Taxis look to apps, Uber-style, to save the cab

Taxi ridership has been in steady decline since Uber and Lyft launched in Boston in 2012.
Taxi ridership has been in steady decline since Uber and Lyft launched in Boston in 2012.

Uber is making waves, and the taxi industry is taking on water.

As lawmakers on Beacon Hill continue to debate whether ride hailing companies should be held to similar regulatory standards as their old-school, medallion-holding competitors, a record number of Lyft, Fasten, and Uber drivers are working the Boston streets, poised to respond within moments to a user’s digital request for transport.

So how can a taxi compete? Two companies that together supply all the credit card processing systems in Boston cabs, Creative Mobile Technologies and VeriFone Taxi Systems, over the next few weeks will both be rolling out their own Uber-esque apps in the Boston marketplace in an effort to modernize how riders order up, and pay for, a taxi cab.

“What the ridesharing services have taught everybody is that people like the convenience of pushing a button and watching their car arrive,” said Jason Gross the global head of product and marketing for VeriFone Taxi Systems, which acquired the taxi-hailing app Curb in October.

Today, taxi companies in 60 cities nationwide, including Cambridge and Newton, use Curb to process payments and receive pickup requests. The app works by linking with the transponders taxi drivers already use to receive requests for pickup. With the transponder handling demand, the app also links to the taxi’s credit card reader to process payment. VeriFone systems are installed in about one-third of Boston taxis, though the Curb app works with other manufacturers’ systems as well.

On Wednesday, the app will expand into Boston proper, when 400 Metro Cab taxis will begin using the service.

Gross said that over the next few months Curb will be available for use by three additional Boston cab services, Top Cab, City Cab, and the Independent Taxi Owners Association, bringing the number of taxis in the Curb network up to about 1,200 cabs that process payments using both VeriFone and CMT.

Not to be overshadowed, CMT’s taxi-hailing app Arro, Curb’s competitor in cities such as Chicago and New York, is also launching in Boston in coming months. Arro founder Michael Epley said the app has been in “soft launch” in Boston for a number of months and will eventually serve an estimated 1,200 taxis. 

CMT’s payment system is in the remaining two-thirds of all Boston cabs. The Arro app can only hail taxis in which CMT payment processing systems are installed.

Both apps charge a small fee to use the service, and neither has surge pricing.

Some taxi drivers, taxi advocates, and medallion owners are embracing the taxi-hailing apps for their potential to bring in new customers, but say the taxi industry will continue to suffer as long as ride-sharing companies continue to operate in the city unregulated.

“It’s better than nothing, but it’s not the answer,” said Donna Blythe-Shaw, a representative from the Boston Taxi Drivers Association, an advocacy group for drivers. “Anything that brings 21st century technology into the taxi industry is going to help, but it’s not going to change the dynamics that’s going on right now in the industry,”

Blythe-Shaw sits on the Mayor’s Taxi Advisory Committee, an appointed body that will make recommendations on ride-sharing regulations. She said the committee was not consulted about the apps’ launches in Boston.

Despite the fact that taxis and ride-hailing companies provide essentially identical services, the taxi industry is highly regulated. Taxi drivers must obtain one of 1,825  licensing medallions — at a going rate of up to $700,000 — to drive within city limits. Taxi drivers are also required to submit to in-depth background checks and fingerprinting, measures that Uber is fighting.

Larry Miester, a representative from the Independent Taxi Owners Association, which has signed on to use Curb, said the app could help chip away at Uber’s ride-hailing dominance by giving taxi drivers the tools to complete in an industry forever changed by technology.

“We have a different competition than we’ve never had before,” he said. “We do want to compete, we do want to improve customer service, and we’re open to any type of platform.”

But John Ford, a medallion-owner from Top Cab Dispatch, said the apps won’t get to the root of what’s killing incomes for taxi drivers in Boston.

“We think that it’s a pretty progressive app. We have no problem with new technology, we only want a level playing field with everyone held to the same regulations,” Ford said.

Globe correspondent Amanda Burke can be reached at amanda.burke@globe.com.
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