Taxis get a tech update to compete with Uber and Lyft

30 Oct 2015 | Author: | No comments yet »

Flywheel Isn’t Just Competing With Uber Anymore.

Flywheel, the Redwood City, Calif., technology company that works with the taxi industry, announced Thursday it will begin piloting in San Francisco an all-in-one GPS-based smartphone taxi meter, which will replace existing technology in participating taxis. Flywheel—a Redwood City, Calif.-based company best known for equipping traditional taxis with ride-hailing smartphone apps—has been noticeably slow to take on New York City, the country’s biggest taxi market.Flywheel, the app for hailing taxis, has a pilot program in place with the San Francisco Municipal Transportation Agency to implement its new platform, TaxiOS, into 70 cabs.

But on Thursday, the company finally revealed the reason for its lag: it’s been working on a cloud-based software system for taxi companies it plans to soon bring to the Big Apple. If that sounds familiar, it’s because on-demand transportation services such as Uber and Lyft currently use similar technologies, which allow customers to track their rides and pay through cashless transactions. “If there’s anything that’s been shown from Uber and Lyft, it’s that to get the scale and to give customers what they need, it has to be done with the smartphone,” said Flywheel’s director of communications, Bob Patterson. “Everyone we’re having conversations with is ready to make the move.” Unlike Uber and Lyft, where customers can hail a ride only from a mobile app, Flywheel’s technology also will work with phone dispatch, and customers still can hail a cab off the street. Starting today, Flywheel — which started simply as yellow cab-hailing app and later came to include a digital payment service for cashless taxi transactions — is rolling out its newest product: an all-in-one taxi operating system.

According to Flywheel CFO Oneal Bhambani, the idea is that TaxiOS, a driver-facing app, will effectively replace — and, ideally, improve upon — all the hardware in taxis. Taxi drivers only need an Android smartphone equipped with a card reader attachment (Flywheel declined to say which company is providing the readers) to do everything they need. Part of that is likely because the SFMTA has a mandate for all taxis to work with some type of mobile booking solution. “When we started reimagining the technology in taxis with TaxiOS, we brought the SFMTA into the process early and explained what we wanted to do and listened to their feedback,” Flywheel CEO Rakesh Mathur told TechCrunch. “For example, they wanted a way to accept SF Paratransit (a discounted taxi program for people with special needs) payments we built it into our system.” Flywheel’s TaxiOS will also be available for free to non-Flywheel Taxi drivers, and the company says it has interest from several other taxi companies looking to update the technology used in their fleets. That includes the payment, navigation, and dispatch systems, in addition to the taxi meters, which determine fares by counting the number of times a taxi’s tires revolves during the ride. The TaxiOS app will use GPS to determine the fare, which makes it more accurate than the existing and “antiquated” taxi meters, according to Bhambani; it will also allows riders to hail taxis, then pay for the rides on their phones or swipe their card through a Square-like credit card reader.

The company will charge taxi companies in the same way it does for its flagship Flywheel app: a 10% cut from each fare and charge passengers $1 if they pay through its mobile app. Flywheel sees TaxiOS as being key to scaling in additional markets. “Unlike rideshares, Flywheel doesn’t need to devote capital to recruiting drivers or owning inventory,” Mathur said. “With TaxiOS, cabs running this new technology can be up and running in just minutes — rather than hours to a full day that it’s traditionally taken for cabs to deploy. But as opposed to Uber, which is only for people who have smartphones and credit cards, taxis running TaxiOS can pick up rides hailed through an app, on the street or voice dispatch; and accepts either cash, credit card/mobile app payment.

In the meantime, Flywheel has distributed TaxiOS to approximately 1,200 taxis, and according to Bhambani, there have been more than 1 million test rides of the product and the meter to ensure it works without a hitch. (Because the company has yet to receive regulatory approval, the app works in parallel with existing meters and hardware.) “We don’t think anyone else has this technology,” Bhambani said of the in-app GPS-enabled meter. “We are the only one to have to have a single device solution. In New York, two companies each control about half of the systems in the entire 13,000-plus vehicle fleet: Creative Mobile Technologies, based in Long Island City, Queens; and Verifone Systems, based in San Jose.

That is a really big technological barrier to entry, that’s why we believe we’re pretty well positioned to be one of the first participants in the [TLC] pilot.” While a press release Flywheel circulated to announce the launch of TaxiOS goes as far as to call existing technology “dated” and “disparate,” Jason Gross, the global head of product and marketing at Verifone — one of the first companies to offer credit card payment services in taxis — patently disagrees. Mathur called CMT and Verifone’s equipment “obsolete” and more reminiscent of the late 19th century than anything that should be in use today. “It really makes so sense in 2015 to be running equipment,” he said. “When you take a taxi it’s like you’re transported back in time, right?

With its acquisition of e-hail company Curb earlier this month, and its plan to combine it with the company’s proprietary taxi-hailing app Way2Ride, Verifone may prove to be as formidable a competitor to Flywheel as Uber has been. A spokesman for CMT said, “As the leading taxi technology provider throughout the country, we often see cheap sub standard products creep into the space — they almost always fail — that’s because operators cannot afford to lose the confidence of their passengers in the ever competitive market.” Jason Gross, vice president for strategy and innovation at Verifone, said his company was also developing technology solutions to the current problem with in-taxi equipment.

With regards to Flywheel’s new OS, Gross said, “It’s a fine idea, but incomplete.” He said that Flywheel lacks the foreknowledge of taxi regulation and the deep relationships with fleet owners and city officials that Verifone has. “We think its fine if another technology company wants to try to offer solutions,” he said. DOS-era equipment, or a cloud-enabled smartphone?Both companies recently unveiled their own e-hail and payment apps, Arro by CMT and Way2Ride by Verifone. Uber has a huge head start, and while the company certainly marginalizes a wide swath of potential customers with its Machiavellian maneuvers and illegal incursions into cities, it is growing at an exponential pace.

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