Cab Companies on Uber and Lyft: If You Can't Beat 'Em, Join 'Em

After fighting against Uber and Lyft, traditional taxi operators are increasingly adding ride-hailing services of their own.

Melrose filming - Glasgow
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Traditional taxi services fought tooth and nail against upstarts Uber and Lyft. Their new transportation model bypassed many of the requirements and restrictions cab companies have been saddled with for decades, giving them an unfair advantage, the industry argued. But ride-hailing services are here to stay, and traditional cab companies are taking advantage of the very business model their former enemies pioneered, reports Automotive News.

While not abandoning well-established, long-standing businesses, some taxi companies are now adding services similar to Uber and Lyft to their own offerings. Pittsburgh (Pennsylvania) Yellow Cab, for example, recently rebranded itself as zTrip, which sounds much more 21st century. zTrip has its own app through which you can schedule a ride the same way you would with Uber or Lyft, yet as a cab company, you can still simply flag down one of its passing cabs as well. Another difference is that zTrip refuses to increase prices during peak travel times, a practice known as "surge pricing," which Uber and Lyft are infamous for.

The two different services offered by the same company can complement each other as well. During a recent Pittsburgh Steelers game, zTrip had 300 cabs in service, plus 126 independent ride-share contractors. It wouldn't make financial sense to buy an extra 126 cabs for rare times of high demand and have them sit unused at other times. But independent contractors who want to make some easy money can jump in and supplement the fleet at times of high demand, like a Steelers game, without the company having to make a huge capital investment.

zTrip is far from the only cab company to have this idea. In fact, C&H Taxi of Charleston, West Virginia, had the idea to let drivers use their own cars during the 1980s. But this was illegal until Uber and Lyft came along and got the laws changed to allow them to operate in the area. Lifting this restriction, plus modern technologies like smartphones and GPS, opened the door for C&H Taxi to pursue this 30-year-old idea.

Many traditional cab companies refuse to change in the face of the new kind of transportation services Uber and Lyft offer. Some of them have gone out of business as a result. But perhaps without realizing it, in spending millions of dollars on lobbying states to change laws to permit them to operate, Uber and Lyft have created a new kind of competition from the same companies that didn't want to compete with them before. 

Uber and Lyft certainly the advantage of a huge coverage area—48 out of 50 states and counting. But local cab companies adopting the more flexible ride-hailing model gives customers the opportunity to "buy local" while still receiving similar services. Plus cab companies are now seeing ways they can take advantage of the relaxed restrictions on the ways they can do business, and rather than fight them, they are using them to their advantage.