Next NYC Taxi you hail, you might be surprised to find a clean car and chipper driver. That’s because drivers of those classic-looking yellow cabs have a new option in renting vehicles they’ll use for their shifts around Manhattan and its adjacent boroughs.
Lacus is a Zipcar-like model of for-hire taxis curb-parked in designated spots. It launched publicly in September 2017 and now has over 3,200 drivers using its app, or about 6% of all medallion-licensed drivers in New York’s five boroughs.
As with Zipcar, each new user checks into the car using a smartphone as a key and immediately reports its internal and external condition, forcing the previous driver to leave it as pristine as found or face sanctions. Beyond just paying a fee tacked on to the day’s rental bill like a Zipcar member, Lacus drivers could get suspended and be forced to go back to a time-wasting traditional fleet. (Zipcar and Lacus have no affiliation, apart from overlap in their systems of user accountability.)
In the Lacus model, drivers simply have to do better on hygiene than they did when they picked up well-worn vehicles in Brooklyn for a grinding 12-hour shift. They’re still working the same half-day haul so their preference is to maximize time on the road earning and minimizing time cleaning up after sloppy passengers or otherwise maintaining a vehicle. Lacus’ founder Aleksey Medvedovskiy reasons they’ll be more than glad to do so because of the time saved that actually does extend time on the road. Plus cleaner cabs translate to happier customers apt to tip well.
The cars still belong to NYC Taxi Group, and drivers take the same cut of their earnings, which is everything after the rental fee, fuel and a new congestion fee effective in January on rides through some areas. That Lacus is only a technology provider, essentially the fleet’s vendor, is a critical piece of its leverage over its drivers.
Since it’s not a fleet, Lacus isn’t subject to the voluminous regulations of the New York City Taxi & Limousine Commission, a city agency. One TLC division, the Driver Protection Unit, exists to shield drivers from a range of actions by the fleets they rent from, including being forced to maintain the vehicle.
Drivers also have a local union. But unlike that union’s recent drive to restrict ride-hail companies’ presence on its turf, there’s little incentive to attack Lacus because it’s not skimming business away. The drivers of these vehicles parked around the city work for the same decades-old fleet populated by longtime union members and medallion holders, circle the same patches of New York and charge the same fares. The difference, according to Lacus, is their earnings likely increase as their time at the depot decreases.
The Brooklyn depot where drivers pick up cars for shifts that run from 5 to 5, whether morning or night, is in the Kensington neighborhood, across the bridge and far from Manhattan’s plum fares. All drivers pick up their cars at the same time, meaning they’re herded through a long line with about 200 drivers, according to Lacus’ counts. It works out to about a 3 a.m. or 3 p.m. arrival, plus the time to wrap up one’s shift afterward.
That wrap-up includes returning the car’s keys and an accounting procedure that requires the fleet’s review of the day’s credit card receipts before the drivers can be approved for payment. According to Medvedovskiy, it’s a ratio of one fleet staffer to every 75 drivers. Instead, Lacus digitizes transactions for the passengers paying the fares, the fleet doing the math and the drivers receiving the payment. Drivers get a system akin to Lyft’s Express Pay or Uber’s Instant Pay, but fleets earn by saving too, cutting labor costs and paperwork.
After counting commute time to and from the commercial zones where taxi depots are sited, far from drivers’ homes in residential areas, Medvedovskiy clocks up to five hours of wasted driver time per day. At Lacus’ internally surveyed $40 per hour average gross earnings, that’s up to $200 lost per day. Getting to and from the curb-parked cars in Manhattan is still a trek for the drivers who mostly reside far outside New York’s pricey real estate, and keeping a clean car takes some time away from from picking up fares, so Medvedovskiy estimates an average realistic time savings of three hours or $120 gross earnings per day.
But what about Uber and Lyft? Does it matter how much more time on the road old-school cabbies have if the market is flooded with lower-priced alternatives? Between cabs and ride-hail cramming the landscape, Manhattan streets can feel like a parking lot whose contents periodically drift and shift, hopefully in the direction of your destination.
Medvedovskiy says this gridlock is good news for his growing business. “The congestion and traffic that Uber and Lyft created works as a great benefit for the taxi drivers,” he said.
A ride-hail driver that can’t connect with a passenger at pick-up is forced to circle a large city block, a slow trip around a clogged square while Lacus’ ubiquitous driver-clients pass by ready to pick up the ride-hail user who is standing there frustrated, eyeing a pin on a map and later-than-expected arrival time. In Lacus’ own research, it learned that six out of 10 Uber fares were canceled because the wait time exceeded the duration of the ride. Those yellow cabs that Uber helped empty are now hovering to take back frustrated New Yorkers, with no commitment to any individual passenger, only the closest one with an arm in the air.
And it goes beyond just obtaining the passengers; taxi drivers can earn more on each one. “This congestion that everybody’s talking about, that Uber and Lyft created, it’s a great plus for the taxi,” Medvedovskiy said. “Because once the meter is clicking and [the taxi] is sitting in traffic, the driver is going to make $36 an hour. With the Uber driver, it’s totally different. You’re going to get upfront pricing.”
Lacus’ long-term goal is to become the go-to platform for any for-hire driver. Black cars and trucks are in the pipeline. It started with taxis because it was the thorniest case study in managing a fleet. It tested its own capacity with the chore of integrating technology between a fleet’s accounting needs, the cabs’ rooftop lights and meters, local traffic and drivers’ bank accounts.
“It’s always easier to start with the easy things, but when it gets complicated that’s when you get stuck,” Medvedovskiy said of building and scaling his concept. “So we took a different approach. We decided to start with the complicated stuff, and get into the simple things much later.”