxi or Hailo that "play by the rules" receive hardly any publicity, Gruberg said.
"The taxi industry itself has been remiss in getting the word out that we're doing the same things," he said.
Flywheel's service lets riders summon the nearest participating cab, no matter which company operates it, and shows on a map that's refreshed every six seconds the taxi's progress toward the passenger's location.
In each cab, Flywheel places a GPS-enabled Android phone that has an app the driver uses to answer the hail and locate the passenger, who pays the fare and a tip through a pre-registered credit card.
Flywheel charges an extra 60-cent fee for booking the ride, while the driver keeps the rest of the regular fare.
Humphreys said he doesn't consider Uber, Lyft and SideCar competitors. Even with that small booking fee, he said, Flywheel can prosper by "getting a good chunk" of the 4.5 million cab rides that are booked every day throughout the country.
"And I think the market is going to expand," he said.