Uber has cut into local taxi drivers’ businesses to the point where some of them have had to become Uber drivers. Bob “Taxi Bob” Schumm, who has served Richmond students, faculty and staff for more than ten years, felt this change firsthand when he was forced to join Uber.
Schumm has had a relationship with the campus since 2004 when he first picked up a few senior women and gave them a ride home. He gave them a business card and the women then began spreading his name across campus. He became close to the class of 2005, and pretty soon students were saving his number in their phones as “Taxi Bob.” The name stuck, Schumm said.
His business, Fabulous Taxi, became so popular that at one point he was making seven to 15 trips every Thursday night and even had three guys helping him out. He also used to make seven or eight trips to and from the Jefferson hotel on the night of Ring Dance, he said.
This year he had only one call on the night of Ring Dance. Meanwhile there were about 10 Ubers parked around campus that evening, Schumm said.
Uber came to the Richmond area in August of 2014 and began costing Schumm $600 to $700 in business per week, he said. In February of 2015, he decided to become an Uber driver, though he still kept his cab business on the side to schedule planned trips.
“It’s changed the transportation business,” Schumm said. “I don’t know how these other guys are making money, no idea. I know that I stuck it out as long as I could, and I said, ‘Okay, the loyalty’s not there. I’m not going to be loyal to them.’”
After years of working with students, faculty and staff at the university, he charges a flat rate of $45 for a ride to the airport, $15 to the train station and $20 to the bus station for anyone on or near campus. While Uber’s prices may be cheaper, a student cannot reserve an Uber for a 4 a.m. ride to the airport. When operating as a cab driver he charges $2.50 per mile, he said.
But while Uber’s prices are typically cheaper than a traditional cab driver’s, outside of surge-pricing hours, clients are giving up service for convenience, Schumm said. As a cab driver he tried to build a rapport with his clients, but as an Uber driver he knows he may never see that client again because they are not calling him. They are simply calling the person nearest their location.
Faculty and staff still schedule pickups with Schumm regularly, especially for guests coming to the university, he said. There were times when he would bring one of these guests from the airport to the Bottomley House on campus late at night. But at that hour someone would take the key for the Bottomley House to the police station for safe-keeping and leave a note on the door instructing the guest how to get the key.
On several occasions Schumm would have the client get back in the car, drive them to the police station, get the key and drive back to the house without an additional charge because of his flat-rate, he said. Most Uber drivers would not do that.
Nancy Propst, the administrative coordinator in the geography department, said she had scheduled rides with Schumm for campus guests multiple times a month and had never had an issue. She has even ridden with him personally.
Last year a guest accidentally took a key for the Bottomley House with her to the airport. Propst was notified and called Schumm who was driving the guest from campus. He had already dropped the guest off and was halfway back when he got the call, but he still turned around and drove back to the airport, tracked down the guest, got the key and returned it to campus, Propst said.
Someone else would not do that, and she values his reliability and availability, she said.
Michele Mauney, the administrative coordinator for the Latin American and Iberian studies department, started her job less than a year ago. Her predecessor had used Schumm, and when he heard there was someone new to the position, he came to her office and introduced himself, Mauney said.
She enjoys helping out a small business by calling him and was saddened to hear he had had to become an Uber driver because she knew that was not what he wanted for his business, she said.
“It is hard when these big establishments come and kind of corner the market,” Mauney said. “And it is hard when… there’s an app for it. If there’s an app for it, you know, people with smart phones are just going to do it.”
Saif Mehkari, assistant professor of economics, said that Uber’s model was not new and had been used in various other industries. Ebay and Amazon Market Place operate similarly as they connect consumers to suppliers simply by providing a space to match the two and then taking a cut out of the transaction.
While the taxi industry has been relatively monopolistic for years, Uber is now challenging that monopoly, and the industry will evolve as a whole, Mehkari said.
“There are a bunch of these industries that are evolving, and they’re evolving because technology is very strong in these industries,” he said. “We move into this model of where you’ve got these people who come up with these apps that basically all they’re doing is they’re doing matchmaking services.”
If the consumers are able to pay less for a ride, then they have more money to invest elsewhere which helps the economy, Mehkari said. Also, the drivers who are losing business are then forced to contribute to the economy in some other way.
It is not whether this evolution is occurring but how rapidly, he said. If Uber is running people out of business at a slower rate, while helping consumers by lowering prices, then Uber is aiding the economy. If it is costing too many people their jobs too quickly, then it is detrimental to the economy.
Another issue with companies like Uber is that they are often unregulated or not regulated as strictly. As these models of business mature, however, these regulations will come in time, he said.
“So there are some losers and some winners, and the question is are the people losing too quickly with respect to the people who are winning or vice versa,” Mehkari said. “In the long run I think all this is good. And if it wasn’t good, Uber would die.”
Schumm said Uber has taken much of his student business though he still has strong ties in most all departments on campus. But he recognizes Uber’s appeal to the younger generation with its convenience, he said.
“Uber has changed the whole dynamic, and I understand why they use it,” Schumm said. “Forget about the negatives, I understand why they use it.”
Schumm wishes the governor had allowed Uber Taxi into Virginia instead so that all the taxi drivers in Richmond could have used that rather than their businesses suffering. Uber Taxi allows taxi drivers to still charge a meter rate, which in Richmond is $2.50 per mile plus one dollar per additional passenger, and they maintain this rate even during surges, Schumm said. The clients still would request and pay these taxis through the app.
This would have also increased regulation in the industry as taxi drivers are already licensed and regulated by the local police department, Schumm said. Uber drivers watch a few videos and are not required to get their vehicles inspected. Uber also runs a background check for the past seven years once, though they can run others if necessary. In contrast, local police conduct background checks, issue operating permits and inspect taxis every year, Schumm said. Taxi drivers must also attend a training session once a year.
Schumm will continue driving an Uber in the meantime as he tries to rebuild his business, he said. He has not fully recovered from his losses since Uber came to town, but he is regaining lost ground.
Contact reporter Ellie Potter at email@example.com