WASHINGTON, D. C. (Tuesday, February 12, 2019) ––It seems so-called “mobility disruptors” are disrupting the taxicab industry in Washington, D.C. significantly, even though the fares charged by cab drivers are generally cheaper on quick trips than their app-based competitors. The tea-leaves for Fiscal Year 2018 hint “one-tap” ride-hailing trips in the city could approach 50 million rides, while cab drivers are on track to eke out a living with somewhere north of 10.1 million rides, as they face continued reversals of fortune. Total taxi trips in the nation’s capital plummeted from an estimated 18.1 million rides in FY15 to 12.2 million rides in FY17. This comprises a 32.6 percent drop in the number of times a taxi was hailed in the city during the period, according to District of Columbia Department of For-Hire Vehicles (DFHV) data. The money earned by the “ride-booking market” is outpacing the fares earned by the city’s traditional taxi services.

An estimated 21 million persons hailed taxis to reach their destinations in the District of Columbia during 2012, a year that could mark the heyday and last hoorah of the city’s beleaguered taxicab industry. That figure reportedly dropped to 20 million passengers during 2013, according to estimates.  The number of cab rides in the city dipped from 14.7 million in FY16 to 12.3 million in FY17. This represents a loss of 2.4 million trips over the course of the reporting periods, as more customers use smartphone apps to hitch a ride with private sedan for-hire companies instead of taxicab services. The trajectory of ride-hailing trips in the District soared by 15.2 million rides year over year. Cabbies are also nervously looking over their shoulder, as more and more residents hope to find a “side hustle.” This could explain, in part, why the city’s vehicle registration rolls jumped to 337,100 vehicles in 2016, according to Federal Highway Administration data.

“Not too long ago, taxis and cabs were seemingly prevalent and pervasive on the District’s 1,100 miles of roadways. In a matter of a few years, ‘one tap’ ride-hailing services have disrupted the taxi industry in many urban areas, and that is especially true in the District of Columbia,” said John B. Townsend II, AAA Mid-Atlantic’s Manager of Public and Government Affairs. “In the nation’s capital ride-booking services have become a very popular transportation option. But at what costs to residents and the traditional industry?”

In 2018, the city saw 45 million trips by for-hire vehicles, generating $725 million in fares. But the bad news just gets worse for the once ubiquitous taxi cab fleet in the nation’s capital and for cab drivers who “earned a median annual salary of $24,800 in 2017,” according to the U.S. Bureau of Labor Statistics (BLS). District cab drivers saw their trip totals fall to 12, 283,254 rides in FY 17, although research by Consumer Reports reveals “in many cases, taking a local taxi service might be a smarter choice for your wallet.”

Taxicabs collect a surcharge of 25 cents per ride, while the city receives a tax of one percent of gross receipts from private for-hire operators. In FY17, ride-hailing services generated $4,530,287 in tax revenue (which equates to around 45.3 million trips, using an industry standardized formula of $10 per trip), compared to $3,120,522 in surcharge revenue from the city’s traditional taxi industry. A year earlier, taxi services reported $3,742,301 in surcharge revenue, and ride-hailing services reported $3,011,828 in tax revenue during FY16. At an average fare of $10 per trip, it equates to 30.1 million ride-booking trips. Those are a lot of trips, even in a city clogged by 693.5 million vehicle trips annually or 1.9 million vehicle trips a day.

Total taxicab trips dipped to 10,170,356 rides to work, home, airports, shops, and places of worship during FY 2018. More strikingly, records show during FY18, ride-hailing services reported $4,892,470 in tax revenue to the Department of For Hire Vehicles, generated through an estimated 48.3 million trips. That compares to the $2,364,335 in surcharge revenue that the taxi industry reported to the DFHV. Total FY18 figures have not been fully calculated as yet by the Department of For-Hire Vehicles (DFHV).  In major cities across the country, those using ride-hailing services spent an average of $13.15 per trip on average, spending 15.11 minutes and traveling 6.66 miles, according to an analysis by AAA of the costs of ride-hailing services.

The fortunes of the city’s taxicab sector show no signs of improving anytime soon, as it continues to lose ground and pride of place to ride-hailing services, such as Uber and Lyft, and Via as the platform  expands. “D.C.’s ride-hailing market has exploded over the past three years, more than quadrupling since late 2015 as Metro and taxi ridership has steadily fallen, statistics show, a sign that Uber and Lyft are probably creating thousands of new vehicle trips in the city, officials and analysts say,” The Washington Post reported April 23, 2018.  In contrast, “the average number of rides per taxi in San Francisco – Uber’s home town – declined by 65 percent between 2012 and 2014,” according the San Francisco Municipal Transportation Agency as cited by the University of Oxford. “About 1 in 4 taxi drivers, ride-hailing drivers, and chauffeurs worked part time in 2016,” according to the Bureau of Labor Statistics (BLS). The DFHV does not currently collect trip data from private vehicle operators such as Uber, Lyft, Via and other companies. Uber generated about $11.7 million in Washington, D.C. in December 2013, for an estimated $141 million annual run rate, according to Business Insider.

The District will not know how many trips were completed by the ride-hailing sector until January 2019, when data reporting is mandated, according to the DFHV. Even so, no one has provided exact figures on the number of ride-hailing trips in the Washington metro area. The TPB estimates Uber and Lyft make about “123,000 trips per day around here.” They are “routinely used for work trips.” Another estimate pegs the number of people registering their vehicles as “ride-hailing vehicles” at 185,000 would-be drivers in the region. Washington, D.C. once boasted the “highest number of taxis per capita of any city,” in terms of scale.  This is also happening in New York City. “With Uber and the other digital-based ride services scooping up more and more customers looking for cost-saving short trips around the city — and often doing it more cheaply than the yellow cabs — the taxi industry is in, to put it mildly, flux,” according to The New York Post. In Chicago, cabbies are complaining the cab industry is heading toward collapse, USA Today reported.

Most city-dwellers, workers, Washington area residents, tourists and travelers fail to understand the true costs of using ride-hailing services as a primary mode of transportation, an August 2018 study by AAA reveals. In June 2018, the District Council voted to raise the tax on ride-hailing services, such as Lyft and Uber, to undergird funding for Metro. The District Council passed legislation raising the tax on ride hailing services from one percent to six percent, under the provisions of the Fiscal Year 2019 Budget Support Emergency Act of 2018, which became effective September 28, 2018. “For ride hailing services, a $20 ride that currently charges $0.20 in taxes will now charge $1.20 in taxes,” according to one analysis. There is also growing evidence ride-hailing services are also “exacerbating traffic congestion” in a city that experiences the largest surge in daytime population (79 percent) in the nation each workday. “Ride hailing services such as Uber and Lyft contribute to traffic congestion, add wear and tear to the District’s roads, and there is evidence that they draw people away from public transit,” as detailed in a report prepared by the District Council staff.

Follow us on Twitter: @AAADCNews

Like us on Facebook: AAA Mid-Atlantic News

Washington, D.C. Mailing Address:
1405 G Street NW
Washington, DC 20005

AAA provides automotive, travel and insurance services to 58 million members nationwide and nearly 79,000 members in the District of Columbia.  AAA advocates for the safety and mobility of its members and has been committed to outstanding road service for more than 100 years.  The not-for-profit, fully tax-paying member organization works on behalf of motorists, who can now map a route, find local gas prices, discover discounts, book a hotel and track their roadside assistance service with the AAA Mobile app for iPhone, iPad and Android. For more information, visit  https://aaa.com