Business

Uber expands on Long Island at the expense of taxi companies

By Mike Adams

Levittown resident James Cannon has been working as an Uber and Lyft driver since June 29, 2017, the day ridesharing services were granted permission to operate on Long Island.

Cannon, 25, has settled into somewhat of a routine after 10 months on the job. He starts his workday around 3:30 a.m., avoiding drunken late-night passengers in favor of picking up business commuters and clients travelling to the airport. His day typically ends at 10:30 a.m., but he returns to the road for rush hour from time to time.

Flexible hours have given Cannon the ability to balance earning a living with his schedule at real estate school.

“When you have Uber, it’s awesome when you’re going to school, because the flexibility is key,” Cannon said. “ You turn it on when you want to work, you turn it off when you don’t. That’s it.”

Cannon is just one of the thousands of Long Islanders that have gone to work as freelance drivers since New York state legalized ridesharing services like Uber and Lyft in Nassau and Suffolk County this past year.

“We’re moving forward for a very simple reason,” Suffolk County executive Steve Bellone said when announcing the county would permit ridesharing at a press conference last June. “We want to provide our residents with more convenience, more convenient transportation options and to have the ability to more effectively grow our economy.”

Ridesharing services have altered the face of Long Island’s transportation industry since they were legalized in the area. Uber currently has more than 7,000 Suffolk drivers and carries 60,000 passengers regularly, according to the company’s own estimates.

The company’s expanding presence in Suffolk County has caused many local taxi and limousine services to lose business. Some companies have seen their revenue decrease as much as 40 percent since Uber came to the island.

“We don’t get as many calls as we used to before,” Nick Dose, a dispatcher for the Cold Spring Harbor-based Eco Taxi, said. “People prefer to use Uber because I guess it’s easier and kind of cheaper.”

Taxi drivers themselves have also seen their business dwindle as their clientele choose Uber in growing numbers.

“I lost a fare to an Uber just last weekend,” Jeff Fountain, a driver for Marathon Taxi in Ronkonkoma, said. “A young lady missed her transfer, so she was desperate. She wanted to know the price but she said it was too much, as soon as she got out the car she jumped in an Uber car.”

Fountain works on salary as a medical transporter Monday through Friday. Between a dwindling customer base, rising gas prices and splitting his earnings with the company, he said he barely pulls in enough money as a cab driver to break even.

“Let’s say I make 100 dollars for the day, it’s 50 to the company, 50 to me and then I have to fill the gas tank up,” Fountain said. “I’m not below poverty level, but I’m definitely below the self-sufficiency level for my income.”

While traditional transportation services still maintain a sizeable presence on the island, Cannon believes Uber has already won the battle for the market.

“I don’t even consider them competition anymore, and I don’t think Uber does,” Cannon said. “They’ve already beaten the taxi industry. The taxi industry is dead, they just don’t want to admit it.”

Taxi drivers have sometimes reacted aggressively when they came upon Coram-based Uber driver Stefan Werner driving for the company, he said, particularly in the town of East Hampton, where Uber had been banned since 2014.

“I’ve had pushback from taxi drivers,” Werner said. “I’ve had trash and coffee thrown out windows onto my car, they’ll flip you off if you go by…up in the Hamptons they’ll cut you off and just be real nasty.”

Currently, Uber and Lyft’s Long Island operations are directly regulated by New York State’s Department of Motor Vehicles. Taxi and limousine companies, on the other hand, are regulated at the county level in both Nassau and Suffolk.

Democratic Suffolk County legislator Bridget Fleming, who first proposed a now-tabled bill calling for a six-month moratorium on Uber and Lyft’s operations in the county, feels looser regulations and a lack of local oversight give the two an unfair edge over their competitors.

“They don’t have worker protection,” Fleming said. “Private companies other than Uber and Lyft are now at a competitive disadvantage because they’re paying workers’ compensation, they’re paying insurance and they have to register with the towns.”

In contrast, Republican Suffolk County legislator Tom Cilmi believes competition between different transportation system will ultimately inspire improvement across the board.

“We live in a free market economy,” Cilmi said. “The potential exists for the loss of business, but the potential also exists for improved business models, so I think the competition is healthy.”

The argument that the free market alone can make up for the island’s transportation problems does not hold up upon examination, Fleming said.

“I think it’s extremely short sighted and disingenuous for anyone to say that the free market is going to take care of everything,” Fleming said. “If that were true we wouldn’t have roads…half the things that make the United States a great place to do business are generated by the government.”

Uber itself, which spent $9.4 million lobbying to legalize ride sharing throughout New York, disagrees with Fleming’s plan to renegotiate Suffolk County’s arrangement.

“Banning Uber is the wrong way to pressure Albany,” Uber spokesperson Danielle Filson wrote in an email statement. “We will do whatever it takes to ensure that the riders and drivers who depend on our app to earn income and get around understand what’s at stake if their leaders move to make Suffolk County the only place in the country with an Uber ban.”