How Public Employees Could Power the Struggling Taxi Industry

In what some say is a first in the world, D.C.'s latest venture gives taxi drivers new business and simultaneously cuts its own costs.

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(David Kidd)
As a program analyst for the city administrator’s office in the District of Columbia, Alexandra Caceres works with many agencies and often travels across the congested city for meetings. Every time she does, she has to reserve one of the two vehicles owned by her agency or, if those are being used, reserve a car from the city’s shared fleet. In either case, she has to schedule how long she’ll need the car, pick it up, drive to her destination and face the frustrating search for an elusive parking spot.

Well, that’s how she used to do it.

In June, D.C. launched a new transportation program that makes it much easier for city employees to get around for work. Now, Caceres uses a smartphone app to contact a taxi participating in the city’s “Vehicles on Demand” pilot. Within five to 10 minutes usually, a driver picks her up, checks her employee ID and takes her to her destination. 

“It cuts the transportation time almost in half,” she says. “It’s quicker and easier all around.” 

Matthew Daus, president of the International Association of Transportation Regulators and a former taxi commissioner for New York City, says he knows of no other city in the world that has started something similar. 

The program is also a boon to the taxi industry, which has been suffering in cities across the country since ride-sharing companies like Uber and Lyft appeared on the scene and took a lot of their business. More than 150 taxi drivers have signed up to transport D.C.’s public servants.

“The idea that a government employee could hail a for-hire vehicle from their phone seems like a no-brainer, but it’s a huge leap forward for local government,” says Christopher Shorter, director of the D.C. Department of Public Works (DPW), which launched the program in collaboration with the D.C. Department of For-Hire Vehicles (DFHV).

So far, this isn’t just saving time for employees – it’s saving money for the city. 

The cost of using an agency-owned car -- based on acquisition costs, parking, fuel and maintenance -- boils down to $3.18 per mile, according to DPW. The city’s fleet-share program is even more expensive, at $4.52 a mile.

But the cost of the Vehicles on Demand program comes in around $2.16 per mile. That’s more than 30 to 50 percent in savings. 

Tips aren’t permitted, but drivers do get a $2 bonus per trip to make up for the loss of those extra dollars. The average fare so far is $17, compared to $15 for taxi rides to the general public, according to the DFHV. 

The pilot program is still under evaluation, so the impact on taxi drivers has not been calculated, but Ernest Chrappah, director of the DFHV, which regulates taxi drivers and other for-hire drivers, says “the revenue is going up for everyone.”

The pilot program is currently being tested with 15 of the city’s 78 agencies through Sept. 30. If it expands citywide, it’s expected to reduce the city’s fleet size.

“Generally, we’re not going to immediately take sedans from government agencies,” says Shorter, “but in time, there will be more reliance on this kind of program and method of travel.”

A smaller fleet would also reduce the need for garage and parking lot space, he says.

To Daus, New York’s former taxi commissioner, D.C.’s program is innovative not just because it may be a first of its kind but also because it provides solutions to several widely recognized problems.

“A lot of mayors are looking at ways to help the taxi industry, provide good safe service and save the government money,” he says.

So, will other cities follow D.C.’s lead? Daus believes so. 

 “It’s brand new, innovative and a great idea,” he says. “Doing something like this is appropriate and makes sense.”

*This has been updated to clarify the role of the D.C. Department of For-Hire Vehicles.

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Caroline Cournoyer is GOVERNING's senior web editor.
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