Digital apps driving Toronto's taxicab industry forward
A Beck cab drives along King Street near Sherbourne Street on Friday Dec. 28, 2012. (Maurice Cacho / CTV News)
Published Saturday, December 29, 2012 7:00AM EST
Toronto streets are dotted with the mixed hues of taxicabs, from the green and orange of Beck Taxis to non-descript Royal cabs.
These cars circulate the city, making more than 60,000 trips a day for an industry that generates more than a $1 billion a year. But despite being a vibrant industry, its practices remain archaic.
For the first time in years, the Toronto taxicab industry is moving to digitize its current system for a safer, more efficient future. With the launch of digital apps and the City of Toronto finally taking notice of changes, the taxicab industry is getting a much-needed push to improve things for both drivers and passengers.
“Historically I don’t think the taxicab industry has thought much about customers and making it reliable, safe and easy,” said Andrew Macdonald, general manager at Uber Canada, a company that launched an app that lets consumers get a taxi on demand right from their smartphone.
Macdonald says consumer complaints are vast, ranging from reliability to vehicle maintenance. Issues include difficulty getting a cab during peak hours, destination discriminationand even drivers refusing to accept credit card payments.
These are issues that Macdonald said could be resolved since digital app companies such as Uber focus on the customer experience.
The last formal review of the taxicab industry came in 1998. The review documented consumer complaints such as dirty cabs and unprofessional drivers. A Taxicab Advisory Committee was created as a result of this review but only lasted until 2003, said Bruce Robertson, director of licensing services for the City of Toronto.
Robertson says the committee “wasn’t working well” and although staff put forward suggested changes, the report to the Mayor’s office “never came back out.”
This past September, the city conducted its first unofficial review of the cab industry in 13 years. According to Robertson, the resulting discussion paper came from an industry staff viewpoint rather than consumer viewpoint.
“From a consumer perspective, there aren’t a lot of problems,” said Robertson, adding that consumers are quite happy with the industry right now.
The discussion paper revealed two key issues for consumers: the number of taxicabs on Toronto streets and accessibility.
The paper also found the general consensus amongst the industry is that there are too many taxicabs operating in the city, while others in the industry say they believe there are not enough.
David Boriss, general manager of operations at Hailo Toronto, said that about 50 per cent of the time, cabs in Toronto are cruising the streets looking for a hail or they are waiting to be dispatched.
Even the city’s discussion paper recognized this problem: “When you hail a cab, it is likely that the driver of the taxicab has been circulating throughout the city looking to pick up a passenger.”
Hailo, a company similar to Uber, launched an app to connect passengers to these empty vehicles. The free app allows customers to find the eight closest cabs to their location without using a dispatcher. They can request a cab on demand, know its exact location and how long it will take to get there.
When the cab arrives, a notification is sent to the customer. Customers can even preauthorize payments so no money or cards have to be exchanged.
Hailo was the first technology company in the city using an app-based connection service to be licensed by the City of Toronto’s Municipal Licensing and Services.
It’s what sets Hailo apart from, Uber, which is facing municipal licensing charges from the City of Toronto for not having the proper licence to dispatch cabs. While Uber claims it is a technology-based company and not a dispatcher, the City went forward with charges saying Uber must have a business licence to operate.
Hailo already has approximately 600 cab drivers attached to its service, and expects thousands more. While many of these drivers still use a dispatcher such as Beck, Hailo president Justin Raymond says this service helps to supplement a driver’s income.
“The taxicab industry is one of the last bastions of true inefficiency. It is archaic. What Hailo does is eliminate these inefficiencies and lack of accessibility for passengers,” said Raymond. “There are no longer these 10 to 15 minute waits, it’s more like two to three minutes to get a cab.”
Cab companies compete
Traditional dispatchers are not far behind either. Beck was the first dispatcher in Toronto to launch a complimentary app. Its digital offering, unlike Hailo or Uber that allows drivers to work on their own, sends the information back to the dispatcher.
Consumers fill out an online form rather than make a phone call to Beck. The dispatcher then collects the information sent through the app and sends it out via radio to drivers.
“Everything we do is to make sure drivers know we’re working for them. We want to be on top of new technology, so drivers get a better return on the job they are doing,” said Kristine Hubbard, operations manager for Beck Taxis.
Hubbard said one of the main reasons they still operate with a dispatcher is to facilitate better customer service. The best customer experience occurs when a dispatcher is able to understand what the consumer wants before sending out a driver, she said.
“Customer and driver- that’s what we are here for. We facilitate the relationship. Any detail we need we want to do that on behalf of the driver,” said Hubbard.
But it’s these differences in how the industry should be run that’s still hindering the customer experience. Roberston said these new digital apps are “causing a lot of internal turmoil within pockets of the industry.”
The City of Toronto will present a more formal report after the creation of a new Taxicab Advisory Committee. The TAC is expected to be up and running by January 2013. While it won’t include city councilors, it will consist of eight to 12 members of the public, stakeholders and cab drivers who will meet several times a year.
“It’s a hard industry to adhere to have one voice,” said Robertson. The committee won’t be a decision-making body but rather an advisory committee. It won’t have a huge impact on the consumers, Robertson said, but it will give the industry a voice to find out what the legitimate concerns are.
This sudden rise in competition between digital apps and traditional dispatchers, however, is helping to make the industry better.
Macdonald said the digital competition is shining a light on what the industry could look like in five or so years. It’s an industry that will continue to grow if service becomes more reliable.
Hubbard said she is wary of how consumers will respond to the sudden onset of so many different companies. If a cab driver is using both a dispatcher and an app, she believes it will be confusing to consumers as to which company to send feedback to – the company behind the cab, or the app they used to get the ride.
But digital apps offer real-time feedback. Hailo constantly monitors its feedback as both drivers and customers are required to rate each other at the end of the trip. If a trip is rated at two or three stars, it is immediately flagged and either the driver is called or an email is sent out to the customer.
“We believe in open communication. We think you can have a much more productive conversation one on one rather than in the twittersphere. When we say get it offline, instead we turn it into an email conversation,” said Raymond.
But regardless of the new digital era sweeping over the traditional cab industry, it will be a while before the street hail is completely eliminated by the virtual hail.
As Hubbard points out, if you’re standing at a busy intersection like Yonge and Bloor, it’s unlikely you’ll use an app to hail a cab.
Instead, these apps are designed to allow consumers the ease and comfort of ordering a cab from indoors, a safety feature for passengers, particularly late at night, said Raymond.
While no formal numbers exist for number of street hails versus calls, Raymond said anecdotal evidence still suggests a 50-50 split.
For passengers, the real testament to improved efficiency will hit during the holiday season. Raymond said Hailo has eliminated these wait times.
“Even during the holiday season, you’re getting a cab within five minutes using Hailo,” said Raymond.