How business has changed since ride-hailing came to town

Aug 24, 2017

Vincent LoVallo is an Uber driver. Yes, it is the same Vincent LoVallo who used to be Buffalo’s streets commissioner, mayoral chief of staff and City councilmember. He said ride-hailing coming to Buffalo is similar to when food trucks first came to the area.

“Buffalo is lagging behind, but won’t for long - and as food trucks came and now are our staple in the city, so will Uber," LoVallo said. "There is a need for it. Not everybody has the money to pay for a taxi service.”

LoVallo’s passengers from that afternoon, Steve and Mitzi Endemano, were visiting Buffalo from California and decided to use Uber to get to the airport. Why did they choose Uber over taking a cab?  

“First of all the cost is much less,” said Steve Endemano, “and then, secondly, it’s easy to get an Uber."

Cost can actually work in favor of taxicab operators during peak hours. Ride-hailing services have surge pricing, which means their prices increase when there are not enough cars to accommodate passengers.

Bill Yuhnke, owner of Liberty Yellow Cab, has found surge pricing to be a drawback for ride hailing.

“Eight out of 10 times we are cheaper during that time, Yuhnke said. "So during drive times, when it rains, when it snows, when there’s a football game, when there’s a hockey game, you will definitely pay more with ride-share.”

Despite this drawback, Uber and other ride-hailing services are still getting a large amount of business in Buffalo - and cab drivers are starting to lose out.

"I'm a cab driver in Buffalo about the last 15 years," said Nigel Varathan, with Buffalo Amherst Airport Taxi. "After Uber and Lyft, every cab driver is affected really badly."

Varathan said ride-hailing is causing major business losses for cab companies.

“Almost 80 percent of our business is gone," he said. "Uber and Lyft took over our business. It used to be like this time, we were rolling. We are fare after fare, fare after fare.”

Though Western New York lobbied heavily for ride-hailing, Varathan said this may not be the best thing for the area due to the city’s size.

“Buffalo is a small city. We don’t have a million people living here in Buffalo, first of all," he said. "You know, the city limit, I think is about 150,000-200,000 people living in the city of Buffalo.”

As ride-hailing continues to grow and develop, LoVallo is convinced local cab companies will rise to the challenge of competing.

“I think it’s going to make the cab companies stronger," LoVallo said. "I think they’re going to be more on the ball. I think their cars will probably be a lot cleaner, their drivers will be better dressed and, I think, quite frankly, it’s good for all. I think it’s good for business. Competition’s never bad. Competition’s good.”

While cab companies and cab drivers are rising to the challenge, their efforts are falling short. Yuhnke said many staff cuts have been made in order to remain financially sound.

“Our night shift dispatch system right now is being handled in the Philippines, the weekends are handled by the Philippines, he said. "Our second shift here in Buffalo is, as far as live people here in Buffalo, at 8 o’clock at night we are now shut down our Buffalo operation.” 

As the owner of one of the largest cab companies in the region, Yuhnke has seen and heard about the effects ride-hailing has had on the local taxi market.

“I can tell you that some of the numbers are that a company that had 45 vehicles are down to seven," he said. "The usage at the Buffalo Airport, ride-sharing has taken over about two-thirds of their business.”

Uber released a statement showing the top 10 most-used drop-off spots. Every location was in downtown Buffalo, except for the Walden Galleria in Cheektowaga. However, Yuhnke is finding that business going to other parts of Buffalo gives cab companies a competitive edge over ride-hailing.

“What basically happened in our situation is that our business has shifted from the number one area, which was downtown, has now switched out to the East Side of Buffalo and the suburbs,” he said.

However, ride-hailing has been in the region for only two months and Yuhnke thinks it is too early to tell how it will develop in Buffalo. Still, one thing is clear: ride-hailing is altering the way cab companies do business and leaves their future murky.